What Does It Cost To Farm A Neighbourhood?
So you want to be a Realtor? Well most books you read out there will tell you that you need to farm a neighbourhood. Hey, I’m not saying that rule is written in stone because in this day and age you can prospect from your social groups or by targeting a particular age or demographic through tools like Facebook. But there are advantages to working one neighbourhood…especially one that you live in. Obviously you are familiar with it. People see you out and about (maybe with your dog) so there maybe some recognition. You go to the local stores and of course you tour properties in the vicinity to gain expert knowledge. Your geographic farm is only as big as you determine, but the realities are that the bigger the area, the more expensive it is to farm it and promote it. I like to tell new agents that you should target one or two buildings or about 500 homes before taking on more. So, last week we did a little noodling in our office about just how expensive farming can be. We outlined the action and the cost associated with it. Here’s what we came up with;
As you can see there is a healthy mix of the good old tried and true techniques that I believe should not be disqualified. They still work and provide the public with name recognition. They include newsletters, flyers, local paper ads, door knocking, cold calling. Add into the mix some ideas, like joining local BIA’s and neighbourhood committees, holding buyer or seller seminars and sponsoring kids teams and you have the making of a fairly substantial marketing program. On top of those more traditional approaches, social media has given the savvy realtor even more tools. Agents are creating neighbourhood channels, websites and Facebook groups, to speak with authority about what’s happening in the area. They are using video to promote local attractions and businesses and are tweeting out the latest gossip. They aren’t mentioning that they are Realtors right away though. It’s a round-about marketing technique that aims at gaining trust before asking for the business. It’s about proving to buyers and sellers that you are more dialed in to the nuances of the neighbourhood than the next guy.
You do all these things are for the sole purpose of networking (prospecting in real estate parlance). For the most part the things that you do take more time than money, but when you are starting off, you’ve got nothing but time.
Add it up and you have an idea on what it’s all going to cost you. About $20,000 per year. That falls in line with our company’s belief in spending about 10% of your earnings on marketing. The cost associated with the actions we came up with were based on actual costs that agents in my office spent and we tried to limit the size of the farm area to 1000 doors. Obviously there are some economies of scale in farming. For example, the cost to produce a video isn’t going to change depending on the size of your farm but the cost of gifts, newsletters and flyers will. There is one other factor to consider and that is location. A billboard in Rosedale (one of Toronto’s most affluent neighbourhoods) is going to cost a lot more than one in Kingston Ontario. Don’t let these numbers scare you. In a perfect world you would accomplish all this and more. For now though it’s important to recognize that some of the best things you can do is get out there and shake some hands. That’s the most cost-effective farming you can do!
Is there any downside to geographic farming? Sure. a Client you’ve taken out a bunch of times decides to look across town and thinking that you don’t know anything about it hires another agent. The best defense is a good offence so while you are out, let the clients know that you are familiar with all the neighbourhoods of the city.
mark mclean is the Broker/Manager at the Bosley Real Estate Queen St W office and President-Elect for the Toronto Real Estate Board. The opinions expressed here do not reflect the opinions of TREB or Bosley RE.