In this post we want to share with you the powerful benefits of including open houses in your marketing strategy.
If you’re already doing open houses, this information will help you take them to the next level.
First, let’s get a little context:
Veteran agents have witnessed the role of Open Houses change dramatically over the years. It once was very common for agents to use Open Houses as an integral part of their overall business plan.
But when the internet caused a major shift in how home buyers search for homes, many agents have slowly backed away, and only did them because their sellers “expected” it.
In fact, because open house participation dwindled, it was pretty common to try to convince sellers that they were no longer worthwhile.
There has been a shift again in buyer behavior. When you combine that fact with the latest technology around open houses, it really makes sense to embrace them again, if you’re not already doing so.
Among agents there is often a debate around the ethics of open houses.
This is the question often posed: “Is it right to let a seller believe that the sole purpose of the open house is to get their home sold without letting them know that it’s also an opportunity to use their home to attract & engage with buyers even though those buyers most likely won’t be a candidate for the seller’s home?”
We’ve been doing open houses for over 20 years and it’s our opinion that this isn’t an either/or answer. It’s an “AND”.
Although this isn’t completely black & white, for us there are 2 primary types of open houses:
The “Traditional” type and what we call an “Open Showing”.
TRADITIONAL OPEN HOUSE
The traditional open house is what we are all familiar with, typically: Sunday 2-4, property info neatly organized in the kitchen, sign in sheet, business cards, etc. – for the more dedicated agents maybe: balloons, cookies, soft jazz, scented candles, etc.
Typically agents will advertise in some type of print medium like the local paper’s “Open House” section or Craigslist. They’ll often call, mail or visit surrounding neighbors also in hopes of locating other potential sellers.
All of this is good and worth doing, but if you read the statistics, not many homes get sold this way. Sure, we’ve sold houses at open houses like this and there are agents that have a higher than average closing success rate doing open houses this traditional way. But the fact is the majority do not.
So besides the minority of times that a home sells at an open house, it is safe to agree that the major benefit from the traditional open house is the benefits the hosting agent receives: face-to-face networking with buyer and sellers – the lifeblood of any agent’s business.
Then we have what may be a new concept for many, something we actually started doing in the late 90s: The Open Showing.
Unlike the traditional open house, the main purpose of the open showing is to get the home sold at the event. It’s more about getting offers on the home vs. a traditional open house where you may get an offer but most likely you’re going to mainly benefit by getting a bunch of leads (and some feedback for the seller).
The open showing takes advantage of primary emotion that ALL humans respond to: SCARCITY.
You see this applied everywhere on-line and off-line. People are much more likely to take action on something they’re even remotely interested in when the opportunity to do so is scarce.
People are wired to want something more when it’s something they perceive to be as limited or unattainable.
It’s been called many things, but for us the closest description to what we want to create is an “Auction-Like” event.
If you’ve been part of home bidding war, you know what we’re talking about. Buyers will do extreme things when they want a house and someone else wants the same thing. It’s classic supply & demand.
Scarcity is listed as one of the 7 most powerful influencers in his highly regarded book, “Influence: The Psychology of Persuasion” by Dr. Robert Cialdini. (This book should be required reading for any salesperson.)
So how are we going to employ scarcity?
It’s actually very easy. One little change, instead of “Sunday 2-4” we use “Sunday 3 O’clock Sharp”.
Simple but genius.
Here’s how this often plays out. Instead of 10-20 potential buyers straggling through at different times over the course of 2-3 hours, we’ve funneled them there all at the same time.
Now picture you’re a potential buyer that wanted to check out the open house, you had some interest but you’re not super motivated about the house. How do you think you will feel when you pull up and 10-12 other cars are all pulling up, parking & getting out heading towards the door?
Your interest level is going to increase immediately because we’ve also created desirability – another motivating factor. There will also be a little nagging voice that goes off that says, “with this much interest it may be hard to get this…” (SCARCITY).
So maybe there’s only 1 or 2 really interested parties out of the 10-20 that are there. The thing is they don’t know that. They will most likely feel that everyone is interested just like they are.
We will usually tell everyone, “to be fair we’re going to wait to receive all offers by 4PM tomorrow before we respond. So please let your agent know and please give your highest & best offer first.”
This often leads to the auction effect and multiple offers (Another nice benefit is you’re only there for an hour instead of 3!).
This is not some theory. We have done this for years and closed many multiple-offer deals directly from the open showing.
It doesn’t always work, but it often does and when it does it’s AWESOME.
So the approach we recommend is educate your seller about the “Open Showing”. Sharing a deeper level of knowledge about the topic of scarcity will set you apart from any other agents they may be talking to.
Tell them you recommend the open showing first. Then if there are no offers. Plan a traditional open house.
For both types, use advanced open house technology:
Run Facebook Ads & Boost post to target 2 specific groups
1. Homeowners in the surrounding neighborhoods
2. Broader audience with the correct demographics and area that would be a good match
(See our 2016 Agent’s Guide to What’s Working Now for details on how to do this)
Use a clean but sophisticated web app or website to streamline much of the process.
Technology has advanced to the point where much of the open house sign-in, follow-up & feedback communication can be automated.
Here are some players in that space:
AM Open House
Open House Toolkit
Of course we have also have Agentjet Hook™ , our automated Open House plug-in for our Agentjet ONE™ platform. (The big benefit of ours over the others is that it is integrated into our ONE™ platform so you get an IDX website, CRM and more all synced to to your open house tool. This allows you to be very efficient and perform all types of ‘ninja’ strategies.)
You can check that out here (even if you don’t buy our software, you can still get a good feel for what these types of tools do by watching):
Bottom-line: If you’re not currently doing open-houses. Get back in the game.
Final note: There are fewer tire-kickers now as well. Before the internet, the only way buyers would even know if they might be interested was to come in, take a look and grab some info. That led to a lot of ‘wrong fit’ visitors.
Now the opposite is true. Many open house visitors will have already viewed the home extensively online prior to visiting the open house/showing. So you get more buyers that will be the right fit.
Timeline to share with Sellers