A survey conducted in Texas by the Real Estate Center at Texas A&M University (recenter.tamu.edu) says, “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.”

The National Association of Realtors polled agents and found that open houses led to only 7 percent of all home sales. Referrals were sited as the biggest sales factor at 29% of all sales. In a 2005 profile of Home Buyers and Sellers, also conducted by the NAR, 42% of home buyers found open houses to be "Very Useful" as an information source and 55% said they used open houses as an information source in their search but of the nine categories in the chart showing where buyers first learned about the home they purchased, open houses were not even listed.

The Texas survey which had 36% of all Certified Residential Specialist license holders in the state respond, found that 97% had held open houses but only 41% said they were effective. According to the article associated with the survey, “Survey Slams Door on Open House” (http://recenter.tamu.edu/pdf/1258.pdf), “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) of the respondents say most open houses are held merely to appease sellers.” In addition the survey found that three out of four agents think open houses are effective in interesting buyers in homes other that than the one being shown.

The Open House has been a staple of selling homes for a long time and although we are seeing agent resistance and even data demonstrating they are not very effective I don’t see them going away anytime soon. As long as there are sellers out there who see value or at least believe there is value in holding an open house, there will be agents who sit in houses on weekend afternoons.

If you enjoyed this series of posts on open houses take a look at the complete article located on my website at “Selling a Home: Should you have an Open House” and let me know how you feel about the topic as a seller, buyer or agent?

How do Realtors and Agents Really Feel about Open Houses?

The opinions of Realtors/agents are as diverse as sellers when it comes to doing the Open House. One agent said people attend open houses to compare the house to the one they really want to buy, to gain a better understanding of what is on the market before making a decision, to see what their neighbors house looks like and finally to get decorating ideas. Since none of these is valuable to the seller he recommends avoiding the hassle of open houses.

So what are other agents saying about holding an open house? I found the following agent comments on the internet in various articles. "I do not see any need for open houses right now, houses are selling quite rapidly and sellers can focus on other items of importance." Another agent says she "very rarely" has open houses now because buyers shopping on the Internet can see pictures or take virtual tours of homes. But then there is this, “The open house is the best way to market a home, the more people we can get to look at their house, the more opportunity they have to sell the house and get top dollar for it." Here is one agent who says it pretty straight, "I don't believe in Open Houses. They rarely bring buyers." Here are a few more, "The more potential buyers you can get to view your home, the better chance you have to sell it” and “Open houses can provide instant feedback to sellers, as well as word of mouth once neighbors know it's on the market.” And finally "I hold an open house when I have a nice house in a nice area; I don't like to hold them for homes when people are still living in them. I don't want to have to watch their stuff."

Check back tomorrow and I will share the research I have found about open houses and make a few final comments of my own.

In other news, Housing Tracker reported yesterday there were 8,066 homes on the market in their defined Sacramento market. This is up 1.4 percent from the previous week and 4.5 percent from one month ago. They also reported the median price of a home on the market is up in the past week by $900 to $389,900. The Mortgage Bankers Association reported today that despite increases in rates applications increased last week. See the full story on the California Association of Realtor website.

Is Having an Open House Worth it?

Even if the open house is not the most effective way to sell a home there are other reasons to hold them. You can't always count on agents to sell your listing. Sometimes agents don’t know their clients well and don't show them a listing that might work for them. In addition as all agents know, clients change their minds and don’t always tell us. A certain number of buyers find the home they ultimately buy on their own and often at an open house. Finally buyers sometimes will not make an appointment to see a house if the listing information is not exactly what they are looking for. This same buyer will stop at an open house because there is no commitment and may be surprised to find they like the house much more than they did when they were reading the listing.

Some sellers wonder if the Open House is worth the work and inconvenience. Some even complain that agents only do open houses to pick up clients, not to sell their home. Others worry about having items being taken from their homes. Other sellers expect their Realtor to hold open houses, so agents, regardless of their personal feelings about sitting on homes, will do what makes their client happy. “My seller thinks they're important, so I do them” is what many Realtors feel and say when it comes to open houses. But then there are sellers who wonder why they should open their homes to the public if most people coming through are not serious buyers. Preparing for an open house is a great deal of work because the house should be “perfect” and then you have to be away for most of a day, not to mention wear and tear on the house and the risk of theft. "You get Lookie Lou's trying to pick up some decorating hints and curious neighbors who always wanted to know how your house looks on the inside," said Eric Tyson and Ray Brown in their book House Selling for Dummies (Hungry Minds, Inc., 1999). One client who declined using the open house as a marketing tool said. “I don’t want to lose control of who is actually coming into my home.” Clearly not having open houses is easier for the seller and agent.

