Should we Hold an Open House

When you are selling your home as a For Sale by Owner (FSBO) you will almost certainly hold open houses. However, there is much controversy amongst sellers and even real estate agents on whether to hold open houses or not. Here are a few things to consider;

1. Where is the home located -- Is your home located on a main road where lots of road traffic passes by each day. Then an open house may be worth it. However, if your home is in a gated community or located on a dead-end it may not command enough drive-by activity to make it worthwhile. An open house on a road where 35,000 cars pass by each day will be more successful than one where the only cars that pass by are the neighbors.

2. Security -- Beside the looky-loos, neighbors, and those interested in getting decorating tips, one group that likes open houses are thieves. Although not all that common, crime and assaults do occur from time to time. The crime is often the stealing of jewelry or prescription drugs. Whether you are a FSBO or Realtor an open house is an open invitation for everyone to come in, and you cannot control whether they are potential buyers or those that may be planning something more nefarious.

3. Cost -- Anyone can put out a sign, but properly advertising an open house can run $80 to $200 or more for each open house. These costs can add up quickly.

4. Housing Market -- In a sellers market the chance of selling is high as buyers are desperate to find a home. They often go to a Realtor, look for open houses and FSBO homes. In a normal market about less buyers look for open houses, and in a buyers market, most buyers go through a Realtor as there are too many homes available. Therefore, there is little benefit to an open house in a buyers market, limited benefit in a normal market, and good benefit in a sellers market.

5. Is your home the best priced, or in the best condition -- Sometimes those looking at open houses are not yet serious buyers, however if the home is so much better than others and the price is great, the looker can turn into a serious buyer. This requires a home in perfect condition or priced lower than the competition.

6. Success Rates -- Open Houses are successful approximately 1% of the time. On average for every 100 people that go through an open house 1 person will purchase. In a sellers market, 100 buyers may go through an open house in a few weeks. In a buyers market it could take many months or even years of weekly open houses to sell the home.

The decision on whether to hold open houses should be thought through carefully and discussed with a real estate professional. For a well-priced home in a high-traffic area they can be a great idea. For other homes they can be costly and of little benefit.