As someone who’s done any, and just about, everything one can do to generate business in real estate I can submit that making open houses an essential part of your lead generation system is a horrible business strategy.
It’s a fact that agents do occasionally sell a few homes or gain a couple leads from hosting open houses. But one might be hard pressed to find an agent who’s been able to build their entire business around it.
Proper lead generation requires an agent to leverage both time and resources in order to achieve the main objective of gaining a buyer or seller. Open Houses don’t provide either. It is an activity that could lead to you gaining a buyer but it’s a right place – right time tactic. For this activity to become a profitable return on investment the agent has to commit to doing open houses regularly to put themselves in the position of “getting lucky.” This does not help the agent to leverage their time or resources. They’re stuck at a house for several hours waiting for someone to show up. This is essentially the traditional form of retail sales found in department stores.
What you want to do as an agent starting their business is to figure out ways you can scale up through using appropriate resources to gain leads such as doing business with predictive analytics companies like Smart Zip (just use Urhous’s name for a better rate), to gain more listings or spend time in places where you might be able to build a relationship with a number of people who will come to know you, like you, and trust you, such as giving your time to a charitable organization, your church, or the PTA.
There are obviously many more ways you can scale up but these are just a couple options you can place in your tool bag to get going.
Bottom line is if you’re going to make open houses a part of your business strategy be ready to commit to a long term weekly practice. But it will certainly be a wiser use of your time and money to figure out better ways to bring in business where you’re able to scale.
Author – Steve Gunter is the CEO and Editor in Chief for Urhous Real Estate and Media Group. Steve enjoys running, eating (especially a great slab of ribs), and although he can’t swim, going to the water park with his wife and kids.