One of the most tried-and-true and dependable marketing strategies for real estate agents in geographic farming, or "geo farming." Agents must employ geo-farming for a number of reasons in order to maximize their output, but one of the most important justifications for doing so is the growing economic potential of this tactic.
Real estate is a highly local industry. This means that both buyers and sellers look for a REALTOR who is knowledgeable about the neighborhood or location they plan to purchase in. Nothing about this is novel. However, the trend we are witnessing is a rise in demand for an expert. This is mostly driven by the modern consumer's growing understanding.
Consumers used to rely on their agents to sell them records, give them data, and walk them through the entire process back in the day. The modern customer wants more than simply a licensed agent because they have access to more information than ever before.
This idea shouldn't be scary. It's a huge benefit for both the client and the agent. Consumer advantages are obvious, but for brokers, it frees us up to concentrate on positioning, strategy, and differentiating the listing.
A generalist who covers a sizable territory (a large metropolis or a city and its environs) simply cannot be as familiar with every niche of these marketplaces as a geo-farming agent.
Geo-farming is a significant point of differentiation as a result.
Additionally, in the modern world, agents without differentiators are at a disadvantage.
Describe Geo Farming
In a real estate marketing tactic known as "geo farming," agents concentrate their efforts on a specific area or neighborhood.
The agent who chooses geographic farming as a tactic often distributes postcards on a recurring rhythm to a set of residences in a neighborhood. The agent also makes an effort to be as noticeable as possible in the neighborhood by mingling with neighbors, supporting causes, throwing block parties, knocking on doors, and remaining active in the neighborhood.
One widespread misperception regarding geo-farming is that it consists simply of sporadic postcard distribution. Not at all like geo farming. This is merely a component of geo-farming.
Agents of geo-farming will be as noticeable in the neighborhood. both physically and electronically. They will, for instance, carry out the following:
- Mailers and postcards
- Promote activities
- Events and block parties to host
- Create numerous blogs and articles about the neighborhood
- Utilize social media and video to reach the neighborhood
- Knocking on doors nearby
- Make contact with nearby companies and work together
- Spend some time in the parks, tourist attractions, eateries, and coffee shops.
Sending mailers is only one aspect of geo-farming.
Selecting A Geo Farm
One of the most important aspects of your hiring process is the turnover rate, but there are other factors at play as well.
Downtown or the suburbs
The finest places for a geo farm are in the suburbs and the city. Due to the long commutes and limited space, people regularly relocate from the suburbs. In addition, there is a lot of new construction in these two locations, thus several sellers did not initially utilize an agency to purchase.
Although it's not necessary, it helps to live on the farm. An alternative is a nearby neighborhood. This is necessary since you must be observable in public places like parks, eateries, and coffee shops. It doesn't mean you can't do this if you don't live close to the community, but it creates conflict. Added choices? Select the area where you want to relocate. You're probably going to want to participate regularly in the community.
The economic potential isn't there if it's too low. If the price is too high, it is probably (but not necessarily) widely cultivated. For further information on this dynamic, go to the section on the turnover rate above.
500 Houses To Begin
This number is large enough to get a few calls, but not so big as to be prohibitively expensive. If you send 12 to 24 mailers per year, this is a number you could theoretically door-knock and is also reasonably priced.
What Is The Biggest Mistake In Farming?
The agent leaves too soon. You should be ready for a year of unsuccessful marketing. Although this isn't always the case, planning for it will help you avoid cutting the cord too soon.
Run the calculations on the commission you'd collect if you had 20–30% of the market share if you're worried about the expense for a year or two. With the aforementioned strategy, it is realistic to expect that you will have more than 10% of the market share in two years and more than 20% of the market share by years four through five.
Long-term farming commitments are profitable. If you expect a result in six months, you'll give up too soon. You will gain from this long-term strategy for many years to come.
Ideas For Real Estate Farming
This section will recap each concept that has been covered in this post. We'll also provide you with more suggestions for adjusting your geo-farming strategy to fit your target market, character, and preferences.
When starting a geo farm, these are essential. Even if there are no buyers, sold listings, or new listings in the neighborhood, you still want to be in front of people to develop your brand.
Using generic postcards will help you develop your brand and generate leads. Both have equal value.
Content And Vital Information:
Most important to sellers is getting the best price with the least amount of difficulty. As a result, adjust your messaging accordingly.
Displaying the most recent sales figures, statistics, and market trends adds value. You might even spotlight a nearby family or business—both are good choices.
Make sure your image appears on each postcard you produce. People are drawn to marketing that includes faces, and as your brand grows in the neighborhood, so will interest. They frequently spend more time studying the piece and keep it for a few extra days.
You can hand-deliver these, mail them, or knock on people's doors.
What Is The Price Of Geo Farming?
Budgets for geo farming can differ based on how you approach the tactic, however, there are some general guidelines.
The majority of farms will cost between $0.50 and $1.25 per dwelling per month. This is where you should base your calculations. Plan on paying about $1.25 if you host numerous events and choose postal delivery over door-to-door solicitation. You'll probably spend less than $0.50 per house each month if you spend less on events and door-to-door marketing instead of paying for mail delivery of your quarterly reports and postcards.
Choose the budget that works best for you while keeping the economy's potential in mind. Calculate the annual income that could be earned if you had 10% of the market based on your turnover rate. By the end of years 2-3, you ought to be close to achieving this with this technique.
A different popular tactic is to base your GCI (gross commission income) on a 10% market share. After a second year of regular farming, that will be your aim. Then divide that income in half, and use that as your agricultural budget.
Geo-farming is a tried-and-true tactic that will always be a part of the marketing plan of the wise real estate agent. The consumer gains assurance that they are selecting a competent agent with market expertise and experience. However, agents do a number of errors when farming, including picking the incorrect farm, relying solely on postcards, and failing to develop community and relationships both physically and virtually.
But most significantly, they gave up too soon. Before deciding to farm isn't for you, give it 1-2 years, and keep in mind that almost all top producers have geo farms. This tactic is effective.