Geographic farming, or geo farming for short, is a proven real estate marketing method you can use to focus your prospecting efforts on a single neighborhood. When done correctly, farming can help you increase brand awareness, capture leads, gain listings, and earn referrals.
Despite the power of geographic farming in connecting with potential sellers, many agents struggle or have a hard time getting started. From selecting the right neighborhood to building a list and setting up direct mail campaigns, in this blog post, you will learn all about geo farming real estate and how to become the go-to REALTOR for your target area.
Determining the Best Neighborhood for Geo Farming
When you begin geofarming, the first and most important step is determining the best neighborhood to farm. Most of the information needed to find your ideal neighborhood can be gathered on your local or regional MLS database. That said, here are some guidelines on how to go about it and what exactly you should be looking for.
An Area You Know Well is Best
Operating a farm area in or nearby the community you live is wise for a number of reasons. In addition to being an easy commute and allowing you to market the area consistently and affordably on a long-term basis, it will also allow you to market to clients in an area in which you already have traction. People know your face, and you can say, “I sold your neighbor’s home a few doors down.”
Most importantly, you will know the area and understand its selling points. You “get” the community, the people who live there, and the people who want to live there. While turnover rates, agent saturation rates, and other numbers are important, there’s something to say for farming an area you can speak to. If you choose an area you’re less familiar with, learn as much about it as you can.
Sufficient Average Home Price
If you want to sell luxury homes for larger commissions, by all means, feel free. Just know larger, more expensive homes require healthier marketing budgets and tend to stay on the market considerably longer.
That said, you don’t want to be at the other end of the spectrum and find yourself needing to sell a ton of homes and land even more listings each month just to get by. In other words, you need to farm an area with a sufficient average home price.
Since agents make commission, the area you’re farming should have a high enough average home price to make your marketing efforts worthwhile. Although this decision is largely based on experience and expertise, a little basic math will tell you whether or not a specific area or neighborhood is worth pursuing.
Solid Turnover Rate
Another important aspect of identifying a potential farm area is the turnover rate. Turnover rate simply refers to the number of homes sold in the past year. To determine the turnover rate of a specific area or neighborhood, you perform this simple equation:
Turnover rate = (# of homes sold ÷ # of homes in area) x 100
For example, if there are 300 homes in an area and there were 30 home sales, the turnover rate would be 10 percent. You can get this date directly from your local MLS. To have success geo farming real estate, you typically want a turnover rate of at least five percent. Anything less and there simply won’t be enough homes available to sell at any given time to make the area worthwhile.
Agent Saturation Rate
Regardless of your market, there is always going to be competition in real estate. Understanding this and preparing accordingly is crucial when developing your farm area. It’s important to look for areas in which no agents have a defined market share.
Farming an area where 1-2 agents list more than 25 percent of the homes isn’t a good thing. Someone else already has a stronghold on the area. It’s best to look for an area you can do the same.
You can see whether or not an agent already owns an area qualitatively simply by looking through MLS and seeing whether a particular agent keeps popping up as the listing agent in a given subdivision.
For a more formulaic approach, if 50 homes in a given subdivision sold in the last two years combined, and one agent was responsible for 13 or more of those, move on to another geofarm.
Match the Budget to Your Real Estate Farm
The goal for any real estate agent marketing campaign is to get your name in front of more home buyers and sellers than anyone else. However, you also need to sustain your geo farm campaign by employing consistent marketing strategies reflective of your long-term vision. In other words, you need to be in it for the long-haul. This means keeping costs and your resources in mind.
If your chosen real estate farm has more homes than you can afford to market to time and time again over the course of a year, then narrow down the number of homes to what your budget will allow. As you close sales and grow the business, your geo farm can expand as well. Farming can be costly for real estate agent, especially in the beginning while gaining traction and waiting on deals to close. Do your business a favor by doing the math prior to selecting a farm area.
Obtain a Mailing List
If your chosen geo farm checks off everything on the list, the last step is obtaining a mailing list. Every successful realtor consistently mails to a mailing list. With a targeted mailing list, you can send brochures, holiday/birthday cards, and other marketing materials to the right people at the right time.
