More than 50% of homebuyers report that open houses are an essential part of their home search and decision-making process.1
But when you dive into agent-reported data, the perceived ROI of open houses looks bleak:
- Just 36% of agents say they’ve ever landed a client from an open house2
- Only 4% of agents cite open houses as a top source of business (accounting for more than 25% of their deals)2
Looking at these numbers, it’s no wonder that most agents view open houses as more of a seller incentive than a lead generation tool.
But there’s also evidence that agents are looking at open houses all wrong.
San Diego team leader Kyle Whissel closes more than 300 transactions per year. He credits open houses as directly leading to at least 50 of these, resulting in $30 million in volume.
“Open house events are one of our top sources of buyer leads.” Kyle Whissel, Whissel Realty Group
Real estate coaching legend Tom Ferry assures agents that the best way to meet 10 potential sellers is not via an elaborate farming operation, but by simply hosting one “mega open house” each weekend.
And Mary Gillach, a team leader in Boston, makes a strong case for generating luxury leads through existing luxury listings. “Where do you meet a $2 million buyer? … [You] meet a $2 million buyer at a $2 million open house.”
It’s clear that for some agents and brokers, the myth about open houses generating a low ROI couldn’t be further from the truth. So, what are agents missing — and how can they break out of the status quo to begin generating major business from these events?
As we explored recent open house stats from national sources and our own proprietary data, we realized that it was imperative to break open house attendees into four important groups:
- Looky-loo neighbors
- Early-stage buyers
- Middle to late-stage buyers
And from there, we have action plans for how to engage and convert these audiences, which each have their own unique mindsets and typical timelines.
Turning looky-loo neighbors into down-the-road sellers
The real estate industry often disparages “open house looky-loos” who come from down the block to check out a listing that’s being held open. But while looky-loo neighbors may seem pesky, they’re actually the best chance agents have to win more seller business from an open house event.
Why looky-loos matter
In 2019, the NAR reported that 75% of sellers interview just one agent before deciding on a listing specialist — and as they consider who is best to represent them, the agent’s reputation is cited as the single most important factor.1
Real estate agents spend a small fortune flyering and farming neighborhoods, in the hopes of gaining a good reputation and building up their seller business in the area. So when a looky-loo wanders into an open house, offering them a chance to make the case in person, they should stand at attention — rather than viewing them as an event disruption.
If a looky-loo wanders in to your open house, work to offer them personalized attention and to build a fast, personal rapport. Ask questions about their home, how long they’ve lived there, what they like about the area. In a five-minute interaction, you can become the ONE agent that these hyper-local residents know, and the ONE agent who they’ve had a no-pressure conversation with. Best of all, you can do it all without farming them for 18 months or more.
Looky-loo action plan
- Bare minimum: Collect their contact information via an automated software like Spacio, and set them up for market updates and local and/or comparable property listing alerts. Talk with them about their personal situation, without being too forceful.
- Go beyond: Set them on a long-term digital remarketing plan, to ensure they see all the homes you are listing and holding open in their area. You can also run branded (non-listing) ads that promote your availability as a local, no-pressure resource. The messaging for these ads can be as simple as, “Call me today with your real estate questions — no strings attached!” Proving you’re a trusted resource is paramount to nurturing these prospects over the long-term.
Uncovering the motivations of lurkers
“Lurker” is an internet term that describes the folks who join an online community but don’t typically post, like, comment or engage with the other community members. Within real estate, lurkers are EVERYWHERE. Consider that Zillow has 200 million unique visitors each month3, but U.S. home sales have remained at 5.5 million for the last two years. People like to lurk on real estate listings… and sometimes, they’re bold enough to do it in person.
If you’ve ever hosted an open house and watched as a couple furtively ducks in through the front door, barely acknowledges your existence and then talks in hushed tones as they tour the entire property and then leave, then you know what a real-life lurker looks like.
It can be tempting to roll your eyes at lurkers, but once you take some time to uncover why they’re so darn secretive, you’ll be in a much better position to help them as they dart through your open houses.
Why lurkers …. lurk
In most cases, lurkers are extremely early-stage buyers who are just trying to get a feel for the market and how they fit into it. They might not understand open house etiquette, or maybe they had a bad experience with an overzealous agent at a different property. Perhaps they know they’re months (or even years) away from being able to buy a house, but they still want to begin educating themselves on how to make it happen. Maybe they’re renters who are tired of paying a landlord… but who aren’t yet sure how their budget would be accommodated in the housing market.
Just 4% of buyers go to an open house as a first step in the buying process, while 44% of buyers start with casual internet browsing1. That means that your open house lurkers have closed their real estate apps and gotten off their couches — and they’ve walked into YOUR open house. They’re taking a tentative step into the market and you might be the only person to see them do it.
The one way to break through with this group is to start uncovering their motivations and then work them slowly from there.
