do open houses help sell a house

My first open house in 13 years

by John Rice

I did my first open house since 2009 recently. None of the people who came to the open house bought it.

Why?

Because open houses do not help a seller get their house sold.

Who comes to an open house?

1) People who are so new in their search for a home that they are not ready to make a decision.

2) Neighbors.

3) People who just like houses and real estate.

Why do realtors seem to love doing them?

Because they get to meet all those people who are not going to buy the house they are standing in but may buy something later.

Why then did I do one?

For my seller. We put her house on the market right before Thanksgiving. That is statistically the absolute worst time to put a house on the market……and Thanksgiving 2022 was pretty much the worst market since 2011. Interest rates had just put all buyers in a state of shock and very few were out actively shopping.

My seller was one of the nicest clients I have ever had. She needed to get this house sold so she could get married, move and start a new life out of state. All that was in the way was selling this house. It was very discouraging to her that it didn’t sell fast. The market did a major shift so quickly last fall. FYI-It is much better now. Buyers are getting used to today’s rates and are not as shocked/mad/afraid to buy a house. Back then all the headlines were how terrible the market would get. Prices would fall. Zillow and Redfin went from predicting things like 14% annual gains to declines of 10% or more in value.

Long story short, she needed a little encouragement and the least I could do was give her part of one Sunday afternoon.

It had been so long since I had done an open house that I didn’t even have any signs. The first step was to buy the bigger open house sign to put in the yard and get it scheduled online. On my way to her house, I placed the brand new directional signs so people could find the place.

Where I hadn’t done one in so long, I had no idea what to expect. My plan was to get my 10,000 steps done for the day by pacing around her house. I had many pleasant surprises that day. The first of which was that the seller had candy in practically every room and had baked fresh cookies. I ate so many of them that I should have walked 1,000,000 steps that day. We had a huge number of people show up. So much so that I didn’t really have time to play solitaire and sudoku on my phone. I also ran into two people I knew that I hadn’t seen in forever. Overall, it was a successful open house in the sense that it gave my seller the encouragement she needed.

Selling a house is very stressful. Most of my job is giving practical advice and taking care of tasks. Sometimes it is about doing something that says “We’re in this together.”

The house sold a few weeks later to a young couple who feel in love with it. The seller was very happy they loved the house as much as she did.

Talk about luck

by John Rice

I don’t know about you, but I am sick and tired of the media scaring us with doom and gloom headlines about the real estate market. It’s time for some warm and fuzzy vibes to read, so here are a few of my favorite real estate stories spanning my 17 year career.

The oldest story happened back when the market wasn’t so good. I had a young couple who had used me to buy their first house in Masterson Station. Well, it was time to move up. They found an incredible house in Copperfield that had been on the market for a while. It was a relo sale, which is when the seller has been transferred and a relocation company is involved. When the house doesn’t sell by a certain time, the relocation company buys the house and they become the seller. We wrote an offer contingent on selling their old house. It was accepted. We then sell their old house. Everything is good. Until it isn’t.

The sale of their old house fell apart…..while they were on a cruise. Yep, I had to call and interrupt their vacation to tell them that not only are they not selling their old house, they are also going to now lose their new house. It was one of the toughest calls I’ve had to make.

They came home. We put their house back on the market. We sell it again after a little while. Guess what? The Copperfield house is still on the market. Only now the relocation company has lowered the price AND replaced some of the carpet. In the end, they got their house for less money than they were paying the first time and got some new carpet too.

Years later, after moving out of state and returning, this same couple told me what they wanted in their next home. They are really good at remodeling so a fixer upper would be a plus if one was available. They had narrowed it down to two neighborhoods. The husband told me he wanted a spot to park a camper or boat. About that same time, a seller in one of those two neighborhoods randomly called me to list their house. The seller was the original owner. The house was in good shape other than some deferred maintenance but was a bit dated. As I saw the house for the first time, I remember thinking it would be a good fit to my buyers. I KNEW it was their home when I saw the extra concrete going from the driveway to the backyard where the seller told me he used to park his camper!

