Open house events on the increase

Holding an open house is among the most widely used real estate sales techniques, and these days, sellers and their sales agents are holding more open houses than ever.

If you doubt it, just take a drive through almost any prime residential neighborhood early on a Sunday afternoon and count the "Open House" signs, reports Jim Merrion, regional director of RE/MAX Northern Illinois.

"The growth we've seen in the last 18 months in the inventory of unsold homes has contributed to an increase in the use of open houses as a sales tool. It is an effective way to get the word out in the immediate neighborhood about why a property is appealing, and the neighbors can be your best sales team because they know people -- friends, family, colleagues -- who might like to live nearby," he said.

Carrie Georgitsis of RE/MAX Signature in the Lake View neighborhood of Chicago is among those who view open houses as a crucial tool.

"I've seen a shift in buyer behavior over the last five years," said Georgitsis. "They are doing more on-line research, which makes it easy to find open houses listed. When they like a property that has an open house scheduled, they will go to the open house, rather than have their agent arrange a private showing. Then, if they like the property, they will come back with their agent for a second look."

Georgitsis says she holds an open house for each of her listed properties twice each month.

To be an effective marketing tool, an open house must be well publicized and thoughtfully scheduled, contends Karen Hilgers of RE/MAX Blackhawk Valley in Andalusia, Ill. She believes an open house can be quite effective if done correctly.

"If the agent does an effective job of following up, it can be a very useful sales tool," says Hilgers, who believes that an open house can be a good way to get buyers already interested in the home to make an offer if they have been hesitating.

"It lets those interested buyers know they may suddenly have some competition, and that can be all you need to get an offer on the table," she said.

Agents also can learn a lot from an open house, notes Merrion.

"In many areas, especially the Chicago suburbs, listing agents usually don't attend showings of their listed properties, so they don't see first hand how potential buyers are responding. Instead, they have to rely on verbal input from buyers' agents. At an open house, the listing agent can walk visitors though the home, ask them questions and see how they react to certain features. That can help the agent and the seller take steps to make the home more appealing," Merrion said.

He also emphasizes that an open house is one of the few ways to attract "impulse buyers," the kind of buyer who sees a house for sale, takes a good look at it and falls in love with it.

Although open houses are more common now than they were three years ago, they often draw smaller crowds, according to Judy Kratville of RE/MAX Brokers in Westchester, Ill.

"Agents are holding more open houses than they used to because they are looking for buyers, while sellers want to maximize the exposure their properties garner," said Kratville. "At the same time, the number of visitors you can expect at the typical two-hour open house has declined.

"A few years ago, you might get 12 or 15 different buyers, couples or singles, at an open house. Now, the average is closer to three or four," she said

Another reason open house signs are becoming a more common sight on weekends in every neighborhood is that the average home is on the market for more than 100 days, so agents have more time to schedule an open house.

"I always try to do at least one open house each month for every property I list," said Kratville, "but two or three years ago, when the market was moving very quickly, homes often sold before I could get the first open house done."

How often does an open house actually bring in the person who buys the home?

Georgitsis estimates that in the last two years she has sold eight homes to buyers who saw a home first at an open house. However, not every agent finds open houses that productive.

"I'm not a big advocate of open houses, but in this market I'm doing more of them," said Gwen Broughton of RE/MAX Showcase in Waukegan. "Sellers want to see you doing everything you can to get their home sold." Broughton said she does regular open houses for 75 percent of her active listings.

Kathy Brothers of RE/MAX Great American in North Aurora, said that she sells perhaps two homes a year to buyers who see the property first at an open house. She schedules an open house for each active listing every six to eight weeks.

She also can be quite creative about it. Last year, she held a 19th hole open house for a property bordering a golf course, posting signs in the clubhouse and along the course and providing refreshments for golfers (or anyone else) who stopped by.

Here are consensus suggestions for open houses distilled from the views of the agents mentioned above.

Sunday afternoons remain the best times for attracting visitors to an open house although more agents are now experimenting with Saturdays or weekday evenings.

Mailing post cards inviting neighbors and prospects, as well as publicizing an open house in the local newspaper and on Web sites, such as OpenHouse.com, can maximize the drawing power of the event.

Open houses should be scheduled in the early afternoon, especially in winter, because that is when natural light is most abundant. A summer open house can be scheduled a little later or run a bit longer because the light conditions are more favorable.

Properties that are primarily of interest to investors, which often means those in need of substantial rehabilitation, usually won't benefit from an open house.

It can be difficult to attract visitors to an open house in a high-rise building or large condo complex with controlled access.

Because open houses usually are planned well in advance, sellers have the time to properly prepare and showcase their home. Be sure the home is as clean and neat as possible for the open house. Empty the garbage cans, clean out the closets, get rid of the clutter and polish the bathroom fixtures.

"What you are trying to give visitors at an open house is the sense that they are walking into a model home," said Brothers. "When you do that, you may not sell the house to the first couple who walks in, but you can generate positive word of mouth in the community about your home, and that can help attract a real buyer."