OCTOBER 1998
PUBLICATION 1258
A Reprint from Tierra Grande, the Real Estate Center Journal
Survey Results
Survey Slams Door on Open Houses
By Jack C. Harris
D
etermining the best way to contact would-be
homebuyers and sellers is critical to the residential
agent. Today’s marketing arsenal includes the Internet,
cable television and low-tech innovations like yard signs that
transmit radio messages. At the same time, the sales agent’s
options include such long-time staples as the open house. The
question on the lips of today’s busy agent is: which techniques
work best? A new Real Estate Center survey helps answer
that question.
Whether or not to hold an open house is of particular concern
to many agents. With an open house, an agent must be on
site for the duration of the showing and be ready to impress
each potential buyer who walks in the door. Considerable time
(usually on the weekend) and effort are required. And, safety
is a growing concern because there is no way to know whether
a visitor is a serious buyer, just curious about the house or
has more sinister motives.
Although open houses are popular with sellers, they appear
to be losing their appeal among agents. Sellers see the open
house as an indication the agent is actively promoting the
listing. Agents know, however, the odds are long that an open
house will produce a buyer.
In their 1990 book, How to List and Sell Real Estate in the
‘90s, Danielle Kennedy and Warren Jamison estimate the odds
are 250 to one that someone attending an open house will buy
the home. On the other hand, the authors state that holding open
houses may be a good way to interest people in other listings or
to generate new listings from those who must sell before buying.
The National Association of Realtors (NAR) polled agents
in 1995 and reported that open houses led to only 7 percent
of all home sales. Referrals were the biggest sales-generating
factor, accounting for 29 percent of all sales.
To determine what Texas sales agents find to be the most
effective technique for attracting buyers and sellers, in early
1998 the Real Estate Center sampled Texas licensees holding
the Certified Residential Specialist (CRS) designation. More
than 36 percent responded.
Public Open House Proves Ineffective
Almost all (97 percent) respondents have used public open
houses (Table 1). But only 41 percent of them say the technique
helps sell the house. While 32 percent agree that public open
houses attract many potential buyers, 62 percent believe most
people attending open houses are not serious buyers. In fact,
three out of four (77 percent) respondents say most open houses
are held merely to appease sellers. On the other hand, only
27 percent characterize holding an open house as a desperation
tactic for homes that are not attracting interest.
Almost three-fourths of survey respondents (73 percent)
think open houses are effective in interesting buyers in homes
other than the one being shown. Slightly more than
half (55 percent) believe open houses help generate
new listing contracts. While these results are not
much consolation to sellers, the numbers show that
open houses may not be a totally inefficient use of
the agent’s time.
A slight majority (59 percent) says that open houses
are especially important for unusual homes. Fewer
(45 percent) agree that open houses are more effective
for newly constructed homes. Respondents split (48
percent agreeing) on the idea that a home should be
easy to find before considering an open house. Few
(16 percent) think open houses should be restricted
to the most active selling season.
Agent Open Houses Work Better
The effectiveness of agent open houses is more
apparent in the survey. An agent open house is held
when the listing agent invites other agents to view
the house when it is first placed on the market. The
hope is that one or more agents have a buyer inter-
ested in the home. Almost all (99 percent) respondents
use the technique, and 59 percent of these believe it
is effective in selling homes (Table 2).
An even larger majority (65 percent) agree that
agent open houses are more effective than public ones,
although holding one does not preclude the other.
Only 43 percent believe that holding an agent open
house is essential to the sale of unusual home styles.
While a slight majority (52 percent) agree that
most good agents are too busy to attend open houses,
nearly half (47 percent) say that an incentive—such
as a door prize or food—is essential to attracting
agents. Most (83 percent) agree that the open house
should be held when the home is first listed.
Effective Listing Methods
O
pen houses are merely one of many tech-
niques for attracting business. The survey
asked respondents to evaluate the effective-
ness of various tools (Table 3). Two methods—re-
ferral and community involvement—stand out. Both
rank first in effectiveness and popularity. Despite
advances in electronic communications, it appears
that personal contact still matters most.
Open houses rank third in familiarity but drop to
seventh in effectiveness. Conversely, using the
Internet ranks seventh in use but fourth in effective-
ness. Some of the techniques not widely used were
much more highly regarded by those most familiar
with them. When the scores are compiled for only
those respondents using them, newsletters and tele-
vision ads move up two positions in the rankings.
