Ultimate Guide: Geo Farming in Real Estate [2023]
Geo Farming Ideas, Costs, Strategy and How To Choose A Farm
Geographic farming, or "geo farming" is one of the most proven and dependable marketing ideas for real estate agents. There are various reasons agents need to use geo farming to maximize their production, but one of the valuable reasons to consider geo farming is the economic potential of this strategy continues to rise.
Let me explain.
Real estate is a hyper-local business. This means sellers and buyers seek a REALTOR who knows their community or area they are considering for their purchase. This isn't anything new. But the change we are seeing is an increased desire for a specialist. The rising knowledge of the modern-day consumer mostly drives this.
Years ago, consumers depended on their agent to provide them with data, sold records, and needed the agent to explain every step of the process. With more information at the modern-day consumer's fingertips, they want more than just an agent with a license.
This isn't a concept to be feared. It's a tremendous advantage to both the consumer and the agent. The benefits to the consumer are evident, but for agents, it allows us to focus our efforts on strategy, positioning, and differentiating the listing.
A generalist who serves a large area (large city or city and surrounding area) simply can't know every pocket of these markets as well as a geo farming agent.
As such, geo farming is a strong point of differentiation.
And agents without differentiators are at a disadvantage in the modern world.
What is geo farming?
Geo farming is a real estate marketing strategy where agents focus their efforts on a particular area or neighborhood.
The agent choosing geographic farming as a strategy typically sends postcards to a set of homes in a neighborhood on a repeating cadence. The agent also attempts to be as visible as possible in the community by talking to neighbors, sponsoring events, hosting block parties, door-knocking, and staying involved in the community.
A common misconception about geo farming is it's solely delivering postcards intermittently to an area. This isn't geo farming. This is only one part of geo farming.
Geo farming agents will be as visible in the community. Both in person and digitally. For example, they will do the following:
Postcards and mailers
Sponsor events
Host events and block parties
Write various blogs and articles about the community
Use video and social media to target the neighborhood
Door knock the area
Reach out to local businesses in the area and collaborate
Spend time in the parks, popular spots, restaurants, and coffee shops
Geo farming is so much more than just sending mailers.
What Sellers Want
Geo farming presents sellers with a huge advantage. How so?
Well, this comes down to what sellers want and the fears going through their minds.
Source: Zillow
Research suggests that sellers want several things when selling, but the most important is finding interested buyers. It seems logical enough but let's go deeper into this.
Sellers wanting interested buyers is driven by two things:
Sellers want the most money for their home
Sellers want the least hassle when selling
After reviewing research from NAR, you'll see that this is the ultimate goal of a seller.
Now, who's more likely to help them achieve this result: a generalist or a specialist?
You don't want your general practitioner doing your open heart surgery; you want a heart surgeon. The thinking is the same.
On that note, it's helpful to understand the seller's greatest fears when preparing to list:
The home doesn't sell
The home sells for too little
Paying REALTOR too much
It's only sometimes the case that the area specialist will get you the highest price with the least hassle and ensure your house sells, but it's fair to assume the seller has more confidence in the specialist. After all, choosing the specialist doesn't guarantee anything, but it's certainly a vote of confidence.
Turnover Rate in Real Estate
The turnover rate in real estate is the number of homes that sell in 12 months divided by the total number of homes in the area. You'll then multiply this by 100 to arrive at a percentage.
Turnover Rate in Real Estate
This is one of the most important calculations you must understand when choosing a geo farm.
Logically, you'd want to seek areas with higher turnover rates (but it can be more complex). The following are generally accepted high/medium/low turnover rates.
Remember that every area, city, and community can differ slightly.
High Turnover Rate: More than 5%
Medium Turnover Rate: 3%-5%
Low Turnover Rate: Less than 3%
Here is more information on turnover rate.
One common mistake is immediately wanting to focus on high turnover rates.
