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Farming

Farming. Michael Devlin KW Silicon Valley. Earning potential. Assume a home sale of $600,000 with 2.5% commission to listing side equals $16,250 commission to you. Assume that families move every ten years = 10% annual turnover rate. 500 homes in farm x .10 = 50 possible listings .

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Farming

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  1. Farming Michael Devlin KW Silicon Valley

  2. Earning potential • Assume a home sale of $600,000 with 2.5% commission to listing side equals $16,250 commission to you. • Assume that families move every ten years = 10% annual turnover rate. • 500 homes in farm x .10 = 50 possible listings. • Income from listings that sell: • 10% MARKET SHARE = 5 listings x $16,250 = $81,250 • 20% MARKET SHARE = 10 listings x $16,250 = $162,500

  3. Earning potential • Income from sellers that buy. Assumes 1/3 of all sellers purchase another home through you, and that they purchase a home 1/3 more expensive than the one they currently own. $800,000 x 2.5% commission = $20,000 commissions to you. • 10% MARKET SHARE = 5 listings 1/3 = 1 x $20,000 = $20,000 • 20% MARKET SHARE = 10 listings 1/3 = 3 x $20,000 = $60,000

  4. Earning potential • COMBINED POTENTIAL • 10% MARKET SHARE = $81,250,000 (listings) + $20,000 (buyers) = $101,250 to you. • 20% MARKET SHARE = $162,500 (listings) + $60,000 = $222,500 • CRITICAL MASS. 1 or 2 FOR SALE signs in an area where there are 10-12 listings are not sufficient to reach critical mass. When you have 20-30% of the FOR SALE signs, then you will receive an increased number of calls from drive through and neighbors. People will start calling you! Usually happens after 3-5 years of hard work.

  5. What Is Farming? Power Session 6 Page10

  6. Myths about Farming Power Session 6 Truth Farming can become the core of your business. Page13

  7. Myths about Farming Power Session 6 Truth No one is ever as dominate as you think. Page14

  8. Myths about Farming Power Session 6 Truth A farm does not have to be your only source of business. Page15

  9. Myths about Farming Power Session 6 Truth It’s the synergistic impact of both marketing and prospecting. Page16

  10. Myths about Farming Power Session 6 Truth You must pursue your farm consistently and persistently. Page17

  11. Selecting Your Farm Power Session 6 Geographic Farm Page20

  12. Selecting Your Farm Power Session 6 • Your Goals • Market Share • Gross Closed Income • Number of closed transactions • Your Budget • Time • Money Prospecting Based, Marketing Enhanced Page21

  13. Selecting Your Farm Power Session 6 • Size of Geographic Farm • Option to start small • Grow to adjacent streets or neighborhoods • Easier to meet everyone Page22

  14. Selecting Your Farm Power Session 6 • Location of Farm • Accessibility • Existing geographic boundaries • Kind of homes • Desirability • Number of Haven’t Mets vs. Mets Page23

  15. Selecting Your Farm Power Session 6 • Average Sales Price • Will this support your goals? • Turnover Rate • National Average is 16.6 percent • Target a farm of at least 10 percent Page24

  16. Selecting Your Farm Power Session 6 Source:“2012 NAR Profile of Home Buyers and Sellers” Page25

  17. Selecting Your Farm Power Session 6 • Other Market Conditions • Days on market • Expired listings • Competition • Market Share vs. Mind Share • Your Fit for the Farm • Can I relate and fit in with them? Page26

  18. Selecting Your Farm Power Session 6 Demographic and Psychographic Farms Page27

  19. Farm research • Select target farm area • Determine the total number of homes in this area • Average selling price • Number of properties transferred in the past year • Number of current listings • Analyze what number and percentage of listings sold by company and sales associate

  20. Selecting Your Farm Power Session 6 Defining Your Identity and Positioning • Personality • Fit • Image • Values • Interests • Lifestyle Page35

  21. Working Your Farm Power Session 6 Truth Lead generation doesn’t have to cost money. Page39

  22. Working Your Farm Power Session 6 Establish Your Reputation First • Reputation vs. Relationships • Be sincere about who you are Page40

  23. Working Your Farm Power Session 6 Prospecting in Your Farm • Relationship Farming • Prospecting Based, Marketing Enhanced Page41

  24. Working Your Farm Power Session 6 EXERCISE Geographic Farm ____ number of homes in my farm ÷ ____ weeks I will knock on doors = ____ x 3 minutes = ____ minutes I will devote every other week Time: 5 minutes Page42

  25. Working Your Farm Power Session 6 Work Smarter, Not Harder Mary Harker: • Find your “bird dogs.” • Core Advocates who refer business. Page43

  26. Working Your Farm Power Session 6 Come from Contribution • Have something of value to give. • Meet people face-to-face. Page44

  27. Working Your Farm Power Session 6 Come from Contribution • Create a directory. • Organize a neighborhood yard sale. • Start a website. • Create an email “list serve” group or blog. Page45

  28. Working Your Farm Power Session 6 EXERCISE Low/No Cost Items for Giveaways Brainstorm low/no cost items to drop off. Time: 15 minutes Page46

  29. Average List/Sale Price Sales to List Price Ratio Average Days on Market Current Inventory Number of Expireds Working Your Farm Power Session 6 Housing Update Newsletter Page47

  30. Working Your Farm Power Session 6 Be Prepared • Learn your scripts. • Ask for referrals. Page49

  31. Working Your Farm Power Session 6 EXERCISE 12 Direct • Determine how many people you need • What would a balanced database look like? Time: 5 minutes Will the farm you selected support your goals? Page50

  32. Working Your a Farm Power Session 6 Create a mini-farm–with a call to action! Page51

  33. Working Your Farm Power Session 6 Page52

  34. Working Your Farm Power Session 6 Page53

  35. Working Your Farm Power Session 6 Build Trust and Recognition • Market your listings aggressively. • Concentrate your open houses. • Host seminars and classes. • Join local organizations. • Get to know the renters and landlords. • Contact every FSBO and expired listing. • Create a local flavor for your marketing. Page54

  36. Working Your Farm Power Session 6 Page54

  37. Working Your Farm Power Session 6 Working Toward Higher Goals • Increase the size of the farm • Increased costs • Increased efforts • Increase Prospecting • Increase efforts • Increase Marketing • Increased costs • Increase all three Do you consider a different farm area all together? Page55

  38. Putting It All Together Power Session 6 The 3-Hour Habit • Time block 3 hours every workday before noon. • No skipping. If you must erase, then you must replace. • Allow no interruptions (unless they truly are emergencies). Page 59-60

  39. To Be Successful • Door knock and talk to everyone, • Call everyone via telephone, • Keep track of all the personal information (kids name, hobbies, etc.), • Distribute by mail, personal delivery or by “newspaper child” a flyer each and every week, • Distribute every quarter a gift such as a magnetic calendar, note pads, fly swatter, etc. • Preview all the active listing.

  40. To Be Successful • Learn about the area including schools, shopping, transportation, etc. • Know the floor plans and builders names and models. • Have an idea about the true value of all the homes. • Make your self visible using cars signs. • Drive through the farm area slowly on the way to work each day.

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