Real estate farming is a steadfast marketing technique used by real estate agents to cultivate business in specific geographic areas. As the name implies, agents farm a particular location with the goal of obtaining listings. The techniques for effective real estate farming can vary, but typically includes door knocking, postcards, mailers, and cold calling.
In this article, we will explore real estate farming and take a look at why they are so effective and continue to work, even in a digital age. Also, we’ll look at the foundation of a successful farming technique – postcards. What is it about real estate farming postcards that keep them working, even with the introduction of digital marketing options and social media?
What is Real Estate Farming?
Real estate farming remains a successful strategy implemented by real estate agents who want to position themselves as a valued local resource for specific subdivisions and neighborhoods. Any REALTOR who wants to farm a demographic area should learn about everything they can about the area, the people living in the neighborhoods, and the various properties. Once they grasp the basic statistics, they can tailor a message to truly reach homeowners in the area.
With real estate farming, the agent will want to reach out regularly with essential market updates and regional updates to pique the interest of the homeowners. By offering relevant and valued information to homeowners, the real estate agent becomes the go-to agent for the neighborhood.
Whenever someone wants to buy or sell, they will reach out to the agent because they are familiar with them from the successful growth of the farming marketing strategy.
Why Real Estate Farm?
The number one reason for real estate farming is to bring in clients and make money. When used properly, real estate farming earns you listings. Even mailing flyers to renters is beneficial because when it comes time for them to buy their home, they will contact you thanks to your successful farming practices.
Interestingly, most renters will purchase a home in the same area they are renting because they become familiar with the location, their kids go to the local schools, and the renters live close by. With strong neighborhood ties, most people want to stay in the same location when it’s time to buy their home. It becomes a win/win situation for everyone involved.
Why Are Homeowners Responsive to Real Estate Farming?
Most homeowners stay up to date on what their home is worth in the current market, whether they plan on selling or not. When farming such an area, the homeowners usually pay attention to the information provided on the market climate.
If your name, headshot and branding keep showing up, they will associate you with being the expert real estate agent and will choose you when it comes time to sell.
Real Estate Farming Isn’t New
Well before the age of digital marketing, real estate farming has been an effective method for obtaining listings. Whether you read The Millionaire Real Estate Agent by Gary Keller, How to Master the Art of Listing and Selling Real Estate by Tom Hopkins, or How to Develop a Six-Figure Income in Real Estate by Mike Ferry, the idea around real estate farming via direct mail has been around for decades.
Proof of Production Real Estate Postcards are Ideal for Farming
Many people wonder what is so special about real estate postcards for farming. Honestly, they work and have stood the test of time even when put up against the new and innovative digital world.
Just Listed Postcards
Homeowners like to stay up to date on what is happening in their neighborhood. Sending out just listed postcards when you obtain a listing will pique their interest immediately.
Why would you send a postcard to the homeowners in the neighborhood? In addition to the word-of-mouth potential for owners in the area to share your listing with their friends and family, they will also be informed on the listing price of the home. If they have lived in the area for many years, they may be surprised at the comparative value of homes in the area.
Plus, it demonstrates that you are the expert real estate agent in the area, which is the cornerstone to success with real estate farming.
Open House Postcards
If you decide to host an Open House for your listing, sending an Open House postcard adds an extra touch point, which will further establish your expertise in the neighborhood. As an added bonus, homeowners in the area may just stop by during your Open House.
This is a great opportunity to make contact and impress a prospective seller. If all goes well, one listing turns into two listings, and a new set of opportunities to market yourself as the expert.
Under Contract Postcards
Once your listing goes Under Contract (also known as Pending), an Under Contract postcard should be sent. Although you never want to disclose what the offer price is, you can still keep the listing price on the postcard and add yet another touch point.
Just Sold Postcards
The moment your listing has Sold, a Just Sold postcard is ideal for wrapping up your touch points for that listing. In fact, you can send a Just Sold postcard twice to the same neighborhood, and with one listing, it will look like you sold two homes!
Does this mean you should only send postcards when you have a listing? Of course not. There are other ways to establish expertise within a real estate farm.
Other Real Estate Postcards to Send
Market Update Postcards
A market update postcard does take work because you must enter the required localized stats to build the farming postcard. You’ll want to include hyper-relevant information, which can include number of homes sold in a year span, average sold price, and average days on market.
Utilize the MLS to gather the data you need for a specific subdivision or neighborhood. This is a great postcard to send when you don’t have a listing in the near future, but want to stay consistent with your monthly mailing schedule.
Seller Valuation Postcards
Seller valuation postcards are often called CMA postcards, comprehensive market analysis postcards, and seller valuation. They outline what the postcard receiver’s home is worth.
They let the recipient learn what their home is worth by encouraging them to visit a particular website or scan a QR code. When designing a seller valuation postcard, Wise Pelican uses computer algorithms to determine the home’s valuation. They are not 100 percent accurate but open the door to further discussions if a homeowner is interested in selling.
As a conversation starter, seller valuation postcards help you get your foot in the door. You are building your brand recognition, successfully farming, and creating the possibility of inspiring discourse with the postcard’s recipient.
With seller valuation postcards, you cannot focus on 100 percent accuracy, or you will lose track of the benefits. You want to inspire brand recognition and generate leads. After you reach out to the postcard’s recipient, you can then offer to provide them with an in-depth CMA (comprehensive market analysis), which will give them a good idea of their home’s true worth.
Fun or Filler Postcards
Filler postcards are a great way to stay current and create a fun, personality swing on your branding efforts. They serve to keep you at the forefront of people’s minds and make you memorable.
You can send fun recipe postcards, coloring contest postcards, or simple agent introduction postcards that help let people know who you are. You want to always outline why you are the obvious real estate choice for all their needs. Try adorning the card with a photo yourself.
Combining the above ideas with tried-and-true methods such as real estate farming postcards, social media, Google ads and more are great way to succeed as an agent within your town or neighborhood.
Why is Real Estate Farming Successful? Because it Works
There is a very simple yet compelling reason why real estate farming postcards are recommended by the biggest real estate teams in the country: it’s effective. Additionally, when compared to some of the other farming methods (cold-calling, door-knocking, door-hangers), postcard marketing offers the best ROI.
We have provided ROI examples for real estate postcards in other blog posts, but here is an example of ROI in terms of per-hour output.
A Per-Hour Real Estate Farming Comparison
Let’s assume that you earn an average of $100 per hour as a real estate agent. Regardless if it’s a listing or buyer transaction, when all of the dust settles, you earn $100 per hour.
Now, let’s take a look at door knocking as an example farming method. Your real estate farm consists of a 200-home subdivision with an 8-percent turnover rate (which is amazing) and only 3 agents have closed multiple listings over the last two years. This is a prime area to farm, and you get started by obtaining a list from your title company to determine the homes that are owned by their residents.
Let’s also say that 10 percent of the homes are renters, so there are 180 homes total to farm. As an average, let’s say it takes 5 minutes per home to door knock. Most don’t answer, a few answer and say no, thanks, and a few actually answer and have a 10-15 minute conversation with you, plus walking in-between doors.
Five minutes per home at 180 homes = 900 minutes, or 15 hours. And out of that 15 hours, you obtain one listing, a home that sells for $300,000, and nets you a $9,000 commission check. Common wisdom would say you just made $9,000 without spending money. However, opportunity cost has to be factored in.
In reality, those 15 hours you spent equals $1500 in time spent, which results in a net profit of $7700.
In comparison, what if you took at $1500 and used it for sending real estate postcards?
The 180-homes at .79 cents per postcard would cost you $126 per month, plus $50 in opportunity cost for the approximately 30 minutes it takes to set up and send your postcards.
Using the $1500 opportunity cost, you could send postcards for 8 and ½ months, and if you obtain one listing, you’ve earned $7,500; two listings at the same price, and you’ve added an additional $9,000 in commission!
Plus, instead of spending 15 hours in one month door-knocking, you are spending 4 hours total over the course of 8 months sending postcards! That’s an ROI any real estate agent would be happy to get behind.
Advantages of Sending Postcards for Real Estate Farming
As you can see from above, there are both economical and monetary advantages to sending real estate farming postcards compared to other farming methods. However, if we look further, there are other advantages.
Marketing Postcards can be Automated
Unless you can program a robot to knock on doors or cold call be personable, and elucidate your real estate value proposition, there is no way to automate traditional farming.
The story is different with postcards. For example, Wise Pelican’s 12-Month Campaign will save you additional time by sending out monthly postcards for you! This extra time saved can be utilized in other ways, including staying in contact with your Sphere of Influence (SOI), showing homes, and recruiting real estate agents.
Real Estate Postcards can be Integrated with Digital Marketing
Depending on your postcard’s CTA (Call-to-Action), your real estate mailings can be integrated with any digital marketing avenues you use. For example, visits to your website can be leveraged through retargeting. Or, if you use automated seller valuation postcards, those leads can be added to your CRM and added to a drip campaign.
A Targeted Mailing List is More Effective than EDDM
Every Door Direct Mail is a USPS service that many businesses utilize. However, for real estate farming, EDDM isn’t as effective. Since EDDM casts the widest possible net for a particular area, you miss out on absentee homeowners.
When compared to our mailing lists, where you can send postcards to the homeowners, Wise Pelican postcards have a clear advantage.
Maximizing Your Success with Real Estate Farming
Having a plan is crucial to achieving maximum success with direct mail for real estate. Here are some of our top tips for making sure every dollar spend on real estate farming is utilized optimally.
Mailings Need to Be Consistent
Fight the temptation to send a large batch of postcards once or twice and expect to see a return. Focus on the smallest possible audience that allows you to send monthly postcards for a minimum of one year.
If your budget is $140 per month, send postcards to the same 200 homes on a monthly basis. Slow and steady is the key to brand recognition and establishing yourself as the expert in their area.
Send 6×9 Real Estate Farming Postcards
Some direct mail companies will offer the option to send the standard 4×6 postcard. Although you may save a few dollars a month, the chances of your postcard getting lost in the shuffle is increases dramatically by decreasing the size.
Our jumbo 6×9 postcards are larger than the average letter and helps them stand out when your prospects check their mailboxes.