It’s a proven way to geo farm, grow your brand, and achieve long-term success in the real estate business.
Not to toot our own horn, but our mailing list builder is great as well. In fact, unlike an EDDM direct mail campaign, Wise Pelican mailing list campaigns can be customized and tailored to your specific geographic audience. Plus, we have a ton of new features that come with our Pro subscription.
Best Practices for Marketing a Geo Farm
Now that you have selected your geo farm, the next step is marketing yourself as the expert real estate agent in your area. There are several ways to achieve this status, but the steps below are proven to help you demonstrate your expertise and gain listing presentations.
Sending postcards, brochures, and other marketing materials via direct mail is a popular geo farming strategy that just plain works. Whether you’re an individual realtor or a broker with a team of agents, postcard mailings are a must for marketing to specific neighborhoods quickly, affordably, and in a way that sets you apart.
By sending postcards, you can establish yourself as an expert by giving market updates and helpful tips, or you can simply say, “Happy Holidays.” Either way, your brand will consistently appear before their eyes, so your phone number will be the one they dial when it comes time to sell.
The best postcard mailing services have dozens of design templates to choose from. Some even allow you to easily create custom templates for market update postcards and automated seller valuation postcards letting homeowners know how much their homes are currently worth. When done correctly, a stream of leads will flow in consistently month after month.
To view some outstanding postcard templates, create an account at Wise Pelican today!
Join Local Community Organizations
As a real estate agent looking to farm a specific area, one of the best things you can do is join local community organizations. Why? Well, because buying or selling a home is largely a word-of-mouth business. This means you need to get involved in the community. You need to show your support and network.
From local sports clubs to churches, theater groups, the Moose Lodge, and even your kids’ PTA, you need to interact with others in your community and be seen every day. Being social extends far beyond social media, and it must play an integral role in your business plan.
Host Client Events
Most real estate agents understand the value and importance of hosting an open house. However, if you really want to reach out and gain more listings, consider hosting local client events. First-time home buyers and sellers tend to have a ton of questions. Where should they start? What should they look out for? How do real estate transactions work?
You can help them out by arranging an informal meeting at a local restaurant or happy hour event. Not only can you introduce yourself to potential clients in a casual setting, but you can arrange local experts to join and share their knowledge of the area and the homebuying or selling experience.
After sharing your value proposition and discussing how you’re able to help, give attendees your card and remind them to contact you when they need your services. It’s a fantastic way to paint yourself a friendly neighborhood expert and pick up new clients along the way.
Sponsor Events in the Area
In addition to hosting client events, you should also consider sponsoring other events in your area, such as a charitable bike race, marathon, or perhaps a “Fun Run.” Events like these always need sponsors to help out. If you’re game, you can even participate in the event, allowing you to bond with others and further showcase your community spirit.
While you’re at it, take some snap shots with some of the participants and post them on your blog and social media accounts to share with others. There’s no better way to show community involvement and how much you care about the neighborhood and your neighbors.
Depending on your budget, you can even take it a step further by sponsoring young local athletes or sports teams. This is another great way to gain exposure and show your community support. Family members will remember and be grateful for your support. As a result, they will be more likely to come to you when buying or selling a home.
Keep Homeowners Up-to-Date on Current Market Conditions
Last but not least, when marketing a geo farm, it’s important to keep homeowners up-to-date on current market conditions and what their home is currently worth. This is a proven farming tactic that relates to homeowners on a dollars and cents level.
Just think about it. If a homeowner purchased their house five years ago for $198,000 and now it is worth $278,000, they will immediately think about all of the positive equity they have built up and at least consider the idea of selling. If they do decide to sell, who do you think they will call? You, of course!
That’s geographic farming in a nutshell. There are plenty of things to consider when selecting a neighborhood or area to farm and just as many to farm it successfully. However, each step can be done with a little digging in and a real desire to touch the community in a memorable, lasting way.
When done right, farming can positively transform your real estate business. The key is picking the right area and consistently connecting with the people who live there. They are your prospective clients, and they’re just waiting to hear from you.
Geo farm the right way and check out Wise Pelican today!