A Real Estate Agent’s Guide to Selecting and Working A Geographic Farm- Part 1
My husband and I have been consistent farmers for our entire career and it has been a strong source of business for us. Farming isn’t for everyone, however if you decide it is for you and you work it effectively, I am confident that you too will be successful at it.
Your farm is a major investment of time and money so take your time selecting it. Below are some factors you will want to consider when choosing a farm.
Is the area one that you feel comfortable with and it’s convenient for you to work? It’s not necessary that the farm be close to your office, yet it does make it easier to work it and the people in the farm may ask you where your office is located.
Should you farm your own neighborhood? Farming your own neighborhood may work well for you because you may be well connected to the community. Also, the homeowners may be a bit friendlier when they realize you’re a neighbor. I never personally wanted to farm my own area. I worked a lot of hours and didn’t want the neighbors flagging me down as I drove home from a long day. However, it is a matter of preference.
What is the price range you want to be in? While a bread and butter price point will always turn, some farmers like to stretch to the upper end of the price range that is turning to increase their per-listing profit. It is important to be in an area you know well and feel comfortable in. If you decide to go to the upper end you may want to go as high as you can while staying in a range that has decent turnover.
Speaking of turnover, what has been the percentage of homes that have turned over in the last 2-3 years? I have been told a farm should have at least 4.5% turnover. There is now data analytic companies who will help you identify the top 20% of homeworkers who fit the profile of “most likely to move” so you can target them. These analytics will not obviously predict death, divorce, or other financial problems, but there are methods for finding those leads too.
I have met many farmers who chose an area because they liked it, but after time and money invested, they discovered that people rarely moved! Nobody has a crystal ball of course so it’s a bit of a guess. If you study trends and turnovers you can at least identify areas that have potential.
Are there any major competitors in the area who are already established? It is nearly impossible to find a farm where you’ll have zero competition, but some competitors are fiercer than others.
The established veteran farmer with dominant market share will fight you when you try to enter their territory. You may not want to invest the time and money needed to beat them.
If you do decide to take on a veteran, determine where they are weak. Are they sporadic in their efforts? Do they have many expired listings? Do they only mail vs. door knock?
Is there a community center, park, or clubhouse in the neighborhood? This can be helpful because it makes it easy to hold events and participate in events that may be ongoing in the area.
How big should my farm be? Between 500-1,000 homes is a common size of a first farm for new farmers. As you achieve success you may choose to set funds aside and expand your farm. It is not mandatory for your farm to be close by, however it makes it easier to gain and maintain brand recognition.
Who can help me choose my farm? Talk to your manager or broker. Ask veteran agents in the office for their opinions of areas you’re considering, and preview any available property. Study important factors like schools, statistics, and trends in the area. You will need to now the area and what is happening there.
Many of my coaches, like myself, are veteran farmers, so if you have any questions or need help we are just an email or phone call away!