A couple years after this, another client sent her brother to me to talk about buying a first home for he and his wife. As he was describing what they wanted in a house, I told him that I was about to list one just down the street from his sister and brother in law as soon as the seller’s new house was done. Sure enough, they bought it and started their family there. A couple of years later, they asked me to work with them to find an entry level investment property. I had a friend who had been talking about selling a townhouse I had sold him a few years earlier and sure enough, he was willing to part with it.

Some time later, another seller was referred to me by some clients and friends. I met with her at the house she had lived in most of her life since it was built by her parents. While I was waiting on this seller to do a few things to get the house ready, another client took me out for coffee and told me he was looking for a house. His big requirement was enough space to do his woodworking. I told him about the house I was getting ready to list since it had a huge detached garage that, if I remember right, already had enough electrical service for his heavy duty equipment. He bought it.

I used to think these people and many others I have worked with were just incredibly lucky to have exactly what they wanted drop in their laps. Now I realize I am the lucky one for getting to be the hands that drop it in their laps.

Now, isn’t this better than reading about higher interest rates? Don’t worry. They will come down. The real estate market will soldier on. How do I know? Because it always has and that is because everybody has a dream about what they want in their next house, just like these friends and clients of mine.

Having a hard time selling your house?

by John Rice

Now that we have returned to a much more normal market after a brief period of utter craziness, it’s time for a refresher course on what to do if your house didn’t immediately sell.

Real estate has always been about price, location and condition. All three of these must be in balance for a house to sell. Since you can’t change the location of a house, all you can control is the condition and price.

Here is what over 17 years of experience in good, bad, terrible, average, great and crazy markets have taught me:

When you get lots of showing but no offers

This usually means that buyers think the price is realistic based on what they see online so they schedule a showing and come check out your house. If you don’t get any offers, that means their expectation did not match the reality of the house. Sometimes this can be caused by having pictures that make the house appear to be in better condition than it is, bad curb appeal of the surrounding properties, or some negative thing omitted from the listing that buyers won’t discover until they get there. 99% of the time it is just because the house didn’t “Wow” the buyers in person as much as it did online.

An old school rule of thumb is that when you have had 10 showings and no offers, it is time to reduce the price. Sometimes if the feedback from showings is all the same, you can keep your old price and improve whatever negative thing buyers mentioned. I usually prefer a price reduction because often you can spend money correcting that one big negative only to have subsequent buyers find the next big negative. There is nothing more frustrating than spending money solving a problem only to later discover you’ve got another one to solve.

When you are not getting any showings at all

Usually when this happens it is because buyers know the price is way too high and don’t even bother to come see the house. Occasionally buyers can overlook your house if the presentation of the listing was terrible but I don’t see that happen often. Sometimes it can be because you’ve got too much junk all over the house and the pictures, while good, just show a cluttered mess. The thing to do here is reduce the price to be competitive with similar houses buyers may also be considering. Something that is hard for sellers to understand is that buyers are looking at more houses than just their home. To a seller, their home is all they are thinking about. To a buyer, it is just one of several homes they can buy. Buyers have options now. You’ve got to make your house become their first choice if you want to sell.

Over the past 17 years, I have seen sellers refuse to reduce their price or do anything to make their home more appealing to buyers. They usually think the issue is with their realtor…..if only the realtor would do more open houses, if only the realtor would advertise the house, if only the realtor had glossy brochures inside the house for buyers to take home. These sellers usually let the listing expire then pick a new realtor. It is at this time that the new realtor suggest dropping the price. It is also at this time that the seller cooperates. And guess what, with a lower price, the house sells.

Selling a house is not rocket science. All you are trying to do is make your house a buyer’s first choice. Back in 2009-2011 when the market was the worst ever, I would sell houses the first day on the market and have multiple offers. Many people thought I had a magic wand back then. I put the same effort in all my listings. It wasn’t me. It was my sellers. They were realistic and took my advice.

Best way to get top dollar for your house

by John Rice

I don’t really know how to say this without upsetting some of my realtor friends, but most of the current marketing trends are just hype.