High Turnover Rate:
More potential sales
Typically more farming agents to compete with
Usually lower lower-mid priced homes
Harder to break into (not always)
Low Turnover Rate:
Fewer potential sales
Typically fewer farming agents to compete with
Usually high-priced homes
Easier to break into (not always)
As such, both have economic potential, but you'll want to avoid an area with a low turnover rate and lots of farming agents or lower prices. This would be the weakest geo farm.
How To Choose A Geo Farm
The turnover rate is one the most valuable parts of your selection process, but there is more to the equation.
Suburbs or Downtown:
Suburbs and downtown are the best locations for a geo farm. People frequently move from the suburbs, given the commute time and lack of space. Also, these two areas often have new construction, so some sellers did not initially use an agent to buy.
@revrealestateschool Geo Farming Hack: Areas #realtortips ♬ original sound - Rev Real Estate (Realtor Tips)
Living There:
You don't need to live in the farm, but it helps. Alternatively, an adjacent community works. This is because you need to be visible in the community (parks, restaurants, coffee shops, etc.). That's not to say you can't accomplish this if you don't live near the community, but it adds friction. Another option? Choose a community you want to move to. You're likely to have the desire to be in the community consistently.
4-6% Turnover:
Too low, and the economic potential isn't there. Too high, and it's likely heavily farmed (but not necessarily). See the above section on turnover rate to explore this dynamic further.
500 Homes to Start:
This is a large enough number to get a few calls but not so large that it's unaffordable. This is a number that you could theoretically door knock and also isn't unaffordable if you are sending 12-24 mailers/year.
Check The Competition:
Simple metrics to follow
Does 1 agent have > 20% market share
Do 2-3 agents have > 50% market share
If so, then it's a less desirable farm. But don't write it off! Is the 1 agent likely to retire soon or has a poor reputation/marketing? If so, it could be an opportunity.
You can use the following calculation in order to ensure you select the right farm
Download the Geo Farming Calculator
What Is The Biggest Farming Mistake?
The agent quits too early. You should prepare for one year of marketing without revenue. This isn't always the case, but preparing for this will avoid you pulling the plug too early.
If concerned about the cost for a year or two, run the numbers on the commission you'd receive if you had 20-30% of the market share. It's not unreasonable to assume that with the above plan, you will have over 10% of the market share in 2 years and over 20% of the market share by years 4-5.
Stick with farming for the long term, and it pays off. Expect a result in 6 months, and you'll quit too early. This is a long-term approach that will benefit you for years to come.
Real Estate Farming Ideas
We've explored ideas throughout this post, and this section will summarize each concept. Additionally, we'll present more ideas to tailor your geo farming strategy to your market, personality, and style.
Postcards: General
These are a staple when starting a geo farm. You may not have new listings, sold listings, or buyers in the area, but you still want to get in front of people to build your brand.
General postcards serve two purposes, generating leads and building your brand. Both are equally important.
Content and Important Notes:
Sellers care most about getting the highest price with the least hassle. As such, tailor your messaging to this.
Provide value by displaying the current stats, sales, and market dynamics. You could also highlight a local business or family (both good ideas).
Ensure your face is on every postcard you create. You will be building your brand in the community, and people are drawn to marketing with faces. They tend to linger looking at the piece for longer and keep it for a few extra days.
You can deliver these by mail, by hand, or by door-knocking (see our door-knocking strategy)
Door Knocking: Do not try and convert! Instead, use this script: "[Knock] Hi there, I'm your neighbor in [community] - here is a market report. Have a great day!" As you do this month over month, conversations will naturally start to occur
Here’s an example (with a Christmas theme)
Postcards: Just Listed/Just Sold/I have a buyer
These are opportunities to let your farm know you're active in the community. Send out a postcard when you have a listing, sale, or buyer looking in the community. This builds your brand further and shows the community that you're transacting.
Don't worry about this strategy if you don't have a buyer or seller. It can take 6-12 months (at least) to see your first transaction. So, keep this one in your back pocket for when you have a client.
