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Posts tagged ‘farming real estate’

10
Apr

What Does It Cost To Farm A Neighbourhood?

farming 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;

farm 2

farm 1

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.

23
Nov

The Three Keys to Building a Community Business

This past Monday, we had a guest speaker come in and talk about building community contacts. For agents just getting started, when we talk about communities, we are really talking about a geographical farm area. It can be a few condo buildings or a few city blocks. It actually doesn’t matter how big your farm is. What is important is how you work it. Believe it or not there is a science to geographic farming. At the beginning of the month, in response to a Mastermind meeting, I wrote a blog about competing with established players in a neighbourhood. You can check it out here; http://bit.ly/rSDssM but it occurred to me that I really should backtrack a bit and talk about choosing a farm area.

It seems appropriate that agents tend to work in areas that they either currently live or grew up in. That’s a good place to start.   Obviously it is important to know your farm area, but it is  more important to understand that you need to play to your strengths. Here is what I mean; you may have grown up in Rosedale or some other exclusive neighbourhood but the people who buy there are in their forties and fifties. They may not beyour peers. They may be your elders. Consider farming in neighbourhoods that are more your age demographic.  You have a better chance building rapport with the people you hang out with.

Keep your farm area small. It is easier to grow your farm area as you get more established and successful, but starting out big and scaling back is simply a waste of money. Flyers, love them or hate them, can work. But with just seconds to make an impression, it is important to keep the message memorable and short. Remember that a small market creates efficiencies of delivery and repetition. The key to successful farming is to keep delivering the message. So, it may be better to create 12 really good cards and deliver them to 500 homes than to create 3 cards and deliver them to 2000 homes.

Finally, your reputation is on the line every day. It is your best weapon for building good will. To maximize your exposure, to keep in the forefront of everyone’s mind, you need to be out and about. Act like you are running for office. Shake lots of babies and kiss lots of hands. Wait. I mean shake hands and kiss babies. The only difference between you and a politician is that your goal is to keep the promises you make.

So there you have it. The three keys to successful farming. Choose the right area, keep it small and show them how good you are. The first two should be easy enough, but if you are having problems with the last one, don’t sweat it. There is a blog post for that. http://bit.ly/tgkfpi 

Have a great week!

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