Agents Decoded: Expect open houses to boom in popularity 

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It might seem counterintuitive to predict that the decades-old practice of open houses will grow in popularity in this digital age. But agents should expect just that due to a number of factors that transcend technology-driven changes in property marketing. 

The first thing to consider is the undeniable need for consumers to see a home in person before making a buying decision. This is, after all, not like an online purchase. Consumers typically tour a home twice or more before they make a purchase decision.

Housing is not like most things you'll purchase on Amazon or eBay. And while online marketing is the undisputed king of advertising listings, its intention is to sell the prospective buyers on scheduling a showing, not making a purchase. No matter how much our industry changes, seeing a home in person will always be indispensable. 

The value for potential buyers

During the Great Recession, brokerages often de-emphasized and eschewed the practice. Demand was low, open houses were poorly attended, and they seldom resulted in the hosting agent selling the property. We often advised sellers that, with online listings and virtual tours, their home was essentially open 24/7. 

That changed when the market recovered, and an open house was viewed as a more efficient way to accommodate higher demand. It took some pressure off busy buyer agents, and widened the path for buyers. When the market started to heat up in 2020, open houses became the de facto emblem of the new reality. 

Still, most agents seemed to consider an open house to be more of an obligatory optic to satisfy the seller than an essential practice. 

The change I am observing after the Sitzer/Burnett case is that an open house is now the last bastion for a consumer to tour a home without having to sign an agent agreement. Before the settlement, connecting with agents was a hassle to some, but seldom required a commitment. Now, a consumer who doesn't yet have a buyer agent is faced with an all-or-nothing menu.

A casual way to explore options

It is worth mentioning that, while virtually everyone who has plans to move in the next year also plans to engage a Realtor, few members of the public are ready to hire one. Most people don't have the bandwidth to commit to an agent while they are in the early stages of studying the market, window shopping, browsing and matching their plans with market conditions. 

That factored into how we as a body of licensees engaged buyers. For decades, agents worked on contingency. Buyer agency changed that in some respects, but in many markets, few buyer agents asked for exclusive representation agreements. Working with a buyer agent was pervasive; hiring an exclusive buyer agent was relatively rare. 

In training agents to get hired as exclusive representatives, the most common objection I heard was that it was a challenge to get buyers to commit when a company down the street didn't ask for representation agreements. That has changed. In my own state of New York, even the most casual tire kicker cannot see a home with an agent without signing an agency disclosure, a fair housing disclosure and a written agreement with some clear terms of what their financial obligation is in the event that they choose to buy a property the agent shows them. 

The consumer no longer has an option if they want to remain uncommitted, unless they become comfortable with signing multiple short-term property-specific buyer agent contracts. I can say with a high level of certainty that signing more of these will not make most regular folks feel more comfortable. 

Meeting a new need

And that brings us back to open houses. Until potential buyers are ready to commit, open houses are now the only way they can see a property without having to sit with an agent they just met and sign their name multiple times. My bold prediction is, even when the market does eventually cool off, open houses will still grow in popularity because they fill a need that didn't exist before the NAR settlement.

The wise agent should do all they can to become open house specialists. A well-executed open house involves far more than a sole agent with a clipboard and a sign-in sheet. I have seen events where multiple agents host and help manage foot traffic as an onsite mortgage loan officer offers free pre-qualifications.

Consumers are already learning to expect that, while they don't have to hire an agent to see a property, they still have to provide some personal information onsite. For many, that is a small price to pay to tour a home without committing to an agent.

J. Philip Faranda is a manager and associate broker at Howard Hanna | Rand Realty serving Westchester and Putnam Counties, just north of New York City. He was previously a broker-owner at J. Philip Real Estate, the top independent brokerage in the two counties by transaction sides, which he founded in 2005. He also writes a real estate blog which has been cited by major media outlets. The views expressed in this column are solely those of the author.