Lurker action plan:
- Bare minimum: Ask them to sign into your open house software and be sure that your form has fields that help them to indicate where they are in the home buying process. Ask if they are represented by another agent, if they think they need help getting pre-approved for a mortgage, and their general timeline for buying (and be sure not to cap that timeline at 12 months).
- Go beyond: Reach out personally after the open house to say that you enjoyed meeting them and you’d love to talk with them more to talk about what their goals are. By talking about “goals” and not a “plan,” you show that you’re in it for the long-term. If you have a testimonial of another buyer who you guided through a longer buying process, send their review along.
Capturing and converting early-stage buyers
According to internal Spacio data, the bulk of open house attendees are early-stage buyers who already have some skin in the game:
- 71% of buyers who sign into open houses via Spacio state that they are not yet represented by an agent.4
- 50% of attendees say they already have pre-approved financing.5
That’s pretty much the agent’s dream, right? They’re educated enough to know that they should be pre-approved, but they’ve not yet found the right agent to work with. Jackpot! So why aren’t agents converting more early-stage buyers via open houses?
Why agents fail with early-stage buyers at open houses
- Open houses are BUSY and some attendees may engage with the agent for only a few seconds or a minute at the most.
- If buyers self-identify as “just looking” to an agent, the agent may brush them off in favor of speaking to a buyer that seems to be genuinely interested in the property at hand.
- If buyers identify something they don’t like about the property, their comments may lead the agent to focus on their ability to sell the listing — rather than their ability to help the buyers find the right property down the road.
- If the agent doesn’t record the contact information and a few insights about the buyers as they meet them, they will likely forget to follow up in the future.
How agents can better understand early-stage buyers
While it may be difficult to win these buyers in lightning-fast open house interactions, new stats give a window into how agents can work to convert them after the fact:
- 56% of today’s buyers say that finding the right house is the hardest part of buying a house.1
- 90% of all buyers say that open houses are a valuable source of info.1
- 97% of attendees who signed into Spacio provided their email address.4
In short, buyers are hungry for information about inventory and they find open houses to be helpful in their house hunt. Agents shouldn’t be afraid to ask for contact information, especially if they can demonstrate that they have even more intel that could help these early-stage buyers find their dream home. If you have access to pre-list inventory — whether through your brokerage or through informal channels like agent networking — be sure to play that up with open house attendees. Then, use it as a reason to request their contact information and begin your outreach plan.
Early stage buyer action plan
- Bare minimum: Capture attendee contact information and put these early-stage buyers on listing alerts for similar properties in the area. If you have a branded app, send them instructions for how to download it.
- Go beyond: Work to set up an in-person meeting where you can discuss where they are in the process and what types of properties they’re most interested in. Help them create a buyer timeline and promise to send them any pre-list homes that you encounter. Reinforce that the goal is to help them find their dream property, together. After all, no one wants to spend every weekend on the open house circuit!
Winning over late-stage buyers
If 71% of open house attendees don’t have an agent, that means that about 30% of them do. And that means they’re off-limits, right?
Well, yes. You can’t represent them on the buyer side, but you can help them see that your listing is the right one for them. According to internal research done by Tim and Julie Harris, plenty of buyer attendees are ready to make an offer based on what they see during an open house. So, be careful not to confuse ready-to-act buyers for early-stage buyers.
“According to analytics from more than 1,000 homes we’ve sold and thousands of coaching calls we’ve conducted, 20% of all buyers shopping in the low- and mid-price points go to open houses so they can decide which house they want to buy that very weekend. At higher price points, including the luxury tier, 30% of all buyers go to open houses so they can decide which house to buy that weekend.” — Tim and Julie Harris
Late-stage buyer action plan
- Bare minimum: If they are with their agent, introduce yourself and give the agent your card. While they may not give up much, you can work to build a good rapport and to show them that you know what it’s like to work under high stakes. If they aren’t with their agent, be sure to offer your card and contact information and to see if they have any specific questions you can answer about the listing. Ask for the name of their agent to see if you know them personally. Last, listen carefully to see if you can identify any features of the house that make them uneasy.
- Go beyond: Follow up with their agent after the open house, to let them know you’re thinking of their buyer and you are curious if they need any more information. If they inquired about something specific, like the age of the roof or the last time the chimney was swept, offer up that information. Show that you’re eager to assist, without seeming like you’re desperate for the sale.
Technology can help facilitate higher open house ROI
When you only have a few moments to catch the eye and the attention of an open house attendee, you may not know where to focus your attention and time. By working with an open house software that can uncover a buyer’s timeline and motivation, while also collecting and sync-ing their contact information to your CRM, you can remain casual and professional in your open house interactions.
The result? A top-notch first impression, with the intel needed to begin communicating and converting the open house leads that come from lurkers, looky-loos and buyers across every stage.
Get a demo to see how Spacio’s forms can be customized to gather more information and convert more open house leads.
- National Association of REALTORS® 2019 Profile of Buyers and Sellers
- National Association of REALTORS® 2019 Member Profile
- Google Analytics and Adobe Analytics
- Spacio internal data