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Ask Dr. Real Estate
Should I Buy the Farm?
by Dr. Kenneth W. Edwards GRI

QUESTION:

I heard a lot about "farming" before I entered the real estate profession, but I haven't seen any of the old timers in my office actually doing it. I'm not afraid of hard work, but is farming really worth the effort?

ANSWER:

It's possible that many of those veterans are actually doing their own version of farming, since the term includes a number of activities. It is also possible that they did a lot of farming when they were getting started and are now working primarily with former clients and referrals. In any event, it's important that you know what farming is, along with its potential benefits, so you can make your own choices.

Define Your Terms: Real estate farming is nothing more than a form of prospecting in which a specific population is targeted and "farmed" for prospective customers and clients. One reason rookie REALTORS® are strongly encouraged to farm is that it forces them into a disciplined, methodical approach to getting started.

An even more important reason is that farming, if properly planned and executed, can generate a lot of business. I once received an email from a young man who was currently a waiter in a restaurant. He said he was interested in a real estate career because "I'm not an order taker." That captures the essence of becoming a successful real estate professional. You have to generate business. Done properly, farming will help you do that.

Geographic Farming: In this type of farming you identify and map out a specific neighborhood and then design a strategy to become identified in that locale as the real estate professional to whom people turn. Becoming known is achieved through a variety of activities, including telephone calls, direct mail, and periodic promotional activities. The size of the farm can vary, but may be as large as several hundred homes.

Hi, Neighbor! When I teach my real estate licensing class at the local community college I suggest to my students that as soon as they are licensed they let everyone in their neighborhood know they are in the business and provide them with information about prior and current sales of homes in the neighborhood. One student lived in a very nice area of new homes. She followed my advice (and actually improved upon it considerably) and got a listing and sale almost immediately. Since then she says it has been an incredible source of business for her.

Sphere of Influence Farming: In this version the target population is a group of individuals identified on the basis of membership in clubs or fraternal organizations, or it may simply be friends, former business associates and even relatives. The most lucrative type of sphere of influence farming involves former clients and customers. That won't help a lot when you are getting started, of course, but it's critical to keep in mind. If, after a few years, you are not getting a steady flow of repeat business, you need to have an honest, heart to heart talk with yourself (and your broker) to determine how you need to change your approach.

Learn to Dance: Here's a form of farming that can pay big dividends. Each time you get a listing (very definitely starting with your first) you will have an incredible opportunity to establish a "mini farm". I call this "Focused Fandango Farming." (Relax, I'll explain.) Here's how it works. When you put your sign in the front yard all of the neighbors within a block or so will be extremely interested in what's going on. They will be watching your progress closely. The number one question in their mind will be what the asking price is, and when you put that "sold" sign in the yard they'll obviously want to know what the final sales price was.

Before you can implement this you will need to do what we called "grunt work" in the Air Force. First you will need to plot your target area, which could be as many as forty or fifty homes in the immediate neighborhood. Then get the names and addresses of the home owners, establish contact by phone or mail, and follow with a visit. Many agents are petrified by the prospect of knocking on a door cold, but in this situation the focus is on the listing, which provides the perfect vehicle for you to demonstrate your professionalism. When you have your open house, invite them. When you sell the home let them know. You can see that once a few of your listings sell, you've got the potential for establishing domain over a very impressive array of your own little fiefdoms. OK ,why "focused fandango farming?" You'll be dancing all the way to the bank.

Farming and the Weather: Mark Twain is quoted as saying: "Everybody talks about the weather, but nobody does anything about it." It's a lot the same with real estate farming. Translating talk into action could result in continuing bountiful harvests for you. Start plowing.

 

 
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