Real estate farming has been one of the most prevalent, tried and proven methods of generating real estate leads, listings and deal. But with the advent of the internet and social media, does geographic farming still work for real estate? Have online and digital marketing completely eradicated the usefulness and effectiveness of geographic farming? Or are there strategies you can combine with good old fashioned traditional marketing to bring geographic real estate farming to the digital age?
First let’s have a look at some of the basics of geographic real estate farming.
How many houses to target for real estate farming
Before you even consider getting started with a marketing campaign for your geographic farming strategy, you have to know how many houses to target. You need to target a neighbourhood that has enough homes and turnover (read the next point below) to yield the right amount of opportunities for you to get listings and close deals. Some real estate trainers say to start with 500 homes, while others say 1,000 is a good number to start with. Seasoned and experienced real estate veterans have grown their farm areas to 20,000 or more houses.
When you’re starting out, don’t attempt to target a large area right away because you’ll likely run out of marketing dollars before you see enough sales. You should commit to an area just big enough that gives you a sufficient turnover, and allow you to have enough frequency to perform your marketing activities without depleting your budget. To come up with this number, read about ‘turnover’ and ‘frequency’ before deciding how many homes to target.
What’s the turnover?
Turnover means how many houses sell in a particular area per year. It is expressed as a percentage of the number of houses that sell as a fraction of the total number of houses in the area. There has to be sufficient turnover in a neighbourhood in order for it to be worthwhile targeting for your geographic farming campaigns. If you are real estate farming in a low turnover neighbourhood, there just won’t be enough business opportunities to give you the listings and sales you need to earn a good income. Ideally you should look for areas with at least 6% turnover. For example, if you are targeting a neighbourhood of 500 homes with 6% turnover, 30 homes will sell in any given year. Depending on your competition, you are more likely to get listings when 30 homes are selling in an area than when, say, 10 homes sell. You may get listings in low turnover areas, but the number of transactions may not be enough to sustain your real estate business.
To figure out what the turnover in your desired neighbourhood or area is, you have to pull up real estate sales data and statistics from your local real estate board and cross reference them with postal data or city data showing the number of houses in a particular neighbourhood. Run a report with a year as the timeframe to figure out the total number of sales in the area. Divide it by the postal data or city data showing the number of homes in the neighbourhood. For example, if there were 70 sales in an area with 1000 homes, the turnover is 7%. If you had a turnover of 7% and 70 potential sales to target, do you think you’d be able to capture a good share of that? If you feel your marketing efforts could capture 10 to 15 sales out of the 70 (which would require very consistent and aggressive marketing), it is worth pursuing the neighbourhood as your real estate farm.
Frequency of marketing activities
Real estate trainers use the term “touch” to describe how many times you need to reach out to your farm area in order to get a desired effect, namely recognition of your brand resulting in leads, listings and sales. Each trainer has a different approach, but generally trainers accept that a minimum of 30 touches have to be made between you and those who live in your farm area each year. Some trainers such as Tom Ferry say to start out, you should sent three marketing pieces a month for the first three months, and then make two contacts every month after that. Gary Keller, author of the book Millionaire Real Estate Agent and founder of Keller Williams, uses a 33-touch approach for people whom you haven’t met (which includes your farm area).
No matter which trainer or program you follow, the important takeaway here is that you need to frequently be in touch with your real estate farming area to retain top-of-mind recognition. This increases the chance that you will be called in for a listing appointment when it comes time for those who own houses in your real estate farm area to sell their home. Be consistent with your marketing and don’t give up too early as many real estate agents do. The reason why there are very few predominant players in each neighbourhood is because most real estate salespeople are enthusiastic about starting out, but they never follow through with their plan. If you outlast your competitors, you already have a greater chance of capturing market share and generating a sustainable business from your geographic farming activities.
Direct mail was, and still is, a very important tool when real estate farming. It is inexpensive and effective and getting your message across to those looking to sell. Generally, the response rate for direct mail is low because most people are not really thinking about selling their homes at a particular moment. This is why you have to be consistent with your message so that the recipients of your direct mail marketing piece will remember you and retain the information in their mind. When they keep seeing your mailing pieces, they will begin to recognize you and your brand and you will start to gain top-of-mind positioning when it comes time for them to sell their home.
Door knocking and telephone prospecting
These two methods of ‘cold calling’ remain effective today, but make sure you comply with your local laws and regulations. Some municipalities require you to have a license when you are door knocking. And let’s not forget about the DNCL – do not call list. If you’re interested in using these two methods, make sure you practice and review scripts that are relevant for the scenario when you are approaching potential homeowners. You may be pursuing expired listings in your farm area, engaging in dialogue with for sale by owners, or simply using a just listed or just sold script for everyone else.
Home value landing pages
One of the most recent trends in real estate farming is combining digital marketing with traditional marketing. Home value landing pages have become very popular especially with websites such as Trulia and Zillow making public the sold prices of real estate throughout the US. In Canada, tighter legislation has prevented home prices from being published publicly but this will soon change. Some real estate salespeople incorporate a home value landing page as part of their marketing sequence. Their flyers, business cards, direct mail pieces and even websites and social media profiles have links to home value landing pages. Homeowners enticed by finding out the value of their home go to these landing pages and enter their information to receive a free report. You can learn more about what a real estate landing page is by reading this article.
Neighbourhood focused mini websites
In addition to simple landing pages, some real estate agents are publishing standalone mini websites focused on the neighbourhoods, areas and communities they farm in. These mini websites provide neighbourhood specific information such as home sales, schools in the district, local community events, neighbourhood amenities and even local business profiles. Mini websites are a great way to direct the attention of your farm area from your traditional marketing piece to an online digital marketing property. This allows you to build a relationship with your farm area and establishes you as a local expert.
Leveraging social media
Lastly, let’s not forget about using social media tools such as Facebook, Twitter, Instagram, Snap Chat and other social media tools as part of your geographic farming arsenal. On Facebook, you can supplement traditional offline marketing with digital marketing messages specifically targeted to those who physically live in your farm area. Imagine being able to send out a print postcard, and also have a digital marketing message on Facebook reaching out to the same people living in our real estate geographic farm. This powerful tool allows you to create a presence in the mind of prospective home sellers.
Now that you have an idea of how to take real estate geographic farming to the next level, it’s time to get started. Use the techniques described here and seek some help from your office broker or manager, and look for experienced mentors to help you get started. Real estate farming can be very profitable if you implement the techniques here as part of a holistic marketing program.