Tomorrow I will write about what other Realtors and agents are saying about holding open houses and then on Thursday I will share the research I have found regarding the use and effectiveness of open houses and some final comments from me.

Selling a Home: Should you have an Open House?

Can anyone remember when open houses were not used to help sell a home? Help is the operative word, as holding open houses is not a primary marketing tool to sell a house. More and more agents are saying they are a waste of time, especially successful agents who feel like holding an open house is more like fishing for prospective clients than a potential buyer of the home being held open.

My personal experience is, as much as I would rather be doing something else with my weekend afternoon time, they have led to sales and new clients. What is the relationship of house sitting hours to finding a buyer or new client? I would estimate it at about 65 to 75 hours per “catch,” which means Open Houses may not be the most effective use of time for me or my sellers.

Over the next few days I want to look at some data on holding an Open House, determine if sellers expect them, find out what other agents say and finally answer the question above, should you have an open house if you are selling a home?

Rates and ARM use Decline

According to some economists inflation is being held at bay, “The most recent economic indicators released this week showed that inflation is, indeed, being held in check," said Frank Nothaft, Freddie Mac vice president and chief economist. With good news on inflation the mortgage rates are down for the second straight week.

According to Freddie Mac, the national average on a 30-year fixed-rate mortgage dropped to 6.32 percent from 6.34 percent the previous week. The average rate on a five-year adjustable-rate mortgage also decreased to 5.96 percent this week but the average rate on a one-year ARM edged up to 5.41 percent.

With the recent run up of rates it is not surprising there has been a drop in California of borrowers electing to finance their homes with adjustable-rate mortgages. According to DataQuick Information Systems, 51.9 percent of all home buyers financed their purchases with an ARM in February, down from 63.7 percent in January, 68.7 percent in December and 70.9 percent in November.

Read more here
DataQuick: Steep drop in California ARM use
Realtor Magazine: Mortgage Rates Dip for 2nd Week

Primera Realty

In all my excitement about moving my business to Lyon Real Estate I neglected to take the time to thank the team at Primera Realty for all they have done for me. If it was not for this small company and a Broker like Kurt Colgan, who is dedicated to teaching and helping new agents learn the increasingly complex world or property transfer and superior customer service from a team of professionals, I would not be where I am today. Sometimes we have to leave before we realize how important what we left behind is. I sincerely apologize for not making this a part of my announcement yesterday.

As a brand new agent, even with some real estate investing experience, I know I would not have been successful starting at one of the big companies. I needed experienced agents I could call and get answers from on a 24 hour a day basis. Believe me, I made lots of calls and asked even more questions. Kurt and his team were always there to answer the questions and provided guidance that helped me give a level of service to my clients that I couldn’t have, had I not had the support at Primera. I love what they did for me and as I move on to new challenges and experiences I will miss the Primera “family.”

If you know some one who is thinking about becoming a Realtor, let me know, I would be happy to talk with them and share my experience.

First Full Day of Spring – Time for New

I have two bits of exciting news today and both are new for me on this sunny (so far) first day of spring. First I have started a second blog as part of the community posts on Rocklin & Roseville Today. This is a great website and they naturally concentrate on local news which will allow me to narrow some of my Greater Sacramento themes back to the area I call home and have so much experience in. If you haven’t visited them yet, take a look. Right now my blog is titled “Real Estate” but we will probably change that over the next few weeks as I get a better feel for the new blog. You can look at my first post here.

The second new part of my life is my association with Lyon Real Estate, which starts today. With all the changes affecting the real estate market I want to be in the best possible place to serve friends and clients. Lyon is that place. They have made incredible strides in the systems and support they provide to buyers, sellers, and agents.

I am excited for the opportunity to join Lyon Real Estate and positive the resources, support and team attitude will enable me to deliver the service you deserve from an agent you trust.

More Homes for Sale

Last month in my analysis of market conditions I predicted we would see a modest increase in the median price paid in the Greater Sacramento area, higher sales volume and a modest decline in the inventory of homes available for sale. I was right about price and volume (see this month’s report) but way off with my prediction of a decline in inventory. If I had been looking at Housing Tracker, I might have made a better forecast. Not exactly the same four county area but clearly large percent of the area is included in this weekly report.

According to Housing Tracker, as of March 14 the available homes for sale in the Sacramento area was 7,822 which is up 103 from the end of February. Inventories of homes on the market are slowly increasing all across the country. This is all part of an adjustment period needed by the market to balance for slightly higher rates and a market that has lost some steam. The National Association of Realtors calls this, “normalizing of the market.”

