In this week’s WBNL 52 coaching tip, we revisit a traditional and basic prospecting strategy … real estate farming.
Like all types of prospecting, farming takes perseverance, consistency and adequate contacts to succeed. If you farm effectively and leverage your success with other prospecting activities you can increase your listing inventory and generate more buyer leads.
Real Estate Farming is analogous to agricultural farming. The “farmer” must analyze the land; prepare and fertilize it; sow the seeds, water, weed and nurture the garden; then harvest the crop when it is ready. In our experience, farming only works if you are committed to it long term. Many agents decide to farm without properly analyzing and preparing for it. They mail something out to a neighborhood only to quit 3 to 4 months later because it didn’t produce results quick enough.
In the real estate business, there are several types of “farms.” The geographic farm (prospecting specific neighborhoods or subdivisions) is the most common. Other farms might include:
- Professional (teachers, attorneys, nurses, doctors – maybe from a related previous career)
- Tenant occupied residential properties
- Out-of-state owners
- Your last name (I could farm all property owners with the last name O’Brien, O’Brian, O’Bryan for example.)
- Cultural group
Deciding Where to Farm
- Your farm should be located in the same Zip Code (Min 150 pieces per zip code) to take advantage of the best bulk mail rates.
- 500-750 homes is optimal to start. Your budget will determine the total number of homes you mail to monthly) .
- Turnover ratio should be a minimum of 12 to 15% (total # of homes in the subdivision divided by the # of closings in one year = turnover %).
- Research the MLS to ensure another agent doesn’t have more than 20% market share. Generally speaking there are no protected farm areas, it’s just smart to know who, if anyone, is your competition.
- Gather the following statistics for your designated geographic farm:
- Subdivision Name(s)/Number(s)
- Total Number of Homes
- Total Sales in Previous Year
- Turnover Ratio
- Total Sales YTD
- Models and sqft range
- Benefits, amenities and features of the neighborhood
- Contact your local Title Company for assistance with a farm packet. You should be able to get detailed reports and your farm in an electronic format. This will allow you to import the data into your contact management system for mail merging letters, mailing labels or addressing envelopes.
- Use Salestraq Archive feature to get floor plans of all models if available.
- Preview available inventory in the farm. Get to know the features and benefits of all the models.
What to mail or email:
- Every other month prepare a neighborhood market update – this is the information the homeowner wants to know – the current value of the homes. Include availables, pending and contingent and recent solds. You could also include other stats like average days on market, average price per sq ft.
- On the other months – mail information about your marketing plan. Why should the homeowner choose you when it’s time to sell their home? You could highlight one or two key reasons that set you apart from the competition every other month. What is your Unique Value or Selling Proposition?
- Keep it simple and easy to read. Use a template for the market update and make sure to brand it with your photo and other information.
Leveraging for Success. The following activities will assist you in leveraging your farming success. The goal is to become the trusted neighborhood expert.
- Use personalized Yard Signs.
- Hold Open Houses in your farm. Use personalized open house signs.
- Mail Just Listed/Solds every time you take anew listing and sell one in your farm.
- Call Your Farm or Knock 30-50 doors when you list and again when you sell a property.
- Visit the neighborhood, knock doors or door drop your market update.
- Consider Community Activities
- Sponsor garage sales
- Help Establish a neighborhood watch
- Create a neighborhood Facebook Page and promote it
- Seasonal/Holiday activities or items (flags on 4th of July; pumpkins at Halloween are classics)
The final step to creating a successful Farming System is to actually schedule the day or week of the month that you are committed to getting the mailers out. The other key step is to have your template or newsletter set up in advance. Take the time to design and finalize your mailers for the entire year, then just schedule them on a monthly basis. If you follow this advice, the only additional task every other month is to put together the current market stats.