March 17, 2019March 17, 2019 Allison

Real Estate Farming, Reap What You Sow!

Miracles, Real Estate Coaching, Real Estate Tips

When I’m coaching Realtors, a question I often get asked is “how effective is farming a neighborhood?” Well, it can be very effective is my answer…but not by doing it the way it’s always been done.

Usually people will start with choosing the right neighborhood, I personally like to start with the one you live in if possible and we are going to talk a lot about how to be effective and gain market share where you live in the majority of this post.

But if “farming” your own neighborhood isn’t an option for some reason, then here are few things to look at when choosing which neighborhood you would like to farm.

Turnover rate: Percentage of homes sold per year vs. the number of homes in the neighborhood. Ideally the percentage would be 6% or greater.

Avg. Sales Price: Ideally I like to choose neighborhoods that are very close to the average sales price for the area/city. Personally, I love selling luxury listings and big acreages but my bread and butter has always been in the sweet spot of average sales price…but I also like getting paid every month.

Competition: I will tell you I am typically an optimist when it comes to this. Agents say to me all the time I can’t get market share in that neighborhood…so and so owns it! Or they will say there are 20 agents that live in that neighborhood…there’s no way I can break in. It is rare that an agent holds as much market share as you think and if a neighborhood that has 20 agents living there…most of them don’t market to it and if they do it’s not consistently.

Your Neighborhood: I’m a huge believer in starting your farming efforts where you live. Quite frankly, because why wouldn’t you? Also, because technology and social media are such a huge part of the real estate landscape, starting in your neighborhood allows you to use more tools to reach people who live in and around your neighborhood. The community where you work, play and live.

Here are the steps I coach my agents to when starting to farm and market to their neighborhoods.

Use your time and marketing dollars effectively: We use 2 types of technology in our brokerage for this. Although our agents have this technology provided to them by us, if your brokerage doesn’t provide it you may be able to reach out to your local title company or other affiliates to see if they have it available.

The first is Corefact, this program not only allows us to pull all the owner names and addresses in the neighborhood, but it allows us to filter it by many factors. I coach my agents to apply the following filters, length of homeownership, equity amount, and owner occupied.

What this allows the agents to do is focus first on people who have lived in their homes an average amount of years (in our area 3 – 7 years is good), how much equity the owner has allows us to see if it is potentially feasible for the owner to sell, and of course owner-occupied allows us to focus on people who own instead of rent.

Disclaimer: we don’t ignore the renters, we just market to them differently.

The second type of technology we use is SmartZip, which is a predictive analytics technology platform. When we add the addresses and/or email addresses of the neighborhood home owners the predictive analytics technology will tell us with amazing accuracy who is most likely to sell within the next 6-12 months!

Can you imagine how much of a game changer this is!!! It’s huge!

Once we are armed with the knowledge of who in your neighborhood is most likely to sell their homes we can put a marketing plan together to not just pepper them with postcards and door hangers but build a relationship with them and become their #1 resource when it comes to real estate.

Most neighborhoods now have HOA based Facebook pages and Neighborhood.com pages. These are great places to interact with all of your neighbors but now that we know who potentially could sell in the near future a focus should be engaging with them on these platforms.

1. A lot of the time these pages are used by your neighbors to ask for referrals of all kinds of home-related service providers. Jump in there and give them the referral. I don’t say “Hey I’m in real estate, call me and I’ll give you the info.” I GIVE them the info! That’s the point of being a resource. Usually, my reply to their post goes something like this. “Hey there! Here’s my painter Joe’s contact information. He’s recently painted a few of my client’s homes prior to putting them on the market and they couldn’t be happier.” See what I did there?
2. Volunteer for and sponsor as many events and neighborhood get-togethers as your budget will allow. If your neighborhood doesn’t have a lot of social events, start one. Think about Halloween parades, progressive dinners, back to school block parties. I’ve even had an agent host a really successful neighborhood “pub crawl”.
3. Send friend requests to your neighbors who showed up on your “might sell” list. Don’t be creepy and stalker like…just a simple friend request. and when they accept it don’t bombard them with real estate stuff. When you like, comment and share posts your friends post not only are you getting to know them better, but social media platforms see your “relationship” with them as important will continue to show your posts in their news feed as well.
4. Back up your social media and neighborhood event efforts with timely and relevant information about the neighborhood in scheduled marketing pieces in the form of postcards, newsletters, etc. Remember you’re only starting with those on your “might sell” list and your dollars will be spent more effectively. You can also sprinkle in some holiday or seasonal pop byes.

So that’s your effective and laser focused marketing plan for farming your neighborhood. Once you’ve started increasing your market share you can start expanding your efforts to more of your neighbors. Don’t forget to run your neighborhood through both of the technology platforms every 6 months at a minimum to see if anyone new pops up to add on your list.

Oh and one more thing…remember we said don’t forget the renters. You can create a marketing plan to reach them as well, except your message with be different.