What Is Farming in Real Estate — and How to Get Started
Nov 09, 2021As you get into the real estate industry, you’re likely going to hear the term “farming” quite often. You might even hear farming mentioned as one of the first activities you should do as a Realtor. But with no true handbook available to new agents, it can be hard to know where to start let alone what exactly it is.
So what is farming in real estate?
Farming is a marketing practice with the end goal of owning market share in a specific area. A successful farm would indicate that you are the go-to agent of that geographic area. If done correctly, farming can provide a massive percentage of your overall annual revenue as well as a consistent stream of leads.
Before you start the act of marketing and connecting with people in your farm area, it’s important to do the work upfront researching and preparing your knowledge base. Here are five helpful steps for preparing your farm:
Pick two areas to research as potential farms.
The first thing you’ll want to do is figure out what sort of area and location is best for your farm. Before you even start making that decision, pick two areas to research. Maybe this exercise will teach you what you DON’T want or maybe you’ll actually end up pursuing one of these areas, but either way it will be a helpful benchmark.
Pick an area with 500 or fewer homes to start. You can always expand your farm, but you don’t want to overwhelm yourself from the get-go.
Leverage your title company to get the information you need.
Once you narrow down your search to a few areas you are strongly considering, you’ll want to expand your research further. It’s really important that you choose an area with consistent turnover of around 10% over the past 12 months or so.
You’ll also want a list of all the homes sold over the past few years, all the homes in escrow, etc. You should have established a relationship with a title company as you set up your business, and now is the time to leverage that relationship. Your title company rep should be able to provide you the information you need to narrow down your search further.
Become the area expert.
Now that you’ve decided on your farm area, it’s time to start the real research. Before you even begin door knocking and reaching out to residents, you need to solidify yourself as a true area expert. Not only should you be able to answer any question that could possibly come up with a buyer, but you should know even more than the residents themselves.
Some topics you’ll want to research are local schools, average age of homeowners, length of time it has taken nearby homes to sell, etc. You might even print out a map of the neighborhood to put on your wall so you can take notes and circle areas as you research and plan.
Once you start door knocking, this is a great way to mark you’ve spoken to, if there is an opportunity, etc.
Decide on a strategy for making your farm work for you.
Now the time has come to start your targeted marketing efforts in your chosen farm. This can be a scary and vulnerable process, so be sure to prepare and find a technique that works well for you. You might consider reaching out to a fellow agent you can shadow, or taking a course that breaks down what and how you should speak to people as your market.
Be willing to change your farm.
Great! You did all the research. You started farming. Maybe you’ve had some success but the market is slowing down in that area. Maybe the area has not turned out to be as effective as you have hoped. Maybe it worked for a few years, but isn’t as much any more. Don’t be afraid to change your farm.
The best farm is the one that is working for you, and you need to be open to the fact that it may change.
