
Six steps to having a successful open house
Many decades ago, when the Texas oil boom was going bust, I was a real estate agent. When the bust finally reached bottom, I went into the flipping business full-time with a couple of partners. That meant that in addition to buying houses and fixing them up, we also had to sell them.
Flipping properties for profit means that one usually doesn't want to use a real estate agent and pay that commission. I took advantage of my past real estate experience to be the one out of our trio who would handle all the paperwork for buying and selling.
I won't discuss here how we found properites, just how we got them off our inventory, and our most successful method was open houses. Based on feedback from my real estate agent clients, my methods still work, except that they probably work better because fewer people seem to be doing open houses.
First, you have to define what you consider to be a successful open house. Finding a Buyer? Getting contacts for your database? Spending three hours of quiet time with yourself? Proving to your Sellers that you had an open house?
I'm not saying that any of those are wrong, but perhaps some of them are not the most efficient use of time. Now if you can multitask and do all of them, you might be on to something.
If all you do with your open houses is put on good clothes, leave an hour before the open starts, and spend that time putting out open house signs, I can virtually guarantee you that you WILL NOT have a successful open house, unless you're just wanting some quiet time.
My #1 purpose was always to find a Buyer, and rarely was I not successful, even in the bad oil bust economy in Houston in the early to mid-1980s. Here are my keys to getting the property sold, keys that my Clients still use:
- Price the property right — Isn't this always the most important item for getting a home sold? This is critical because most people hold open houses immediately after taking a listing.
That also happens to be the time when the property is usually overpriced. Doesn't work. All you'll get are the looky-loos who walk away wondering why you priced the property so high. After 30 days of that, you'll be convinced that open houses don't work.
It's tempting to overprice the property because your Seller will be happier and you'll get a higher commission. That's if the home sells. After it has sat there for 60 days, neither of you are happy.
You have to be honest with yourself and your Sellers. In my case, I had to be honest with myself and my partners. Trust me. We wanted the most money we could get, too!
- Know your demographics — This is critical. If you're holding an open house in a neighborhood of original owners who bought their homes in 1965, you need to know that! Upward moving Yuppies? Sinks? Dinks? Renting college students?
This is not easy to do, which is why people don't do it. In my farming area in Houston, I had all the addresses with the owners' names and when they bought their homes. That was in the pre-Internet days, so I spent a lot of time at the courthouse going through public records. It's much easier today because you can get access to those public records through the MLS or through Realist, DataQuick, and others.
- Know what churches, schools, and parks are nearby — Put this on your marketing materials. It's important!
Market to your demographics — This doesn't mean you have to discriminate. However, since you have a finite amount of money, you need to choose where to spend it. As an example, San Diego County is a very large county of 4,525 square miles comprising a city of 1.3 million on the big end and rural areas that are unincorporated on the small end. There are specific neighborhoods comprising specific demographics — Vietnamese, military, condo owners, renters, college students, gay, etc.
San Diego's most prominent gay neighborhoods are the older neighborhoods of Hillcrest and Azalea Park. El Cajon and Lakeside, in East County, are considered homophobic, at best. Why market your Hillcrest or Azalea Park property in El Cajon or Lakeside? It's not logical. Instead, find out where that demographic hangs out. Put an open house notice in the gay rags, the Seagull (Mormon, for when there's a Mormon church nearby), The Jewish Times (for when there's a synagogue nearby), etc.
Use the Super Bowl approach to marketing — What I mean here is that you should resist running a full-page ad in a magazine or newspaper. If a full-page ad costs $1,000, and a quarter-page ad costs $250, run four quarter-page ads on four different pages.
If you're putting postcard-sized ads on community bulletin boards at the grocery store, restaurant, and laundry, resist putting just one, or several under one thumb tack. Instead, put one in each corner of the bulletin board. Just like inundating the Internet with your name, you want to inundate your community with open house notices.
- Give the address on your open house sign — Very few people actually try to follow all those street signs pointing the way, especially when the first one starts at the real estate agent's house.
Instead, on each open house sign, give the address! That allows people to write it down, and if they don't have time to visit the house right now, they just might make a special appointment to see it. I have hundreds of feedback stories from people who never made it to an open house but said, "I saw your open house sign last weekend" while their agent was handing me the purchase offer.
It takes time to put the address on each sign, but instead of putting out twelve signs with no address on them, spend your time putting the address on six signs and then putting them at strategic — i.e., busy — locations.

Next post will be:
Pay It Forward

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