What is real estate farming?
If you’re new to real estate, you might not have heard the term “farming” before (except in your real estate course). But you might not remember exactly what the term means, given you’ve had to memorize tons of other real estate terms and concepts.
If you’re a new investor, you might be just learning some of these industry terms.
But if you’re going to be a successful real estate agent or investor, you need to know what farming is and how to use it to your advantage in your real estate prospecting endeavors.
It also helps to know how to effectively create a farming marketing plan to ensure your success in whatever area you choose to farm for prospects in.
So, what exactly is real estate farming?
Below, we’ll discuss what it is, the different types, as well as ways to use both to maximize your results in real estate and help you reach your goals faster and more efficiently.
What is Real Estate Farming?
Real estate farming is a term used in the industry to describe targeting certain geographic areas within the county or demographic area you’ll be helping people buy and sell homes. Some of the most successful real estate agents use it as part of their marketing plan to determine which areas to focus on.
They “farm” these areas for leads using a variety of techniques, such as:
- Email newsletter
Make sure to include all pertinent contact information on everything so that people know how to contact you. It’s also more effective to put statistics in whatever you’re sending out.
Farming this way can help you position yourself as an expert in your community.
Have people sign up using their email to get monthly or quarterly reports and once they sign up, their data can easily be transferred or uploaded to your customer relationship management (CRM) system.
Once you make contact and start nurturing your leads, you can use scripts to help you do it.
Geographic farming is the most common type of real estate farming. By using this method, you’ll be able to figure out which areas would be the most beneficial to focus on, and which can be valuable to your clients.
But choosing the right farm area can mean all the difference when it comes to being successful. Most agents choose a farming area right in their own backyards – their own neighborhoods.
When selecting a geographic farm area, consider the following:
- The competition
- Types of homes
- Local amenities
- Level of desirability
- Local demographics
- Size of the area (or number of homes in the area)
- Turnover rate
- Average age of residents
- Average sales price for that area
- Nearby employers
- Commuter area
- Average income
- Transportation options
- School ratings
Taking all these factors into consideration while you’re creating your plan can increase your chances of success.
Demographic farming is slightly different from geographic farming, and you can probably guess why. It focuses on using your marketing efforts on a specific demographic within your geo-farming area. So, basically, it’s taking geo-farming a step further by diving into your farm area to find out who you’re targeting as a buyer.
Some specific groups you might target include:
- First-time home buyers
- Downsizing sellers
- Move-up buyers
- Luxury home buyers or sellers
Regardless of which group you’re targeting, make sure to abide by the Fair Housing Act, as well as your local and state fair housing laws.
How Real Estate Farming Works
Now that we’ve answered the question, “what is real estate farming?” we can move on to learning about how the process works.
The first thing you’ll need is access to the multiple listing service (MLS), which you should’ve gained access to after you signed on with your broker (if you’re an agent).
If you’re a real estate investor, you can work with a real estate agent to gain access to the MLS.
On the MLS, you can check out the different types of reports you can export. You can research what homes sold in the past 30, 60, or 90 days in most cases.
Use these reports to determine the best farming area for you.
How to Create Your Own Farming Plan
Creating your own farming plan can help you stay on track to meet your business goals in real estate. It can lay everything out and let you know where to focus your marketing efforts each day.
Find a farming area that’s close to your home so you don’t have to travel too far to show properties or meet with buyers and sellers.
Farming in your own neighborhood provides some of the following benefits:
- You Already Know the Area. You already know the neighborhood, so when someone asks questions, you’ll be able to answer them much more effectively.
- It’s Easy to Connect with Prospects. Wear your realtor badge (if you’re a realtor) while running errands around town and you’ll run into prospects everywhere you go – the grocery store, the gym, the post office, etc.
- You Might Already Have Community Connections. Farming in your own neighborhood might mean you already have connections to people in that area, whether it’s your local dentist, your local florist, or maybe even the mayor.
- You’ll Always Know When Someone is Thinking of Selling. Things like this come up in normal conversation. The Petersons tell you their son is graduating from high school and attending college in the fall. And it might come out that they want to downsize and find a smaller home. You never know where you’ll pick up valuable information you can use in your real estate business.
As you can see, the benefits of farming in your own neighborhood are plentiful and can lead to more sales in the end.
Once you’ve considered all of the above, you can sit down and create a marketing plan. What kind of prospecting will you do in your geo-farm area to generate leads?
Will you use social media? Paid ads?
And once you have prospects in your system, how often will you call them to follow up? Will you add them to an email list and send out periodic market updates quarterly? Monthly?
All of the above should be outlined in your real estate farming marketing plan.
Defining Your Target Market & Dominating Your Area
As we briefly touched on earlier, defining your target farming market means knowing what type of customer you’ll be targeting. Will that be first-time home buyers? Investors?
It’s time to get specific and be clear about that.
Once you’re clear about it, you can start building up your presence in the area with the above-mentioned mailers, postcards, or whatever you decide to use to reach your target farm audience.
You can also use door hangers and, as old school as it sounds, go knowing on doors. Neighborhood events can also be a great source of leads. Some agents even cold-call prospects to generate leads.
Defining Boundaries and Finalizing Your Farm Area
While you’re searching for farm areas, look for well-defined boundaries. That means finding established boundaries that make it easier to market your listing effectively. You want to ensure that the geographic area you work in is clear to you as well as other people.
Making sure you have clear boundaries means ensuring you avoid overstepping into another agent’s farming area. That means you should probably check for competing real estate farming agents in the area prior to finalizing your farming area. It might not be practicable to try to compete against an agent in a nearby or the same farming area, mostly because they’ll have a head start (having farmed the area before you).
So they might’ve already started gathering contacts in the area that they have already made contact with. In that case, it’s better to narrow down your farming area to make sure you’re not encroaching on anyone’s turf.
Building a Social Presence
Clients love to see that their real estate agent has an online presence. That means you should have at least a website, but building more of an online social presence can only help your chances of success. Farming simplifies the process of real estate farming by allowing you to focus on the right prospects where they’re already spending time online. That could mean forums, search engine rankings, blogs, targeted social media ads, or a combination of these.
Finding Your Farming Footing
Finding your geo-farming area and your demo-farming for your real estate business is essential if you want to be successful with farming. The top-earning agents recognize the benefits of farming an area and a specific demographic to maximize results. You can do the same thing and increase your earning potential twice over, if not more. But you have to have the right tools in order to succeed, which, in this day and age, means finding the right technology to help you minimize your effort while maximizing your return.
ProspectNow has been around for over a decade (since 2008). The data that users can get from ProspectNow is a lot more expensive on other competing platforms. By using ProspectNow, users will close more deals, and therefore, make more money! ProspectNow is a vital tool for their business success in real estate or real estate marketing. Additionally, ProspectNow is trustworthy and easy to do business with, and a provider of reliable data. Start your free trial today!