Note in most areas, you can promote your brokerage's listings. So, if you have colleagues with a listing, ask if you can pay and send out postcards. Some (not all) will enthusiastically say "yes."
Pro Tip: Struggling with design. Use Etsy (example below). They have tons of fantastic Canva templates.
Open Houses
Anytime your office has a listing in your farm, ask the listing agent to sit an abnormally high number of open houses. This is crucial.
We all know that neighbors comprise many of the attendees at open houses. You want to be the agent they are in contact with.
During these open houses, focus on the quality and length of conversation you're having with neighbors. Ask them how they like the community and what hot spots they go-to. Ask if they follow the real estate market.
Face-to-face interaction with a farm is a huge differentiator. Some prominent agents in your city may pay for billboards, commercials, and advertise like crazy online and with Zillow. Still, they can't have personal relationships with each person in your community.
If you're new to farming, this will force you to learn about the market and recent sales. You'll also gain a further understanding of the issues and changes in a community.
Previewing
Block out 1-2 hours weekly to preview new listings coming to the market. You should go through every home in your farm that comes to market. Take notes about the pros and cons. Make predictions on the valuation and when you see it selling.
Missing this is one of the biggest mistakes we see in farming. It may not seem important initially, but when you go to a listing appointment and tell the seller that you've actually walked through and have notes on every sale in the community, you put yourself miles ahead of your competition.
Also, when you do need to conduct a CMA for a seller or simply and owner, you'll be much more accurate with your pricing.
The Market
Know every sale price and the market dynamics in your farm. This is imperative for conversations with neighbors. Stats that you should be able to rattle off from memory:
Average, median, and benchmark sale price
Days on market
Average number of sales per month or quarter
Sold to new listing ratio
Months of inventory
Your prediction on the direction of the market
Upcoming future developments in the area (and how they will impact prices)
Quarterly Market Reports
Every quarter, consider sending out a more comprehensive report on what is happening in the real estate market. These are usually 8.5x11 brochures or oversized postcards.
These reports should have a paragraph on your assessment of the market. Also, you can display where the sales occurred and provide year-to-date statistics.
The branding should be perfectly aligned with your other marketing materials.
These are usually more expensive to print and mail but are of much higher value for the community. As such, many potential sellers will hold on to these for weeks.
Events and Sponsorships
Events are like throwing gasoline on your traditional geo farming fire. They are a multiplier. Think about the types of people who attend the events in your community — these are the social folks and the people with large networks. These events will expand your network quickly, and you'll be surprised how effectively they generate leads.
However, there is only one (very important) rule.
DON'T SELL AT THE EVENT - JUST TALK
These events should be no strings attached and purely for the guests' enjoyment. Talk to them about the community, their kids, and their hobbies and do not bring up real estate.
They will know you are hosting the event with the intention of building your reputation and business. Let this come naturally.
If you use these events as an opportunity to sell, you will repel guests from coming to future events.
Types of events:
Rent a food truck
Have a scavenger hunt at a playground
Rent out space at a local restaurant
Host a dog training session
Use seasons and holidays: photos with Santa, pumpkin giveaway, Valentine's day candy grams, summer BBQ, etc.
Also, others will be hosting events—for example, school events, sporting events, a parade of garage sales and others. Try to get involved and offer to sponsor if funds allow.
Email Newsletter
You should be publishing and circulating and email newsletter monthly to improve your brand throughout your community.
Now, if this will be a lot of work, there is a huge hack you can use.
Use the same newsletter that you would use for your database. If you send out a monthly newsletter to your database, use the same content but simply tweak the wording and stats to ensure it's focused on your community.
Work smarter. Not harder.
Social Media, Blogs, and Video
You want people in your community to see you as the resource for their area and there is no better way to do this than creating content about the community.
If you're concerned that this will alienate your clients in other communities, just be strategic about your approach. Create more content about your area than any other agent, but it doesn't need to be the main focus of your content strategy (unless farming is your main source of business).
