Do Open Houses Work?

Do open houses work? An agent showing a home to prospective buyers.

August 12, 2019

6 Minute Read

This is a common question from both sellers and real estate agents — and the short answer is yes. According to the Zillow Group Consumer Housing Trends Report 2018, 72% of sellers in urban areas, 63% of sellers in suburban areas and 47% of sellers in rural areas hold an open house.

But do open houses sell homes, and are open houses effective for real estate agents? To understand the true value of an open house, it’s important to first evaluate the different ways of marketing a home and decide which strategy will be most beneficial for you and your seller.

Here are three ways to show your home:

  1. Host an open house
  2. Set up private showings.
  3. Host a broker open house (also called a broker's open).

Host an open house

Open houses are used to market the majority of homes for sale — almost two-thirds (63%) of sellers end up hosting one. Bret Calltharp, Zillow's director of industry outreach, says that open houses don’t just attract buyers, they also attract 'locals in that community who are thinking of selling.' An agent should always be thinking about the potential clients who might walk through the door.

What is an open house?

An open house is when home buyers and the general public are invited to tour a home for sale. Generally, open houses occur on weekends, are held in the late morning or afternoon, last a few hours and are hosted by the seller's real estate agent. The agent will typically market the event with open house advertisement methods like signs, flyers and online listings to attract buyers.

Who attends an open house?

You'll mostly see potential buyers at an open house — but you may also find other people, including:

  • Neighbors
  • People passing by
  • Real estate agents
  • Future home buyers who aren't ready to buy yet
  • Sellers who are interested in seeing comparable homes in the area

Are open houses effective?

It's hard to say what percentage of home sales are directly tied to that home's open house, although many agents agree that open houses are effective. In addition to being a strategy to sell that particular home, open houses have become a way for agents to connect with other agents, prospect and collect buyer leads. 

'As a tool to generate buyer leads, an open house is great,' says Bret Calltharp. 'However, it depends on whether you set it up for success. Did you invite people? How and where did you promote it? Is the property ready? Did you invite the neighbors to an exclusive preview an hour before the event?'

Open houses are effective for agents because of the potential leads, and because sellers often see open houses as a sign that the agent is earning their commission — which in turn may lead to referrals from that client.

Open houses are effective for sellers because hosting an open house helps them see how much general interest exists in their local real estate market.

How to talk to sellers about open houses

Remember that you're the expert — 84% of sellers rely on their agent to provide guidance during the selling process. Let your client know that while an open house might not result in an offer, it will drum up interest and attendees might recommend the property to other prospective buyers.

Set up a private showing

Private showings are similar to open houses. They're almost as popular — 68% of sellers say their agent hosts a private tour, and 80% of sellers value an agent who hosts one. Most serious buyers — 89% of them, in fact — end up taking a private tour, where they can take their time and receive personal attention from their real estate agent.

What is a private showing?

A private showing is when a buyer and their agent tour the home together. A seller may be more likely to be present for a private showing because they know the potential buyer is seriously interested.

Are private showings effective?

A high-intent buyer will often prefer a private showing, so they can walk the entire property while receiving personal attention from their agent. Buyer intent is important to sellers — and 51% of them think it's important to get a count of how many people have contacted an agent or broker about their home.

Private showings are effective for agents because they’re easier to market, and the seller’s agent can point out all the great features of the home while making sure it aligns with the buyer's wants and needs.

Private showings are effective for sellers because the seller can get to know the interested buyer and their agent on a more personal level.

How to talk to sellers about private showings

Remind your clients that many serious buyers may prefer private showings because they won't feel pressured by time restrictions or crowds of people. In fact, 79% of buyers rate in-person visits as extremely or very important.

Do open houses work? A chart shows how buyers ranked the importance of different buying activities.

Host a broker open house

A broker open house, also called a broker's open, helps the seller's agent see how the home compares to similar homes in the area. Even if it doesn't result in a direct offer, a broker's open can provide valuable insight from other agents on the property's estimated value and benefits.

What is a broker open house?

A broker’s open is where an agent hosts an open house just for other agents and brokers. This is a great way to keep your property in mind for other agents, who might set up a private showing with their client after attending your broker open house.

Are broker open houses effective?

A broker's open may not provide an offer that day, but it gives buyers' agents valuable information about the house — and those agents may be more likely to take their clients on a private tour.

Broker open houses are effective for agents because they will likely provide the agent with insight and advice from other agents that ultimately helps sell the property.

Broker open houses are effective for sellers because the seller will be able to get an idea of the general demand for their property, and they might get tips on small improvements that could lead to a higher sale price.

How to talk to sellers about a broker's open

Let the seller know that a broker’s open will provide them with valuable information about their home and the local real estate market. Sellers value feedback that helps their home sell for a higher price. In fact, 50% of sellers want to know how their home is performing against similar homes for sale — and get feedback on their home and suggestions for how they can help it sell faster and at a higher price.

Script when talking to sellers
“There are currently listings on the market with similar characteristics to your home. By hosting a broker’s open, we can make sure that your property comes to mind for other agents in the area when they have buyers looking for similar homes.”

There's an added benefit for the listing agent. If you're having a hard time getting the seller to agree to a price reduction, you can survey the agents who came to the broker's open and ask what they think the listing price should be — then present that data to your seller.

You can choose the types of showings that will work for you by considering the wants and needs of your seller, the local real estate market, the effectiveness of your marketing tactics and other factors. Whichever methods you choose, it's important to know the value of each showing type and be able to describe the benefits to your client.

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