Real estate farming is possibly the most proactive position an agent can take to build inventory. Let’s look at how to discover your area, how to affordably market yourself to the area, and how to support your efforts with a neighborhood-specific website.
Turnover Rates and Months of Inventory
A good farming strategy involves determining two crucial factors: turnover rate and months of inventory.
Turnover rate is a simple calculation that helps to identify whether the area has enough sales activity to sustain your prospecting campaign. To figure out the turnover rate in your potential farm area, divide the number of homes in your farm area by the number of homes sold in the last 12 months. Most agents look for areas with a 7 percent or higher turnover rate.
To calculate months of inventory, divide the number of active listings on the market by the number of homes sold per month on average during the previous 12 months. A healthy market usually has between five and six months’ supply of inventory. For more details on both, click here.
Postcards and Prospects
Once you nail down a manageable farm area, mail out simple 4- by 6-inch postcards to the neighborhood, with minimal branding. (Be sure to comply with your state’s rules on any branded contact info that is required.) Each postcard should have very specific copy for that neighborhood.
For each response, follow up with RPR reports on market trends, your newsletter, etc. This no-pressure style works well with customers and it helps you build a reputation for providing highly valuable information. And when these folks are ready to buy or sell, guess who they’re coming to?
Neighborhood Specific Website
The postcards mentioned above will contain a website address that offers reports on neighborhood home values and the homeowner’s property in exchange for the homeowner’s information. The website does not have any branding other than the agent’s name and license number. Be sure to take pictures of the properties and landmarks in the farm area and feature them on the site.
Now, you may be asking yourself, “How will I build it?” Try Placester. They make it simple for real estate professionals to build sites that engage buyers and sellers. For this tactic, keep the details to a minimum. Placester also has a strategic partnership with NAR, which offers free NAR Edition IDX websites. Click here and here for more info.