Professional Postcard Design is a Must
Postcards with bland designs, grainy images, or poor format are even worse than sending 0 postcards, since it demonstrates a lack of professionalism.
Utilizing a professional postcard design lets your farming prospects know that you are serious about your business. Additionally, it also creates a sense of status that you have the resources to afford high-quality marketing materials, and when you send them something like a real estate brochure, they will know you mean business.
A Clear Call to Action (CTA)
There are a variety of options for requesting a direct response from prospects. The key is to keep it simple. Examples include:
- A QR code that leads them to your website
- “Sell for X Price Postcard” where you ask prospects to text you their desired sale price.
- “Email me today at email@example.com for a Free Home Valuation”
Offer a straightforward solution for all of them, and make it easy.
An In-Depth Look at Geographic Real Estate Farming
The most common form of real estate farming is referred to as ‘geographic farming’. It is the practice of focusing all your energy and efforts on one geographic location. It is probably the quickest method to gain accurate results and gather consistent leads.
Many agents like to stay close to home when geographic real estate farming because they know the area well and understand the neighborhood. Without a doubt, farming your neighborhood has its perks. You’ll always be available for a quick, last-minute listing presentation without having to drive an excessive distance.
Whatever geographic area you choose to focus on, you’ll need to learn the following:
- Turnover rate (number of homes sold/number of homes in the area)
- Local amenities
- Size of the area (number of homes)
- Average home sale prices
- Agent saturation (do any agents account for more than 25 percent of the listings sold in the geographic area?)
Now you can use the demographic information further to focus your farming practices for very targeted marketing.
Picking an Area to Real Estate Farm
Your farming area will depend on a variety of factors such as size, competition, demographics, location, and turnover. Let’s examine the main steps needed to pick the perfect farming region to gain the greatest return on investment (ROI).
1. Stay Within Your Personal Geographic Area
Why not farm your neighborhood? You are probably already a local expert, so why not make use of it. In fact, according to a study carried out by Zillow Group Consumer Housing Trends Report 2019, 74 percent of sellers preferred to work with an agent with neighborhood and local knowledge, and having an agent who actually lives in the neighborhood is just icing on the cake.
- As a local expert, you’ll appear more at ease when engaging with clients. You can readily answer questions about amenities like parks, schools, healthcare, and restaurants.
- Living in the community, you have probably already made connections and established trust with many of the residents. Be sure you interact with them in a localized setting such as at the grocery store, medical clinic, mall, or movie theater.
- Cultivating local prospects is a breeze because you’ll run into potential clients when hanging out with friends, taking the children to school, shopping, going to the gym, or running errands.
- You learn quickly in the neighborhood one when your potential neighbors plan to sell because gossip moves quickly. You can then use your influence on further arm and, hopefully, gain the listing due to your local skills and knowledge.
2. Do Your Research
Before you commit to farming a particular area, you’ll want to research using your local MLS and Census information.
Here are a few things to research:
- Average income of the homeowners in the neighborhood.
- Types of transportation used.
- Age of the area’s residents.
- Leading employers in the area.
- All nearby amenities such as schools, parks, nightlife, restaurants, shopping, and medical centers.
- Popular home styles within the neighborhood.
- Newly constructed homes.
- Upcoming construction projects.
- Number of real estate agents in the area.
3. Focus on a Niche
Pay attention to the niche you want to target. Is it a family neighborhood? Is it filled with retirees who enjoy golfing? Hone your marketing efforts to fit the niche correctly.
4. Think About Size
Size matters when real estate farming. The area should not be that large and demographically diverse, or you cannot pinpoint your farming practices. Think about reaching 150-200 households.
5. Setting Boundaries
Set boundaries when farming and avoid targeting another agent’s farm. Try to farm an area that is wide open to your methods. If there is an actual established agent within your farming area, then you might not want to try to compete.
6. Compare Areas When Picking a Real Estate Farm
When picking a real estate farming area, try to compare multiple locations to determine which one is the most appealing.
- Examine the average home sale prices, competition, and turnover.
- Average sale price: Gather all the MLS reports of sold listing for the last three years. Calculate the average price for each year.
- Commission average: Take the sale price, and determine the average commission (usually 3 percent).
- Turnover rate: Take the number of homes that have sold and divide it by the number of homes in the geographic area to determine the turnover rate.
Compare areas: Make a chart and compare all the information above to determine which of the top farming areas to focus on your efforts within.
SEND REAL ESTATE FARMING POSTCARDS
Farming for Real Estate Leads Summary
When real estate farming, you’ll want to send Market Update postcards, Just Listed postcards, Just Sold postcards, and Open House Postcards. just listed/just sold notices, market reports, and more. Send your postcard mailers to everyone in the neighborhood at least once a month. Typically, it takes about a year to experience consistent results from real estate farming.
Within the farming materials, you’ll want to showcase your skills, local knowledge, and more to convey that you are indeed a real estate expert. Make sure that everything has your phone number, website, email information, and social media connections. The materials should focus on a solid call to action that might be the nudge someone needs to pick up the phone to enlist your services to buy or sell a home.