Do Homes With Open Houses Sell for More Money?

Homes with open houses tend to sell for more money and spend fewer days on the market—but only in certain metros.

Nationwide, homes with open houses sell for $9,046 more and spend seven fewer days on the market than homes without open houses. The benefits associated with open houses vary by metro, and they likely have more to do with the desirability of the homes themselves and the way they are marketed than the open house itself.

This is according to a Redfin analysis of homes that were listed in 2018, comparing the relative selling success—measured by sale-to-list price ratios and time on market—of those that had an open house within their first week on the market with that of homes that never had an open house.

“Holding an open house is an efficient way for sellers to get more eyes on a home, and a bigger pool of potential buyers can help lead to a higher ultimate sale price,” said Redfin chief economist Daryl Fairweather. “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.”

In the San Francisco metro, homes with an open house during week one sold for 7.9 percent more relative to their list price than homes with no open house, the biggest premium of any metro in the U.S. It’s followed by nearby San Jose, where homes with open houses sold for 5.2 percent more. In Raleigh, North Carolina, homes with open houses sold for 4.6 percent more relative to their list price than those without. For a home in Raleigh listed at the metro area’s median sale price of $286,000, that could mean a difference of more than $13,000 in the ultimate sale price.

“San Francisco real estate culture is dominated by open houses. 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,” said local Redfin agent Miriam Westberg. “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.”

In San Francisco, homes with open houses during the first week spend a full week longer on the market than homes without—but that doesn’t mean the open house is harmful. “It’s standard here to host two weekends of open houses before accepting offers. Listing agents usually prefer 10 to 14 days of active on-market time, particularly for homes with open houses, before they’ll set an offer date,” Westberg said.

In the Miami area, open houses are correlated with faster sales. A home in Miami with an open house during its first week on the market typically goes under contract within 27 days, compared with 38 days for those without an open house. And homes in the Miami area with an open house during week one sold for 1.2 percent more relative to their list price than homes with no open house.

“I usually list properties on a Thursday or Friday, then hold an open house on Saturday or Sunday. I also hold private showings because it’s so important to get as many potential buyers into the home as possible,” said Jessica Johnson, a Redfin agent in Miami. “Open houses can help homes sell faster. When homebuyers see other people at an open house, it can motivate them to place an offer more quickly than they otherwise would. I had two listings go under contract last week after just one weekend on the market. In both cases, the buyers first saw the home at the open house.”

In Newark, where open houses are rare (just 4% of homes sold held an open house during its first week on the market), homes with open houses within the first week spend 23 more days on the market than homes without open houses. Other examples are Nashville and New Orleans, where homes with open houses spend eight more days on the market before going under contract.

But just because homes with open houses spend more time on the market in certain metros doesn’t mean the open house is causing the extended time on the market.

In other metros where homes with open houses tend to spend more time on the market, it’s likely the sellers who know their home will be difficult to sell are the ones holding open houses. “When a home seller and their agent know a property is going to be a challenge to sell, they do everything they can to make it easy for buyers to see it,” said Redfin senior economist Taylor Marr. “It’s very possible these homes would have taken even longer to sell without the open house.”

It’s worth noting that real estate agents sometimes use open houses as a tool not only to market a home they are listing but to market themselves to prospective clients. This could be a reason why less desirable homes are held open, and why open houses aren’t more clearly correlated with homes selling for more money or in less time.

Baltimore is the only metro of the areas included in this analysis where homes with open houses sell for less money relative to their list price than homes without, though it’s just 0.4 percent less.

Every home is different and every home seller has different priorities. Talk to your real estate agent about whether an open house is a worthwhile tool for selling your home.

Notes on Methodology

The data used in this analysis is for homes listed in 2018, with open houses held during 2018. Only open houses held within one week of a home going on the market and homes with no open house at all were included in the data; homes with an open house after the first week are not included in the analysis. The analysis only includes open houses held on Friday, Saturday or Sunday. The home must have sold within six months, regardless of whether it had an open house or not. Metro areas with less than 100,000 home sales during the applicable time period were excluded.

Read the original article here: https://www.redfin.com/blog/open-houses-sell-home-more-money/