September means Back to Basics here at Inman. As real estate navigates the post-settlement era with new commission rules, real estate professionals from across the country will share what’s working for them, how they’ve evolved their systems and tools, and where they’re investing personally.
Over the years I’ve visited countless open houses — some with clients and some on my own. It is always a guessing game of what I will encounter when I enter: agents sitting on the couch watching a football game; others sitting at the dining room table engrossed by whatever is on their laptop or device; a few who engage excitedly until they discover I’m an agent and some who cling to me like a cheap polyester suit as I walk through the house.
I have also encountered a variety of scenarios for monitoring attendees: Some agents allow anyone to enter with no regard for who they might be. Others use the ubiquitous line, “The seller has requested that everyone entering sign in.” A few go as far as having a QR code prominently displayed that not only provides the attendee with information on the property but captures their contact info as well.
Consequently, it is easy to see, within the first few seconds of visiting any open house, which agents are viewing their presence as an obligation to be tolerated versus those who view open houses as an opportunity to build their business.
While there has been no end of disruption and confusion with the recent rule changes, there is increased opportunity as well.
Buyers, unaccustomed to any contractual requirements with their agent and, in some cases, allergic to the idea that they will possibly be required to compensate their Realtor for their representation, are refusing to sign buyer-broker agreements and are looking for other options. It’s not taking them long to realize that open houses are their ticket.
While a buyer-broker agreement is required for any Realtor to show any property to a buyer (as of Jan. 1, in states like California, every agent, regardless of their affiliation with NAR, will be required by law to use a buyer-broker agreement), no such agreement is required for anyone entering an open house.
This means there will most likely be increased traffic through open houses going forward — especially for those who have not signed a representation agreement.
The potential increase in traffic through open houses by buyers who are currently not represented by an agent should be viewed as a significant opportunity.
Although there will still be agents out there who will — for whatever reason — view open houses as an obligation, those who are well prepared for the new reality and see the new reality as the opportunity it is stand to make significant gains in their businesses.
Additionally, some state Realtor associations are even going as far as providing tools to their agents to increase open house effectiveness under the new guidelines.
California is one such example. In the past, it was possible for an agency relationship to be presumed between an open house agent and any visiting buyer. In an attempt to remove confusion, the California Association of Realtors has designed a form entitled “Open house visitor non-agency disclosure and sign-in.”
This form states:
“Agent is holding an open house or conducting in-person or live virtual tours of the Property identified above. Visitor is interested in viewing the Property. Agent agrees to show property to Visitor on the following terms and conditions:
- AGENT DOES NOT REPRESENT VISITOR: Unless otherwise agreed in writing, Agent is not working with and has not entered into a representation agreement with Visitor that would apply to the Property.
- COMMUNICATION WITH AGENT AT OPEN HOUSE/PROPERTY TOUR FOR BENEFIT OF SELLER: Any communication or sharing of information that Agent has with Visitor during the open house/property tour regarding the Property is for the benefit of the seller. All acts of Agent at the open house/property tour, even those that assist Visitor in deciding whether to make an offer on the Property are for the benefit of the seller exclusively.
- COMMUNICATION WITH AGENT ARE NOT CONFIDENTIAL: Any information that Visitor reveals to Agent at the open house/property tour may be conveyed to the seller.
- IF VISITOR WRITES AN OFFER ON THE PROPERTY through Agent, at that time Agent will disclose if Agent and Agent’s Broker represent the seller exclusively or both the seller and the Visitor.
- IF VISITOR WANTS TO BE REPRESENTED BY THE AGENT HOLDING THE OPEN HOUSE Visitor should sign a representation agreement with the Agent holding the open house such as a Property Showing and Representation Agreement (C.A.R. Form PSRA) or Buyer Representation and Broker Compensation Agreement (C.A.R. Form BRBC). If Visitor is in an exclusive relationship with another agent, this is not intended as a solicitation of Visitor.”
This form is brilliant in that it accomplishes three things:
- It reveals if any visitor has an existing agreement with a real estate agent
- It clarifies that no agency relationship is being generated by the visit
- It captures contact information for those individuals who are currently not in a buyer-broker representation relationship
This form, while not required by agents holding open houses, is an excellent tool for maximizing opportunity.
Additionally, though entrants are not required to fill out the form, we are seeing acceptance and an overall willingness in our marketplace for buyers to sign in. Some agents are also providing a blank copy of the form so that those who fill out the information can have a copy of what they signed.
Since there should be increased opportunity ahead, the key is going to be developing systems to maximize the potential number of attendees to any given open house. Agents who simply put out signs and hope for the best should not expect premium results.
Here are our recommendations for optimizing open house opportunities:
1. Commit to 2 open houses a week
To qualify, an open house must be a minimum of two hours in length. It does not, however, need to be during the “classic” times, which are typically Saturday or Sunday afternoons from 1-4 p.m. in our area.
In fact, agents have seen good results at Twilight Tours, mid-day opens and so on.
2. Commit to the basics
Although open houses are not rocket science, there are a lot of basic fundamentals to understand and implement.
These include:
A thorough knowledge of the mechanics
We do not let new agents go solo. It’s important that they understand the fundamentals and have shadowed experienced agents until they are comfortable enough to head out on their own.
A thorough knowledge of the required scripts
Agents who succeed know what to say because they have spent hours practicing pertinent scripts.
