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During the marketing
period you and your seller might discuss various ideas aimed at increasing
exposure for the home. These range
from newspaper and magazine advertisements, to TV spots and direct mail. You will have prepared your seller to understand that an
endless string of any type of promotion probably will not produce a buyer. It is important to know
which types of exposure are effective in producing showings that lead to offers,
and which are not, so that efforts can be directed toward the effective types.
It is not unusual in major markets that, on the average, more than nine
out of ten buyers (over 90%) come with another agent as a result of the
effectiveness of the MLS. Signs and open houses often account for the remaining sales,
each producing less than 5%. When
not used in conjunction with an open house, newspaper ads, magazine ads, TV
spots, direct mail, personal contacts, et cetera, altogether account for a very
small portion of all sales. The reason for this is that most serious
buyers recognize the overwhelming efficiency of searching for their home with an
agent compared with attending an endless number of open houses, driving down an
endless number of streets looking for "For Sale" signs, or reading an
endless number of real estate ads. Also,
most ready buyers are too impatient to wait for the year when some strange real
estate agent will walk up and announce that their dream house has just been
located. "Word-of-mouth"
is not a factor in major-market home selling. So, you ask, why do agents
and real estate brokers spend time and money doing what doesn't work?
The reasons vary, but some ideas follow:
Remember that the
likelihood of a buyer buying the exact home advertised, is less than 1 in 400.
It is interesting to note, however, that an ad for any
home even roughly similar to your seller's has at least a small chance of
generating a buyer for your seller. Verify the above
generalizations as they apply to your local market.
Can you generate any hard data? It
is your job to know what works. Does
your MLS database record the name of the selling agent as well as that of the
listing agent? Can you conclude
that when these names are different, the buyer was most likely obtained through
the MLS? When the listing agent is
also the selling agent, can you conclude that the buyer came from a sign, an
open house, a newspaper ad, et cetera? During the marketing
period, constantly reinforce the message from your listing presentation: There
is no magic. Re-focus your seller's
attention on the type of exposure that is most likely to be effective as well as
the critical factors: Price, condition, terms, and availability, all of which
are firmly within his control. But
if your seller asks for an additional ad, give it willingly, reminding him in
advance that it will not work, and reminding him afterward that it did not work. Let us examine the open house concept from
the standpoint of the seller. First,
in most major markets an open house will not be an effective means of locating a
buyer. Serious, focused buyers are
conducting efficient home searches through an agent who can access the MLS,
provide full information on homes that meet the buyer’s needs, and can show
homes at times other than 1PM to 4PM on Sunday.
Although an open house will not detract from the effort to find a buyer,
there is potential exposure to unsavory elements of the population who might
seek to pilfer valuables or prescription drugs. Your seller needs to understand this risk that hopefully is
very small. As an agent holding an
open house, you will need to be alert to possible theft risks as well as risks
to your personal safety. Be
especially alert to visitors who engage you in conversation while their
accomplice roams thorough the home. If
thieves pose as neighbors, it is hard to tell the difference.
Keep a special eye on visitors who arrive on foot: These are usually just
neighbors who want to have a look, but might be thieves who do not want their
car or its license plate to be seen. From the agent’s perspective, an open house
event can be a valuable source of new business.
Those exceptional agents who have perfected their open house technique
find they need no other source of new business.
But this method of operation is not for everyone.
It takes a unique personality. Nevertheless,
if you find you are spending time holding open house, be sure to take your best
shot at selling the home and at selling you.
The critical factor will be for you to become a person, as opposed to a
real estate agent, when the visitors enter the door.
Be sure to take some reading or paperwork for the slow times. Brokers’ open houses generally have only
one value, to provide an opportunity for telephone duty agents who will be
getting calls, to have a first hand look at the property and be equipped to
describe it in glowing terms. Asking
the agents visiting a broker’s open house to give a price opinion is not fair
when they have not had the opportunity to do a market analysis. Do you think that 25 uninformed opinions are better than your
market analysis? Please review the
market value analysis method (appraisal style). Are you not the authority?
Are you a bit less than confident in your ability?
Do you need to spread the blame? Be
careful about the message you are sending. |
