I was recently speaking with a competitor of mine, after small chitchat he asked me what I was working on at the moment. After explaining to him that I was preparing my team for our upcoming "open house" he laughed at me. His comments were as follows "Scott, you know nobody comes to those things anymore!", "Why are you wasting your time on that old technique?", and to finish it off "I haven't sold a home using an open house in years!" I wasn't completely shocked by his comments but I was a bit surprised at his anti open house stance. After replaying his comments over in my head for the next several days I did some investigating and found most of my investor friends do not hold open houses either. I began asking myself "why is that" and "do they honestly believe they can't sell at an open house?" Well, you can probably tell from the title of this article my stance is quite different. I believe if handled the proper way an open house can be a great asset to you and your business. I want to give you some tips and strategies for holding an open house the right way, more than that I am going to share with you what I call the "launch method" for an open house. The first point I would like to make involves timing. Timing is first because it is the most crucial point. Too many investors finish a rehab project and then stick it on the MLS(multiple list service) and expect a realtor to bring them a buyer. Well that certaintly is the hands off way to sell a home, but lets face it, in 2010 that is simply unacceptable if you are trying to move homes quickly. I believe in launching the property. Launching is simply the term we use because we are in a sense creating a buzz and building momentum for people to see our property. In reference to timing, I recommend not scheduling an open house around any kind of holidays. To further my point, also check and see if there are any events or special community functions taking place the weekend of your open house. You do not want to compete with entertainment, but you want your prospective customers to see value in coming to your open house. Once you pick the appropriate date, it is now time to begin your property launch. A simple sign in the yard will not do. Here are a couple tips you can use to get people through the door. About 2 weeks before your open house send the neighbors a letter, I would start around 100-150 of the closest ones. The letter should be short but should state something like this, "We are proud to announce the dates for our upcoming open house, we apologize for the dust and noise the last couple of weeks, but here is some of the features you can expect to see in you attend our open house." Neighbors are nosey, and you want to take advantage of this. This makes the surrounding neighbors not close to your home aware of what has been taking place and more importantly what they can expect in the future. The next letter or flyer you will send out will be approximately 2-3 days before the open house. This letter will be your call to action letter. You have already introduced your company and what you are doing, now it is time to involve them. The letter should reinforce the dates of the open house, plus give them the features and benefits of the home again, but more importantly you are going to give them a "bring me a buyer bargain." In my letters I state I will personally hand them $500-$1,000 cash if they bring me a buyer and I close with that person. This really gets there attention because now you have generated a buzz surrounding your home. What I have found is neighbors begin getting creative, they start thinking about the grandkids moving closer or the parents that may be up north and have talked about moving or possibly friends that want to live closer to each other. There are so many scenarios and I have heard them all, the most important point is these people have now become your sales people. Secondy, now you can involve the professionals, the realtors and mortgage brokers. I give them extra incentive too when they bring me a buyer. I use email for this. It is wise to call some the local real estate offices and ask for the top sales and listing professionals in that office, once you speak to them get there email and tell them what you are all about. Send the email on the wednesday or thursday before the open house. After talking to there clients they might put your home on the list to see that upcoming weekend. Once again timing is everything. Here is a few things that you should have at your open house: table with chairs, light refreshments (water, cookies, veggie tray), flyers of the home with an incentive some where on the flyer, a recent real estate article (make sure it is relevant, for example a one page article on interest rates and how they are the lowest in history), sign it sheet, mints or candy, and last but most important a contract. My last point that I want to cover involves sales. It is crucial that you spend some time with your team and update them on the procedures for the open house. My recommendations are this: update them on the school system, the recent home sales in the area, nearby shops and restuarants, history on the home, rebates, incentives, and warranties of the products in the home. These are all questions you and your staff will be asked at the open house, if you want to be ahead of the curve know all this information, this will give your buyers confidence in there soon to be purchase. Also teach your staff about the sales process, require them to read material on the subject and educate them throughout there time with you. This will make you an expert in your area and more importantly help you move more inventory.
About the Author
Scott MacDonald is President and CEO of Premier Choice Investments, LLC located in Jacksonville, FL. Premier Choice Investments purchases 5-10 homes per month in Northeast Florida and surrounding areas. Since starting the company in 2008 Scott has been investing in Real Estate full time and has experienced tremendous growth. Scott has quickly become an expert and guide for other real estate investors all over the Sunshine State.
