AnnaMariaAndriotis

1.We’re hopelessly out of fashion.

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Once a primary tool for real-estate agents looking to sell a home, experts say the traditional open house has lost its influence in the Internet age. Nearly 90% of buyers search online for homes, while only half that number visit open houses, according to a 2011 report from the National Association of Realtors. And open houses are rarely used as a first step to a home search: Thirty-five percent of buyers start their search online while just 4% start at open houses. Online listings are now the most popular source for finding a home, followed by real estate agents, according to the NAR. Open house signs rank third. Open houses are somewhat of a dinosaur, says Jack McCabe, an independent housing analyst in Deerfield Beach, Fla.

Indeed, most buyers today conduct their preliminary research at home — reviewing online photos, virtual tours and a home’s layout — and arranging for private showings of the properties they’re interested in. In addition to listings, other information such as comps (the prices similar homes nearby sold for), property taxes and the school district the house belongs to can also be easily found online. Years ago, buyers had to visit open houses or speak with a real estate agent to get the low down.

2. We can cost you plenty.

To prepare for an open house, some real estate agents encourage homeowners to hire a professional stager who will advise sellers on how to de-clutter, rearrange furniture, move stuff into storage, improve lighting, spruce up landscaping and make other improvements. Granted these changes may well improve curb appeal, but the process can be pricey. Homeowners will shell out $1,800 on average for professional staging, according to StagedHomes.com. In high-priced areas, that number can easily jump to $5,000 and million dollar homeowners will pay significantly more than that. At a time when many homes are selling for less than their asking price — in March, the median listing price in the U.S. was 14% higher than the median price that homes sold for, according to Realtor.com and the NAR — that bill could be steep for homeowners.

Staging has become a lot more common during the housing downturn as real estate agents and sellers try to make homes more appealing to buyers. Roughly 25% of homes for sale are staged, up from less than 5% in 2007, says Barb Schwarz, CEO of StagedHomes.com, which tracks data in the home staging sector. Schwarz says she expects that figure to grow as more real estate agents recommend this service to their clients.

For their part, stagers say that their work helps sell a home faster. Roughly 94% of professionally staged homes sell in an average of 29 days or less, according to StagedHomes.com, compared to 145 to 194 days for homes that aren’t staged. Stagers say that their work can also help increase the eventual selling price. Cleaning and de-cluttering, for instance, can add nearly $2,000 to a home’s sale price, according to 2011 data from HomeGain.com. The National Association of Realtors says home staging is believed to help sell homes faster and may lead to a higher price.

3. . and we probably won’t attract serious buyers.

In the six years that Dallas real estate agent Barbara Deltuva held open houses, not one resulted in a sale. Open houses don’t produce viable buyers, she says. Deltuva’s experience isn’t a fluke. Just 11% of homeowners said they found their purchase from an open house sign (or a yard sign), according to the NAR. Meanwhile, 40% said they found their homes online and 35% said they learned about the home from a real estate agent, according to the NAR. For their part, roughly two thirds of agents say open houses don’t result in sales.

In the rare cases when an open house produces an interested buyer, the likelihood of that person qualifying for a mortgage could be slim. The reason: Open house attendees are rarely screened. Since the housing downturn began, most real estate agents have been urging their clients to find out what kind of mortgage they can get approved for before they start searching for homes. That way, buyers won’t waste time making offers on homes that they ultimately can’t qualify for or afford. But open houses, as the name implies, are open to whoever wants to attend. There’s no way the listing agent can know if every person who walks into the door is qualified to purchase the home, says Keith Gumbinger, vice president at mortgage-data firm HSH Associates.

Some real estate agents say the housing downturn is the culprit as to why open houses can be ineffective. During the housing boom it was more common for buyers to make an offer at an open house because they were worried that another buyer would beat them to it, says David Kent, president of the National Buyer’s Agent Alliance. But with real estate sales slower in most markets, The urgency isn’t there, he says.

4. Attend us at your own peril.

Buyers who plan to visit an open house without their own agent could be setting themselves up for problems. At worst, they could lose the chance to have their own representation, says Doug Miller, executive director of Consumer Advocates in American Real Estate. The reason often boils down to commissions, which is how real estate agents get paid. Listing agents, the ones who run the open houses, represent the seller. They have a fiduciary responsibility to represent the seller’s best interests, which, not surprisingly, are often in conflict with the buyer’s best interests.

Miller recommends buyers work with an exclusive buyer’s agent who makes sure the buyer’s best interests are protected when they go into contract and closing. Typically, the buyer’s and seller’s agents will split the commission. But if a listing agent shows a buyer an open house, that person could claim that he or she has done all the work and refuse to share the commission with another agent. At an open house, just by walking in the door on their own, buyers create the potential for a commission dispute, says Miller.

To avoid complications, buyers should establish a relationship with a buyer’s agent before house hunting begins. Ideally, buyers and their agent will visit open houses together. Barring that, buyers should tell the open house listing agent that they have their own representation, then provide that agent’s name, says Gary Rogers, a seller’s agent in Waltham, Mass. Otherwise, if the seller’s agent refuses to share the commission, buyers could be stuck making a difficult decision: paying for a buyer’s agent out of pocket (since the listing agent would be getting the entire commission) or proceeding with the listing agent who could take on a dual agent role. State laws vary, but most states will allow a listing agent to become a dual agent, says Walter Molony, a spokesman for the NAR. The dual agent would be prohibited from negotiating the purchase price or terms on the buyer’s behalf, says Miller.

5. For agents, We’re free advertising.

If a home doesn’t sell after an open house, the seller’s agent doesn’t necessarily leave empty handed. Bryan Sweeley, a Silicon Valley, Calif.-based seller’s agent with ZipRealty, says his first priority is to sell the home, but he does host open houses with the hope of finding new clients. It is a very low-cost way to personally meet prospective buyers, he says.