Scripts include:
- What to say when circle prospecting around the open house
- What to say when door knocking homes in the neighborhood
- What to say to visitors as they enter and ask questions
3. Determine your audience
Although it’s a given that homebuyer wannabes will attend, we tend to target our events at local sellers. If we land a buyer at an open house, we end up with one transaction. If we get a listing, we have the potential of getting many more.
This also means we focus on holding opens in homes that show well and are priced correctly. Because attendees typically show up based on what they see on their phones, the better the property looks on their device, the better the chance we will get decent traffic.
4. Develop a comprehensive checklist
Your checklist is your strategic plan and should include every step required to guarantee the best possible results.
Although many agents think that adequate preparation is printing flyers and putting out signs, those who see consistent results do much more to prepare and have a comprehensive checklist to ensure they do not miss any details.
5. Pre-qualify the property
To determine the best results for your business, ask the following questions:
- Will the time you have selected conflict with any local events? For example, holding open on Easter Sunday or Superbowl Sunday will most likely limit the number of people who show up.
- Is the property in an area you normally serve?
If you get potential clients and the home is way out of your normal service range, will you be willing to drive a long way to serve those clients?
- Is the home ready to show?
- Does it show well? Is it staged? Is it clean?
- Is it priced correctly?
Today’s buyers are very smart, and with access to online data, they know when a home is overpriced. Assuming that a seller who sets a high price will also be unreasonable to work with, they simply pass.
- Is the homeowner committed to being gone during the open house?
Occasionally, we get a client who wants to be present to answer questions. This is a lose-lose scenario, and we explain that it is not acceptable.
We’ve also had the owners park on the street and monitor foot traffic at the open house or “drop in” to see how things are going. We clarify that this type of activity will actually harm their chances of a successful event.
6. Do your homework
If that home is your own listing, chances are you will have an adequate knowledge of the pertinent facts. Others, however, including members of your team, need to have a working knowledge of the home and area.
This means time must be taken to do the required research to become knowledgeable about the property and local area.
The following are important:
- Have you talked to the listing agent to understand the seller’s motivation for selling?
- Are you familiar with the area comparables?
- Have you read through the seller’s disclosure package?
- Have you read any inspection reports, local natural hazard disclosures and so on?
- If the property is in an HOA, have you read the HOA documents to be able to answer questions?
- Are you aware of local amenities?
- Are you aware of local issues?
- Are you aware of local news that might affect the property?
7. Have an established timeline
At least 3 days prior
- Ensure the open house is entered into your local MLS so it shows up on major web portals such as Realtor.com and Zillow.
- Post the event on all of your social media sites, and include a link to the property.
The day before
- Circle prospect a minimum of 100 homes around the coming open house. Invite them to your event, and offer a free CMA to any who attend.
- Print a map of the area, and establish where you will be placing a minimum of 10 signs. Make sure you understand local ordinances for signage to avoid fines or confiscated signs.
- Go over your prep checklist to make sure you have everything ready to go:
- At least 10 signs
- Have interior signs (as applicable) ready to go — examples could include:
- Thank you for visiting our open house!
- Please remove shoes — booties provided
- Please sign in
- Please hold young children by the hand
- Any items you will be providing, including business cards, brochures, booties, QR codes linking visitors to your CRM and IDX, sign-in sheets, snacks, branded water bottles, etc.
The day of
- Prior to the open house, door knock at least 50 homes in close proximity.
- Get the home set up:
- Have all your collateral set up.
- Turn on lights, and adjust the heat/cooling.
- If the seller requires shoes to be removed or booties provided, have the booties in a container by the front door, and provide a chair for visitors to use while putting them on.
- Check for anything that might be problematic:
- Search the home for any valuables or other items that should not be out. I once found a homeowner’s NBA Championship ring left on a bathroom counter.
- Check to make sure there are no fragile objects within a child’s reach.
- Put away any toys the resident children may have left out.
- Examine the home in detail so you know all its key features.
- Once the home is completely ready to go, then exit, lock the door and head out to place your signs. If you have a second person with you, they can place the signs, or, in some cases, your team will have a sign delivery person out placing signs for you.
- Place your signs — a minimum of 10.
- After the event is done, lock the door, and head out to gather up signs. Start with the ones closest to the property so you will not have other guests waiting for you when you get back.
- Reenter, turn off heat or air conditioning if applicable, check every window and door (guests have been known to unlatch for future access), remove all your items, turn off the lights, lock the door, and head out.
8. Don’t forget: It ain’t over when it’s over
Many agents, upon driving away, assume they are done. In reality, the open house is planting the seeds, now comes the watering.
Job 1: If it’s your listing, send a written report to your seller. If it’s not your listing, send a written report to the listing agent.
Job 2: Follow up with every unrepresented potential buyer who gave you their contact info to:
- See if they have any questions.
- See if they have any other properties they would like to see.
- Ask if you can set up a buyer consultation meeting with them to cement your relationship.
Job 3: Follow up with any potential sellers who gave you their contact info to:
- See if they have any questions.
- Ask if you can set up an appointment to view their home to provide a comprehensive CMA.
- If “No,” email them a “best case” CMA, and then stay in touch.
A few years ago, open houses lost some of their luster as buyer agents were sending their clients unattended and en masse to every open house in town.
Those days are largely over — buyer-broker agreements are now the new reality. This means that open houses have once again become one of the best lead sources available.
As stated before, in my opinion, we are going to start seeing an increase of unrepresented buyers through our opens — smart agents are going to see this for the opportunity it is and – instead of doing open houses out of obligation, start seeing them for the business building opportunities they really are.
Carl Medford is the CEO of The Medford Team.
