Farming
Michael Devlin
KW Silicon Valley
Earning potential
• Assume a home sale of $600,000 with 2.5%
commission to listing side equals $16,250
commission to you.
• Assume that families move every ten years = 10%
annual turnover rate.
• 500 homes in farm x .10 = 50 possible listings.
• Income from listings that sell:
– 10% MARKET SHARE = 5 listings x $16,250 = $81,250
– 20% MARKET SHARE = 10 listings x $16,250 =
$162,500
Earning potential
• Income from sellers that buy. Assumes 1/3 of
all sellers purchase another home through
you, and that they purchase a home 1/3 more
expensive than the one they currently own.
$800,000 x 2.5% commission = $20,000
commissions to you.
– 10% MARKET SHARE = 5 listings 1/3 = 1 x
$20,000 = $20,000
– 20% MARKET SHARE = 10 listings 1/3 = 3 x
$20,000 = $60,000
Earning potential
• COMBINED POTENTIAL
– 10% MARKET SHARE = $81,250,000 (listings) + $20,000
(buyers) = $101,250 to you.
– 20% MARKET SHARE = $162,500 (listings) + $60,000 =
$222,500
• CRITICAL MASS. 1 or 2 FOR SALE signs in an area where
there are 10-12 listings are not sufficient to reach
critical mass. When you have 20-30% of the FOR SALE
signs, then you will receive an increased number of
calls from drive through and neighbors. People will
start calling you! Usually happens after 3-5 years of
hard work.
Power Session 6
What Is Farming?
Page 10
Power Session 6
Myths about Farming
Myth 1
Farming takes too long and costs too
much.
Truth
Farming can become the core of your
business.
Page 13
Power Session 6
Myths about Farming
Myth 2
Someone else already dominates the
area.
Truth
No one is ever as dominate as you think.
Page 14
Power Session 6
Myths about Farming
Myth 3
A farm limits you to that area or specialty.
Truth
A farm does not have to be your only source of
business.
Page 15
Power Session 6
Myths about Farming
Myth 4
It’s all about mailers and mass marketing.
Truth
It’s the synergistic impact of both marketing
and prospecting.
Page 16
Power Session 6
Myths about Farming
Myth 5
You can stop and start your farming
efforts.
Truth
You must pursue your farm consistently and
persistently.
Page 17
Selecting Your Farm
Power Session 6
Geographic Farm
10 Factors to Consider
1.
2.
3.
4.
5.
Your Goals
Your Budget
Size
Location
Haven’t Mets vs. Mets
6. Average Sales Price
7. Turnover Rate
8. Market Conditions
9. Competition
10. Your Fit for the Farm
Page 20
Selecting Your Farm
Power Session 6
•
Your Goals
–
–
–
•
Market Share
Gross Closed Income
Number of closed transactions
Your Budget
–
–
Time
Money
Prospecting Based, Marketing Enhanced
Page 21
Power Session 6
Selecting Your Farm
3. Size of Geographic Farm
–
–
–
Option to start small
Grow to adjacent streets or neighborhoods
Easier to meet everyone
Page 22
Power Session 6
Selecting Your Farm
4. Location of Farm
–
–
–
–
Accessibility
Existing geographic boundaries
Kind of homes
Desirability
5. Number of Haven’t Mets vs. Mets
Page 23
Power Session 6
Selecting Your Farm
6. Average Sales Price
–
Will this support your goals?
7. Turnover Rate
–
–
National Average is 16.6 percent
Target a farm of at least 10 percent
Page 24
Power Session 6
Selecting Your Farm
Source: “2012 NAR Profile of Home Buyers and Sellers”
Page 25
Power Session 6
Selecting Your Farm
8. Other Market Conditions
–
–
Days on market
Expired listings
9. Competition
–
Market Share vs. Mind Share
10. Your Fit for the Farm
–
Can I relate and fit in with them?
Page 26
Power Session 6
Selecting Your Farm
Demographic and Psychographic Farms
10 Factors to Consider
1.
2.
3.
4.
5.