Many agents are doing weekday open houses.  Like a Tuesday or Thursday from 5-7.  Often the house sells before the open house……and if the listing had hit the market that day, that is the exact time buyers would be scheduling their showing anyway.

Many agents are doing these “Coming Soon” listings.  After making everybody wait to see it, the house sells the first day on the market for full price.  Imagine that.  Just like every other new listing that is priced appropriately.

Some say that these are the best ways to expose the listing to a market that is already hungry for new listings, and at a time when there is a shortage of houses for sale.

Here is what I say is the absolute positively BEST way to know you got top dollar:

You put the house on the market late on a Friday.  Why?  So the listing gets fed to zillow and all the other real estate sites in enough time to get on every buyer’s radar but is too late to be shown that night.  Why again?  Because more people are available to look at a house on the weekend than they are during the week.  Why do you want that?  Because you want every buyer to not only see your house, but to also see every other buyer flocking to your house.  Nothing motivates a buyer more than seeing people coming and going during their viewing.

You show the house all weekend.

And this is where the rubber meets the road.  You tell all the agents that the seller is not making a decision until Sunday evening and to submit their client’s highest and best offer.  That gives time for the house to be seen by every interested buyer.  More interested buyers means more offers.  More offers means a better price and/or terms.

 

 

Why I let my sellers stay home 2-4 on Sundays

by John Rice

The house across the street from me recently sold.  There had been open houses almost every week that it was listed.  It had tons of people come see it.

Sounds great, right?

Doing a little research, there had been 82 sales of houses priced $50k less and $50k more than this house’s list price.  That is 82 sales all year.  In ALL of Lexington. And there had probably been about half that many people come to the open houses.  I know because I was home every Sunday between 2 and 4, usually washing my cars.  Could it be that there were half as many buyers out there looking as we have had sales all year?  Doubtful.  I bet most of those people are just out on a Sunday between 2 and 4 for entertainment.

Which gets me to my point.  No offense at all to the agent who had this house listed.  The agent did a great job.  The pictures looked great.  Great marketing too.  I just don’t think open houses really help sell a house.  In the internet age, exposure is never the problem.  I think they are one of the few tasks an agent can do that a seller can see.  It makes a seller feel good.

Selling a house is a lot like fishing.  You bait the hook with quality pictures and an attractive price, drop it in the water we call the internet, and wait for a bite.  Sellers don’t like that.  Sellers want action.  An open house is something they can see.  Even if at 4:05 when you are pulling the open house sign out of the yard and telling the seller the house didn’t sell, they are happier because they saw you do something.

I often have sellers ask about doing an open house.  I guess I could do one and make them feel happy, but I normally tell them how it really works.

I tell them that open houses are the 8 track player of the real estate world.  They hark back to the days when there were no pictures except maybe a black and white thumbnail of the front of the house in the newspaper.  An open house was the only chance a buyer had to see the inside.  Now we have multiple quality pictures, inside and out, and some even have pictures to show you what the house looks like to passing airplanes.

I tell them that most people that come to an open house are either just beginning their search and not ready to pull the trigger, or are neighbors, or bored, or even thieves.

I tell them that to believe the house will sell due to an open house means that we have to believe there is a buyer out there who wants to buy the house but is too afraid to call their own agent or the listing agent to schedule a time to see it.  And in this market, doesn’t mind the risk that it will sell before the open house.

I tell them I know all this because I use to do open houses all the time until I realized all I was doing was kicking them out of their home in the middle of one of their days off work.

And they always tell me they didn’t realize all that and to skip the open house.

In my opinion, the best thing you can do when your house hasn’t sold is to listen to the market.  If you get feedback from showings and most of the buyer’s thought the price was high, the house needed paint, or there was some other negative, you should fix the issues or reduce the price.  Remember my fishing analogy?  Not responding to the negatives is like fishing with the wrong bait.  Inviting all the fish to come see your bait will get you an audience, but they won’t bite if they don’t like it.

Oh, about that house across the street.  How did the buyer see the house?  They scheduled a private showing with their own agent.