Evaluating Proven Techniques
One of the keys to selling a listing is getting a
serious buyer to see the home, especially in a highly
competitive market. Table 4 shows how common
methods for attracting buyers are evaluated by re-
spondents. Of these, three particularly stand out.
Yard signs, the Multiple Listing Service (MLS) and
referrals score substantially higher. Although these
approaches have been around for a long time, agents
still feel they are the most effective.
Yard signs and the MLS are the most widely used
tools, along with open houses, for attracting buyers.
Note that open houses, however, rank tenth out of 13
in effectiveness. Although more than 95 percent of
respondents use classified newspaper ads, agents
rank it ninth in effectiveness. Perhaps it is because
these techniques also give publicity to the firm that
they are so commonly used in spite of their limited
effectiveness.
Table 1. Respondents’ Experience with Public Open Houses
Percent Using Percent with
Category of Respondent Open House Favorable Results
Total sample 97.1 41.2
Position in firm:
Owner 97.1 22.2
Broker/Owner 96.7 41.4
Manager 97.1 50.0
Broker 97.8 44.4
Salesperson 96.2 41.3
Type of firm:
Independent, single office 95.5 33.3
Independent, multiple office 100.0 62.5
Franchise affiliate 97.4 35.1
Number of agents in office:
1-15 96.6 33.9
16-35 96.6 46.4
More than 35 100.0 46.0
Market area:
Large central city 96.3 38.5
Suburb of large city 97.5 44.9
Small metropolitan area 92.0 43.5
Small city 100.0 34.4
Rural area 100.0 50.0
Years of experience in sales:
1-10 96.3 23.1
11-15 95.9 48.9
16-21 98.0 42.9
More than 21 97.7 42.9
Number of homes sold last year:
1-12 95.7 54.5
13-29 96.9 38.1
30-45 95.3 48.8
More than 45 100.0 24.1
Table 2. Respondents’ Experience with Agent Open Houses
Percent Using Percent with
Category of Respondent Open House Favorable Results
Total sample 99.4 58.8
Position in firm:
Owner 99.4 44.4
Broker/Owner 96.6 75.0
Manager 99.4 50.0
Broker 100.0 54.3
Salesperson 100.0 60.3
Type of firm:
Independent, single office 97.7 73.8
Independent, multiple office 100.0 62.5
Franchise affiliate 100.0 53.9
Number of agents in office:
1-15 98.2 60.7
16-35 100.0 65.5
More than 35 100.0 54.0
Market area:
Large central city 100.0 59.3
Suburb of large city 100.0 57.5
Small metropolitan area 100.0 47.8
Small city 96.9 77.4
Rural area 100.0 66.7
Years of experience in sales:
1-10 100.0 40.7
11-15 100.0 59.2
16-21 100.0 65.3
More than 21 97.7 66.7
Number of homes sold last year:
1-12 100 65.2
13-29 98.5 59.4
30-45 100.0 64.3
More than 45 100.0 48.3
Most Effective Methods for Selling Specific Homes
What is the best way to impress on a potential buyer the
advantages of buying a specific home? Survey respondents evalu-
ate the alternatives in Table 5. There appears to be no substitute
for a house that is competitively priced and decorated to show
well. Well-presented information about the house and surround-
ing area likewise is highly regarded. Techniques that rank low
are those involving extras, such as seller financing, warranties
and offers of buyer representation. Even the lowest score is above
the mid-range, indicating all techniques are regarded as at least
somewhat helpful.
This survey shows that many agents find public open houses
troublesome, dangerous and generally a waste of time. A mi-
nority consider them useful. In fact, only 24 percent of high-
Table 3. Ratings of Techniques for Obtaining Listings
Percentage
Technique Using Average
Technique Rating*
Referrals 100.0 4.64
Community involvement 97.6 4.05
Advertising the firm—newspaper 91.1 3.33
Internet home page 80.1 3.28
Cards to neighbors of existing listings 94.7 3.15
Neighborhood newsletter 64.8 3.09
Open house on existing listing 96.5 2.96
Offer of free CMA 88.7 2.91
Advertising the firm—television 48.1 2.79
Calling or visiting FSBOs 79.2 2.76
*Scale of 1 for “not useful at all” to 5 for “very useful.”