Your Goals
Your Budget
Size
Accessibility
Haven’t Mets vs. Mets
6. Average Sales Price
7. Motivation
8. Current Trends
9. Competition
10. Your Fit for the Farm
Page 27
Farm research
1. Select target farm area
2. Determine the total number of homes in this
area
3. Average selling price
4. Number of properties transferred in the past
year
5. Number of current listings
6. Analyze what number and percentage of listings
sold by company and sales associate
Power Session 6
Selecting Your Farm
Defining Your Identity and Positioning
• Personality
• Fit
• Image
• Values
• Interests
• Lifestyle
Page 35
Power Session 6
Working Your Farm
Myth
I don’t have the money to lead generate.
Truth
Lead generation doesn’t have to cost money.
Page 39
Power Session 6
Working Your Farm
Establish Your Reputation First
• Reputation vs. Relationships
• Be sincere about who you are
Page 40
Power Session 6
Working Your Farm
Prospecting in Your Farm
• Relationship Farming
• Prospecting Based, Marketing Enhanced
Page 41
Power Session 6
Working Your Farm
EXERCISE
Geographic Farm
____ number of homes in my farm
÷ ____ weeks I will knock on doors
= ____ x 3 minutes
= ____ minutes I will devote every other week
Time: 5 minutes
Page 42
Power Session 6
Working Your Farm
Work Smarter, Not Harder
Mary Harker:
• Find your “bird dogs.”
• Core Advocates who refer business.
Page 43
Power Session 6
Working Your Farm
Come from Contribution
• Have something of value to give.
• Meet people face-to-face.
Page 44
Power Session 6
Working Your Farm
Come from Contribution
• Create a directory.
• Organize a neighborhood yard sale.
• Start a website.
• Create an email “list serve” group or blog.
Page 45
Power Session 6
Working Your Farm
EXERCISE
Low/No Cost Items for Giveaways
Brainstorm low/no cost items to drop off.
Time: 15 minutes
Page 46
Power Session 6
Working Your Farm
Housing Update Newsletter
•
•
Average List/Sale Price
Sales to List Price Ratio
•
•
•
Average Days on Market
Current Inventory
Number of Expireds
Question
How can you modify this for your
niche?
Page 47
Power Session 6
Working Your Farm
Be Prepared
•
•
Learn your scripts.
Ask for referrals.
Page 49
Power Session 6
Working Your Farm
EXERCISE
12 Direct
• Determine how many people you need
• What would a balanced database look like?
Time: 5 minutes
Will the farm you selected support your goals?
Page 50
Power Session 6
Working Your a Farm
Create a mini-farm–with a call to action!
Page 51
Power Session 6
Working Your Farm
Question
What are 12 items that you might send as part
of your 12 Direct plan?
Page 52
Power Session 6
Working Your Farm
Question
What are some actions you can take to make
your 12 Direct plan more effective?
Page 53
Power Session 6
Working Your Farm
Build Trust and Recognition
• Market your listings aggressively.
• Concentrate your open houses.
• Host seminars and classes.
• Join local organizations.
• Get to know the renters and landlords.
• Contact every FSBO and expired listing.
• Create a local flavor for your marketing.
Page 54
Power Session 6
Working Your Farm
Question
What are some services you could offer to
establish yourself as the expert?
Page 54
Power Session 6
Working Your Farm
Working Toward Higher Goals
• Increase the size of the farm
•
•
•
Increase Prospecting
•
•
Increase efforts
Increase Marketing
•
•
Increased costs
Increased efforts
Do you consider a
different farm area all
together?
Increased costs
Increase all three
Page 55
Power Session 6
Putting It All Together
The 3-Hour Habit
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–
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Time block 3 hours every
workday before noon.
No skipping. If you must erase,
then you must replace.
Allow no interruptions (unless
they truly are emergencies).
Page 59-60
To Be Successful
• Door knock and talk to everyone,
• Call everyone via telephone,
• Keep track of all the personal information (kids
name, hobbies, etc.),
• Distribute by mail, personal delivery or by
“newspaper child” a flyer each and every week,
• Distribute every quarter a gift such as a magnetic
calendar, note pads, fly swatter, etc.
• Preview all the active listing.
To Be Successful
• Learn about the area including schools, shopping,
transportation, etc.
• Know the floor plans and builders names and
models.
• Have an idea about the true value of all the
homes.
• Make your self visible using cars signs.
• Drive through the farm area slowly on the way to
work each day.