If you are a newbie in real estate and are seeking methods to start your career starting with your specific locality, “farm real estate” is one of the most recommended strategies for you. It is literally a selecting and marketing process within a particular geographical area and is used by plenty of successful real estate agents.
Yet how to master this method remains ambiguous for many agents. If you are in the same situation, this blog is definitely written for you. Not only analysing what it is and how it works, we also guide you through plenty of tactics for an effective farming plan. Let’s check it out!
How Does Real Estate Farming Work?
Agents implement farming by focusing their efforts on a specific neighborhood. In particular, they research the community and confirm that area sales are at a high enough level to sustain ongoing revenue. Once an agent selects their farm area, they should build their reputation as a local expert on real estate and the community as a whole.
First, choose your farm area by considering different areas that appeal to you. Research these areas carefully to find out more about your potential clients, sales volume, and competition from other agents. Once you determine the area with significant revenue potential, set area boundaries and focus on your marketing and sales efforts there.
The next step is to build your brand and reputation in your real estate farm area. Set up a Facebook advertising campaign aimed at your target area. Participate in local groups, blog about the neighborhood, and sponsor a local event. Also, be sure your website is up and running to collect every potential lead from your marketing efforts.
You can find lots of Facebook ad templates ready to use here in EOwn library: EOwn – Facebook ad templates
Finally, with your farm area selected ang real estate lead generation strategy in place, focus on becoming an authority in the community. You want people to consider you an area expert and remember your brand when it’s time to buy or sell real estate. Agents find that, over time, efforts toward farming in a specific area builds upon itself by increasing referrals and overall sales.
Why Is Real Estate Farming So Effective?
Geographic farming is a powerful approach to lead prospecting because it zeros in on your audience and forces you to laser focus your marketing message. Rather than trying to be all things to all buyers and sellers, a real estate agent who farms knows more about who they’re targeting messages for.
This allows those messages to be more tailored to the needs and desires of your audience, and therefore more effective.
When you hear the word “farming,” most of us think of agriculture, of growing things. You can think of your real estate farm much in the same way:
First, you plant the seeds of transactions by identifying homes in a particular area that would be excellent candidates for sale one day. Then, you nurture those seeds by establishing a relationship in the neighborhood with the owners of those homes through regular communication and community involvement.
Finally, when it comes time for those owners to sell their home, you’re there to harvest the sales.
This long term approach to consistent customized messaging puts you top of mind or at least in the running for just about every seller in that neighborhood, as well as makes you an easy referral in the event that anybody connected to those homeowners is looking to buy or sell.
Read more: How to make new real estate friends in 60s: 4 simple steps to expand your real estate network
How Much Does Real Estate Farming Cost?
There’s definitely an upfront cost to effective real estate farming, but the returns on your farm will pay for the investment many times over if you can stick with it.
According to The Close, here’s the typical annual cost for a real estate farming operation with 250 homes in it.
Let’s say that for your farm of 250 homes, the turnover rate was right around 5%. This would mean you could expect about 12 or 13 homes to be sold from that neighborhood every year.
Let’s figure that the absorption rate is about three months, meaning that it is a seller’s market and the demand for property in your neighborhood is outstripping the supply.
Finally, let’s assume that the median sale price of homes in your neighborhood is $250,000. If your farm is functioning moderately and you’re capturing just 25% of the sales in the neighborhood, you’re closing four properties a year, or $30,000 in GCI (assuming a 3% commission rate).
Also remember that your success will have a snowball effect. Every closed deal will mean another evangelist singing your praises and connecting you with referral clients. If you do this right, you may end up getting most or even all of your business from referrals in a few years.
Invest $8,282 to make $30,000? Yes please.
You can find graphic templates and email templates for your real estate farming campaign here:
EOwn – Graphic Content Templates
Being a real estate agent can earn you a huge amount of income
However, the starting process can be difficult sometimes.