Open Houses Can Still Pay Off, New Study Shows
April 24, 2019
If you're skeptical about the value of open houses to your time and your clients' wallet, you might reconsider, if you're in the right area.
In certain metros, homes that have open houses tend to sell for more money and spend less time on the market, a new study from the real estate brokerage Redfin finds.
Homes with open houses sell, on average, for $9,046 more and spend seven fewer days on the market than homes without open houses, according to Redfin’s analysis, which compared sales-to-list-price ratios and times on the market of homes that had an open house within their first week on the market and homes that never had an open house. But researchers do offer a possible caveat: The premium may have more to do with the desirability of the house itself and the way it is marketed than the open house itself.
Regardless, “holding an open house is an efficient way for sellers to get more eyes on the home, and a bigger pool of potential buyers can help lead to a higher ultimate sales price,” says Daryl Fairweather, Redfin’s chief economist. “In many areas, homes that are already primed for competition tend to be the ones with open houses because the listing agent knows it will attract a lot of attention and wants to set up a convenient way for multiple potential buyers to pop in at once instead of making several appointments for private tours.”
The open house premium varied by metro. For example, in San Francisco, homes with an open house during the first week sold for 7.9 percent more than their list price compared to homes with no open house. That was the biggest premium of any metro that researchers analyzed in the U.S.
“San Francisco real estate culture is dominated by open houses,” says Miriam Westberg, a Redfin real estate professional in San Francisco. “The majority of my clients attend open houses because they know it’s their best chance to see a competitive property or multiple properties on the same day. If a home in the area doesn’t have an open house, it’s often because it’s either owner-occupied or tenant-occupied. Those homes tend to sell for a bit less than comparable homes with open houses because they’re difficult to show and don’t get as much traffic or as many offers.”
Following San Francisco for open house premiums, homes in San Jose, Calif., with an open house sold for 5.2 percent more, and in Raleigh, N.C., homes sold for 4.6 percent more. In Raleigh, homes listed at the metro area’s median sales price of $286,000 could see a difference of more than $13,000 in the final sales price from the open house, the study found.
Updated: May 20, 2019