Open houses are nicest if they lead to a closing

Why have one? When the market is hot, some agents consider an open house a waste of time, unless they are trying to sell a slow-moving property.

January 04, 2004|By Patricia V. Rivera | Patricia V. Rivera,SPECIAL TO THE SUN

Realtor Jeff Bridge felt certain the three-hour open house he had planned for a Canton rowhouse would attract a swarm of potential buyers last month.

After all, he'd planned it for a weekend with few competing activities and the larger-than-usual rowhouse is in one of Baltimore's hottest real estate neighborhoods.

But to Bridge's disappointment, no one showed - not even a nosy neighbor. The morning snowfall didn't help.

"The weather was horrible, or else I'm sure we would have had lots of traffic," said Bridge, an agent with Fiola Blum Inc. in Baltimore.

Fewer than 6 percent of homes sell as the result of an open house and the effectiveness of these Sunday afternoon rituals has long been debated by real estate agents. As a growing number of home shoppers use the Internet to take virtual tours and the demand for houses remains strong, agents said, they're holding fewer and shorter open houses. Even so, some Realtors say the sessions remain an important marketing tool for the industry and a sales feature that many sellers still request.

"You have a chance to really look around without having a Realtor at your shoulder," said Stephanie Bartal, who purchased a Federal Hill home after attending an open house in November.

On that Sunday morning, the certified public accountant had just started to explore the option of buying. But the renovated two-bedroom home pleased her so much that she envisioned herself living there and decided to buy.

But not everyone sings the praises of open houses. Some agents see them as a waste of time and effort. And most industry experts report mixed results.

"They do nothing for the home seller other than attract nosy neighbors to their home," said Realtor Bill Farrell of Long & Foster Real Estate Inc., who explained that he avoids them whenever possible. "It's not such a great way for Realtors to meet potential clients. Sometimes so many people are in the house at once that it's hard to meet everyone. And not everyone signs the guest book.

"Or they give a false name and number so that you can't follow up."

The practice of opening a private home to potential buyers seemed like a lifesaver in the 1970s as double-digit, fixed mortgage rates dampened the real estate market.

That's not the case today. The real estate industry has had three consecutive years of record home sales; open houses must compete for attention with several other marketing tools, including virtual tours that include digital pictures of every room in a house via the Internet.

A survey by the National Association of Realtors shows that about 48 percent of the people who bought a home in 2003 went to open houses, compared with 28 percent in 1999. The same survey showed that 72 percent of the buyers who responded drove by or viewed a house for sale as a result of an Internet search.

"Even with the presence of the Internet, open houses are still an important part of the mix," said Iverson Moore of the National Association of Realtors.

Agents said they often don't sell homes at open houses, however. Most agents use the sessions to get leads on other buyers and sellers. And many agents said the people who visit open houses are usually good referrals to those who didn't attend.

"Often, neighbors tell their friends about homes in their neighborhood," said Gina Gargeu, owner of Century 21 Downtown.

But the hot real estate market doesn't lend itself to as many open houses, Gargeu said.

"We have had several occasions in which we advertised an open house but received a contract before the open house," she said. "We had to put a sign out saying that the property was under contract."

And the open house of yesteryear is changing. More often than not, agents said, open houses are used to revive interest in slow-moving houses. And they last only a few short hours rather than all afternoon.

But open houses still must contend with detractors who find many disadvantages to opening up a home to people who scuff up floors, leave handprints on walls, and even steal prescription medicines and knickknacks as they wander from room to room.

Those who rely on open houses say the best time of the year to hold them is late winter and early spring, when the real estate market is most active. Open houses are especially productive in February, March and April when people get the itch to get outside but they can't do much, experts said.

Gargeu, the Century 21 Downtown owner, said her office sometimes organizes multiple open houses on particular weekends to draw more people. Some years, they've even held holiday open house tours to give potential buyers a break from Christmas preparations.

"Nowadays, you have be a lot more creative with the open houses because we do have a lot of competition," she said. In the fall, for instance, her office takes advantage of Ravens foot traffic to hold open houses on streets that lead to the stadium.

Gargeu finds that interest in open houses hasn't really declined.

"Only difference is that buyers have other ways of looking at a home inside," she said. Virtual tours that provide 360-degree views of listings are becoming more common on real estate companies' Web sites.

Customers with particular interest in a home often schedule private visits once they see something they like online, agents said.

Even true believers such as Bridge acknowledge that holding an open house often is a hit-or-miss scenario.

"Sometimes you wish for the best," Bridge said, "but don't know what to expect."

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