Table 4. Ratings of Techniques for Attracting Buyers
to a Specific Home
Percentage
Using Average
Technique Technique Rating*
Yard signs 98.8 4.68
Multiple Listing Service 98.2 4.66
Referrals 97.6 4.30
Listing on Internet 91.0 3.31
Newspaper feature ads 91.8 3.24
Direct mailings 94.0 3.24
Local magazines 86.7 3.21
Agency’s exclusive publications 63.0 2.97
Newspaper classifieds 95.3 2.95
Public open houses 98.8 2.88
Newsletters 68.5 2.79
Television listings 44.5 2.57
Homebuyer seminars 48.4 2.27
*Scale of 1 for “not effective at all” to 5 for “very effective.”
Table 5. Ratings of Techniques for Making the Sale
to Someone Who Has Seen the Home
Percentage
Using Average
Technique Technique Rating*
Home competitively priced 100.0 4.88
Home decorated to “show well” 98.2 4.63
Information on schools and services 98.8 4.27
Well-composed fact sheet 97.6 4.21
Information on the area 98.2 4.11
Evidence of energy efficiency 95.2 3.72
Offer of home warranty 98.2 3.53
Buyer representative agreement 90.4 3.35
Offer of seller financing 90.4 3.11
*Scale of 1 for “not helpful at all” to 5 for “very helpful.”
Look Who’s Talking
The information described in
the article was gleaned from a
survey of Texas licensees, all of
whom hold the Certified Resi-
dential Specialist (CRS) designa-
tion. Questionnaires were sent
to 489 licensees, and 175 useable
responses were returned, a 36 per-
cent response rate. In addition to
the questions described in the
article, the questionnaire in-
cluded a set of questions about the respondent (oth-
erwise, the response was totally anonymous).
Number of Percent of
Respondents Respondents
Position within the firm:
Salesperson 79 46.5
Broker 48 28.2
Broker/Owner 30 17.7
Owner 9 5.3
Manager 6 3.5
Type of firm:
Franchise affiliate 88 51.8
Independent, single-office 44 25.9
Independent, multiple-office 40 23.5
Market location:
Suburb of a large city 80 47.1
Small city 32 18.8
Large central city 27 15.9
Small metropolitan area 25 14.7
Rural area 6 3.5
Number of agents in the
office:
1-15 59 34.7
16-35 61 35.9
more than 35 50 29.4
median 25
Years of experience in real
estate sales:
1-10 28 16.3
11-15 49 28.5
16-21 51 29.7
more than 21 44 25.6
median 17
Homes sold during the last
12 months:
1-12 22 13.5
13-29 65 39.9
30-45 44 27.0
more than 45 32 19.6
median 28
volume agents feel open houses are effective. The open
house does not rank high among techniques for generating
listings or for attracting buyers. Agents who would like
to stop holding open houses can find support here for that
decision. Conversely, agents who have found the tech-
nique effective should know that a sizable group of agents
share their experience.
Dr. Harris is a research economist with the Real Estate Center at
Texas A&M University. Thanks to Chuck Venezia of Century 21
Executive Realty in Houston and Mike Beal of Century 21 Beal,
Inc., in College Station for helping develop and test the survey. Special
appreciation goes to all licensees who returned completed questionnaires.
©1998, Real Estate Center. All rights reserved.
Director, Dr. R. Malcolm Richards; Associate Director, Gary Maler; Chief Economist, Dr. Mark G. Dotzour; Senior Editor,
David S. Jones; Associate Editor, Wendell E. Fuqua; Assistant Editor, Jenifer V. Hofmann; Assistant Editor, Kammy Baumann;
Art Director, Robert P. Beals II; Circulation Manager, Gary Earle; Typography, Real Estate Center; Lithography, Wetmore
& Company, Houston.
Advisory Committee: Gloria Van Zandt, Arlington, chairman; Joseph A. Adame, Corpus Christi, vice chairman; Celia
Goode-Haddock, College Station; Carlos Madrid, Jr., San Antonio; Catherine Miller, Fort Worth; Kay Moore, Big Spring;
Angela S. Myres, Houston; Jerry L. Schaffner, Lubbock; John P. Schneider, Jr., Austin; and Pete Cantu, Sr., San Antonio,
ex-officio representing the Texas Real Estate Commission.
Tierra Grande (ISSN 1070-0234), formerly Real Estate Center Journal, is published quarterly by the Real Estate Center
at Texas A&M University, College Station, Texas 77843-2115.
Subscriptions are free to Texas real estate licensees. Other subscribers, $30 per year, including 12 issues of Trends.
Views expressed are those of the authors and do not imply endorsement by the Real Estate Center, the Lowry Mays College
& Graduate School of Business or Texas A&M University.
