Apr 3, 2023
It’s April, and that means homeowners across the country are throwing open their doors for strangers to enter their homes, test the water pressure of their showers, and judge the quality of the magazines displayed artfully on their coffee tables. Yes, it’s open house season.
Why April? Well, as the spring and summer home-buying season begins, our society enters into this weekend ritual in which we scour the latest home listings and set aside our Saturdays and Sundays for open houses—all in the hope of finding that dream home we can close on and move into before summer’s end.
It would seem strange, were it not part of what feels like an age-old tradition.
That got us thinking—how did weekend open houses become a standard in American real estate? Was there ever a time when they didn’t exist? Whose idea was it anyway?
A ‘Wild West era’ for real estate
It turns out, the open house is a tradition that started over a century ago.
Until late 1919, there were no license laws anywhere in the country, so basically anyone could declare himself a real estate broker. That meant when a home was for sale, anybody could pop a sign on a property to advertise the home.
Potential buyers had their pick of whom to contact about the house. People who were really trying to make an honest living out of real estate had a hard time distinguishing themselves from “curbstoners”—dishonest brokers who were out to make a quick buck, said Frederik Heller, manager of the library and archives at the National Association of REALTORS®. (The NAR was founded in 1908 to raise the professional and ethical standards of the real estate industry.)
“The early 1900s were a sort of Wild West era for real estate brokerage,” Heller said. “Sometimes there were dozens of yard signs of brokers trying to sell the same listing. You (the buyer) would just pick the agents you knew—or throw a dart at the signs.”
Real estate professionals, of course, were encouraged by their local associations to ask permission to place a “for sale” placard on a property—they’d get to know the owner that way and earn their trust.
So how did we get from a property littered with signs to the modern-day open house?
It all came down to the institution of “exclusive contracts,” under which a single broker would be assigned to sell a property. It’s not clear exactly where the concept of exclusive listing contracts originated, but they first took hold in major cities where local real estate associations were established. The cities included Chicago, Baltimore, San Jose, St. Louis, and even Toledo, OH (which developed a model for exclusive contracts that soon was copied in other cities.)
So instead of homes being sold by anyone who happened to find the right buyer with the right offer, real estate brokers now had access to the property and its owners––and could invite the public in to tour the home.
Enter the open house.
- The 1910s: The first recorded open house was held. Then called “open for inspection,” these events often spanned days and sometimes even weeks. Primarily used to show new homes at first, these home “inspections” gave the public an opportunity to see some of the new architectural concepts (such as kitchen layouts) and convenient technologies (such as electric lighting) that builders were incorporating into homes after World War I. Homes would often be open daily, from 9 a.m. to 9 p.m., until a buyer was found. Brokers spent all day at the home, so they could represent only one listing at a time, not multiple listings like they do today.
- 1925: The NAR’s National Real Estate Journal profiled a broker in Fort Wayne, IN, who had a “brand new sales idea” to show homes that were completely furnished (aka staged).
- 1930s: Real estate companies began to employ multiple agents, allowing them to take on multiple listings.
- 1930s and 1940s: Real estate agents began seeing open houses as a “personal marketing tool,” Heller said, using contacts they made at an open house to market other listings that might be right for the buyer.
- 1940s and 1950s: In the wake of World War II, as men came home from armed service and rejoined or started families, the real estate market took off. With radio and newspaper ads, properties weren’t on the market long, so agents could reduce the amount of time they opened homes to the public.
- 1950s: Terminology changed from “open to inspection” to “open house,” and Sunday became the standard open-house day. It’s difficult to pinpoint why, but Heller thinks it might have had to do with “blue laws” that made it illegal to complete a business transaction on Sundays. Therefore, Sunday became the ideal day to show a home and line up a potential buyer but then complete the sale during the rest of the week.
- 1952: This is the first record of incentives being used to attract buyers to homes. A Dallas Realtor® selling a model home in a new subdivision offered free soft drinks to visitors and a Cadillac to the lucky buyer. A whopping 30,000 people visited the open house.
- The past 60 years or so: Oddly, not much has changed. That’s because “the method works,” Heller said. Despite the advent of the Internet, virtual tours, and other technological advances, the use of open houses has remained fairly steady over the past 20 years. According to NAR’s 2014 Profile of Home Buyer & Sellers, only 9% of buyers purchased a home that they first saw at an open house, while 5% met their agent at an open house. At the same time, though, 44% of buyers used open houses as a source of information during the home search process. Little has changed from 20 years ago: In 1995, 41% of buyers used open houses in their search process; 5% bought a home they first saw at an open house; and 8% first met their agent at an open house.
Even as we’ve evolved and moved online, the format of the open house has remained much the same. Sure, we’ve tweaked it some over the decades. Some open houses have increasingly become a marketing platform, going over the top with lavish cocktail parties, live bands, free massages, and glow-in-the-dark raves. Others have begun capitalizing on our ever-evolving busy schedules and buck the trend of being held on Sundays. But at the core of it, the modern open house concept hasn’t strayed too far from where it all began over a century ago.
Source- https://www.realtor.com/advice/buy/brief-history-of-the-open-house/