David Lereah, NAR’s chief economist, says, "The cooling from overheated sales conditions in recent months is helping to bring inventory levels up to the point where buyers have more choices than they’ve seen in the last five years. Annual price appreciation is still running at double-digit rates, but the cause of those sharp increases is going away. As the market readjusts, price appreciation should return to more normal rates of growth this year.”

Bright Spot in Sacramento Real Estate Market

Two items today:

1. Check out my new article: Buying a Home: What Happens Next? and see the steps buyers go through after the offer is accepted.
2. I posted my monthly analysis on the Sacramento real estate market: Bright Spot in the Sacramento Real Estate Market.

An Eye Roller but on Second Look….

… I have to admit this housekeeping made easy website has some good ideas. At HousekeepingChannel.com they claim they are a comprehensive resource for "Better, Faster, Healthier" cleaning and housekeeping. Hard to argue with better and faster when it comes to housework!
As a Realtor I was impressed with the number of ideas and tips they have that will help sellers get ready to show their homes. The site contains twelve sections including organizing, kitchen, bathroom, time & motivation and even one for vacuuming. Each section has a number of articles and after reading a few I was impressed with the quality and depth. Since a clean Kitchen is so important when showing a home and I know how busy seller can be I was intrigued by an article titled The 10-Minute ‘New’ Look and for our area, and how to get granite counter tops sparkling, there was Stone Care Made Easy. Even if you aren’t getting ready to sell, take a few minutes to look at their site, they even have a vacuum speed calculator!

Take a look at my site www.jalone.com for Sacramento real estate news, articles and resource links.

Market Dampened by Storms & New Article

The steady days of clouds and rain have clearly impacted the number of buyers out looking at homes. Over the past three weekends we have held open houses and the rain and gloomy weather were big factors in not having many visitors.

Take a look at my most recent article and learn why we Realtors ask for lender letters and learn the difference between pre-qualified and pre-approval letters. The complete article is Buying a Home: Lender Letters.

Housing Market Readjusting to Normal Balance

According to an article published on the National Association of Realtors® web site today, their chief economist, David Lereah said, “The cooling from overheated sales conditions in recent months is helping to bring inventory levels up to the point where buyers have more choices than they’ve seen in the last five years.” A lower level of home sales expected this year will create a more level playing field for buyers and sellers on the heels of a five-year sellers’ market. The complete article is here.

Some Positive News in the Media

Yes it is true, there have been some stories recently indicating our local real estate market may not be a “bubble bursting.” The best of these is in Sacramento Magazine this month which included this comment, “Buyers who haven't been getting much of a break in the past few years may indeed be out looking for bargains this spring. Depending on the price range, they could be in for a disappointment. Homes won't be appreciating at 20 to 25 percent a year as they have for the past three years, but prices aren't likely to plummet, either. In fact, when Mike Lyon, CEO of Lyon Real Estate, looks to the horizon, he sees respectable appreciation levels. "The crazy stuff is done," he says. "That's over. But under $500,000, you'll still get a nice appreciation-better than the stock market." Lyon agrees it's healthy for the market to slow down a bit.”

Someone You Can Trust

The National Association of Realtors ® is currently running is annual Public Awareness Campaign which centers on Realtor members’ adherence to a code of ethics that is one of the oldest in the country and how it protects the public. See the NAR website for “Members Live by Code” or take a look at the actual campaign at Realtor.com -Public Aware.

Selling a Home: Pricing for Results

I published another article this weekend, “Selling a Home: Pricing for Results.” Every home seller wants to get the highest price possible but setting the price too high, even if you are willing to take less, may not be the best strategy. Learn how to avoid setting the price too high to get the highest price.
If you are interested in learning more about the Greater Sacramento residential real estate market, visit my site at www.jalone.com.

Another Author in the family...

... well almost in the family. Kevyn and Dave are getting married on July 8th in beautiful Homer, Alaska. Dave owns his own construction company in Alaska, Northup Construction. Last year he was hired by the Park Service to build a cabin at Silver Salmon where Kevyn is the Park Ranger each summer. He wrote an article on the project and some of the highlights were just published by the Journal of Light Construction. Take a look at Building in the Alaskan Bush, by Dave Northup.

Number of Homes for Sale Grows and another Prediction

As we get closer to one of our busy buying and selling season’s inventory of homes for sale is growing. According to numbers I have been able to find, the number of homes on the market in the four county Sacramento area, (Sacramento, Placer, El Dorado and Yolo) there were 11,215 homes on the market. This is an increase of 633 homes during the month of February and an increase of 1,702 since the beginning of the year.

Again, I am seeing increased activity in showings, and listings so it will be interesting to see if the trend of growing inventory continues through March and April. I am going to predict increases through the first two weeks and then a modest decrease by month end.

Check this out, I have been designated an "Expert Author" at Ezine Articles.