When people type into Google
[Community] Events
[Community] Homes for sale
What it's like living in [Community]
Pros and cons of [Community]
Home prices in [Community]
Parks in [Community]
Schools in [Community]
Restaurants in [Community]
You should (eventually) show up. Yes, SEO and content creation takes time to rank, but it will pay off greatly in the future.
Business Collaboration
This is another common missed opportunity. Collaborating with local businesses allows you both to grow, and the business owner and community will see you as a local leader in the area.
There are various ways you can collaborate:
Highlight on social media
Write a blog or create a video highlighting the business
Pay for postcards to the community with exclusive discounts to their restaurant (this one works well with local businesses)
Offer free evaluations for their customers
The key is anything that provides them with value. It shouldn't be about you. As the captain of the collaboration, people will already see you as a leader.
Be Visible
Finally, you need to be visible in the community. If you solely hide behind postcards and your digital strategy, you're missing the main advantage of farming — being face-to-face.
There will always be teams that can outspend and out-postcard (if that's a word) a single agent or small team. So you need to do the things that they can't. This is personal relationships.
How do you do this?
Become a local at a restaurant, bar, or coffee shop
Support local businesses
Walk your dog in the area
Play with your kids at the park
Go to church in the community
Attend every event
Pro Tip: When walking, make eye contact (not in a creepy way) and say "hi." So much business starts with a casual "hello" in your farm.
Real Estate Farming Plan
Ok, so how can we put this all together? Well, we have you covered. If you're starting a farm, you can use this plan.
Note we will not include open houses, previewing, just listing/just sold, or being visible, as these depend on your timing and property availability.
January
Postcards
Quarterly Update Report
Blog post and video (business collaboration)
Newsletter
February
Postcards
Blog post and video (market-related)
Newsletter
March
Postcards
Invite to a spring block party with a food truck
Blog post and video (business collaboration)
Newsletter
April
Postcards
Quarterly Update Report
Spring block party with a food truck
Blog post and video (highlighting event)
Newsletter
May
Postcards
Blog post and video (market-related)
Newsletter
June
Postcards
Invite to summer BBQ with a dog trainer
Blog post and video (business collaboration)
Newsletter
July
Postcards
Quarterly Update Report
Summer BBQ with a dog trainer
Blog post and video (highlighting event)
Newsletter
August
Postcards
Blog post and video (market-related)
Newsletter
September
Postcards
Invite to free pumpkin giveaway
Blog post and video (business collaboration)
Newsletter
October
Postcards
Quarterly Update Report
Free pumpkin giveaway
Blog post and video (market-related)
Newsletter
November
Postcards
Blog post and video (market-related)
Newsletter
December
Postcards
Blog post and video (market-related)
Newsletter
How Much Does Geo Farming Cost
Geo farming budgets can vary depending on how you approach the strategy; however, there are some rules of thumb.
Most farms will be approximately $0.50-$1.25 per house per month. This is the number you should work from. If you host multiple events and use a mail delivery (vs) door knocking, prepare for the cost to be around $1.25. If you spend less on events and door-knocking instead of paying for mail delivery for your quarterly reports and postcards, you'll likely spend less than $0.50 per house per month.
Determine the best budget for you and be mindful of the economic potential. Based on your turnover rate, determine the annual income potential if you had 10% of the market share. With this strategy, you should be well on your way to this by the end of years 2-3.
Another common strategy is determining your GCI (gross commission income) based on a 10% market share. That will be your goal after year 2 of consistent farming. Then take 1/3 of that income and consider it your farming budget.
Conclusion
Geo farming is a proven strategy that will always remain in the prudent real estate agent's marketing strategy. It gives the consumer confidence that they are choosing an effective agent with market knowledge and experience. However, agents make various mistakes when farming: they choose the wrong farm, depend on postcards, and fail to build community and foster relationships in-person and digitally.
But most importantly, they quit too early. Stick with farming for 1-2 years before deciding it's not for you, and consider that almost all top producers have geo farms. This strategy really works.
Further Reading: