Farming - to a particular neighborhood or within a certain community - is a tried and true way for agents to establish validity and maintain top of mind awareness. Some have great success, but others have a hard time with it. Why? There are two primary reasons. First, because agents fail to establish consistency around their activities, which must be done at least once a month and be ongoing, and second, because they choose the wrong farm!
The farm you choose must be selected for reasons that go beyond appearance, location, or price point. You’ll be investing significant resources - time, money, and effort - so it’s imperative that you make a good business decision. Once you do so, you must commit to being the absolute expert and knowing more than anyone else.
Before you start farming you need to know your farm. Your research should include learning the following:
- Total number of homes in the farm and the total number sold in last 12 months - if turnover is low there is likely little chance that you’ll see a worthwhile return on your investment.
- Average days on market and average sale price to original list price ratio - if you’re the agent who sells homes faster and for more money than the average agent in your market, you want to choose a farm that will keep you in your winning zone!
- Average seller concession and expected financing type - this will allow you to establish expectations for the sellers you will eventually represent and better prepare you for the targeted message you’ll need to provide.
- Expected improvements - have the homes in your prospective farm been updated? New kitchens, roofs, and systems? Knowing what’s being offered to buyers allows you to better advise potential sellers regarding marketability and pricing.
- Number non-owner occupied - do you wish to farm to an area with a large number of renters? Is the desirability of the neighborhood affected in terms of price and days on market? The choice is yours; just target your message specifically.
- Number identified as distressed and foreclosures - are you interested in this specialization? Will the potential buyer pool be smaller? Will focusing here affect your performance around days on market and sales price?
- Other agent presence – who has sold there in the last 12 months? If your research reveals no clear dominator, you have a better chance to capture more business.
- Average length of stay/ownership - this information can help you to predict movement in the community and respond accordingly.
- HOA? A community with an HOA or condo association may be excited to have an agent partner who is willing to share market data, contribute to a newsletter or community Facebook page, or sponsor events. Reach out to those in charge!
- Restrictions? FHA approved? - Both can affect the marketability of a community, so do your homework and learn what might apply.
- Original builder, floor plans, history - all allow for you to demonstrate your local market expertise and competence, creating greater validity and trust among homeowners. TIP: Relola is a great way for you to share your local inventory knowledge, particularly in a farm you wish to dominate. Commit to previewing every home, publish those insights and boost to your target audience!
When you think about it, doesn’t it make sense to know this information about any home you may list, or any home you may help a buyer purchase? Evaluate the viability of your activities by looking at the data above, calculating the monthly and annual expenses, and estimating the ROI – return on investment.
Is this farm area truly worth your time, money, and effort? Remember – you need to consistently farm EACH MONTH for several months before you start to see real results, so commit for the long term!
Beth Incorvati is our Chief Blogger and Podcast Host at Radio Relola. She has been training, motivating, and inspiring real estate professionals for over fifteen years.