But there are advantages to working one neighbourhood – especially one you live in. Obviously you are familiar with it. People see you out and about (maybe with your dog) so there may be some recognition that way. You go to the local stores and, of course, you tour properties in the vicinity to gain expert knowledge.
Your geographic farm is only as big as you determine, but the realities are that the bigger the area, the more expensive it is to farm it and promote it. I like to tell new agents that you should target one or two buildings or about 500 homes before taking on more. So, last week we did a little noodling in our office about just how expensive farming can be. We outlined the action and the cost associated with it. Here’s what we came up with.
As you can see there is a healthy mix of the good old tried-and-true techniques that I believe should not be disqualified. They still work and provide the public with name recognition. They include newsletters, flyers, local paper ads, door-knocking, and cold-calling. Add to the mix some newer ideas – such as joining local business improvement associations (BIAs) and neighbourhood committees, holding buyer or seller seminars, and sponsoring kids’ teams, for example – and you have the making of a fairly substantial marketing program.
On top of those more traditional approaches, social media has given the savvy agent even more tools. Agents are creating neighbourhood channels, websites and Facebook groups in an effort to speak with authority about what’s happening in the area. They are using videos to promote local attractions and businesses and are tweeting out the latest gossip. They aren’t mentioning that they are Realtors right away, though. It’s a round-about marketing technique that aims at gaining trust before asking for the business. It’s about proving to buyers and sellers that you are more dialed-in to the nuances of the neighbourhood than the next guy.
You do all these things are for the sole purpose of networking (prospecting in real estate parlance). For the most part, these are the things that take more time than money, but when you are starting off, you’ve got nothing but time.
Add it up and you have an idea on what it’s all going to cost you: about $20,000 per year. That falls in line with our company’s belief in spending about 10 per cent of your earnings on marketing. The cost associated with the actions we came up with were based on actual costs that agents in my office spent, and we tried to limit the size of the farm area to 1,000 doors. Obviously there are some economies of scale in farming. For example, the cost to produce a video isn’t going to change depending on the size of your farm, but the cost of gifts, newsletters and flyers will.
There is one other factor to consider and that is location. A billboard in Rosedale, one of Toronto’s most affluent neighbourhoods, is going to cost a lot more than one in Kingston. Don’t let these numbers scare you. In a perfect world, you would accomplish all this and more. For now, though, it’s important to recognize that one of the best things you can do is get out there and shake some hands. That’s the most cost-effective farming you can do!
Is there any downside to geographic farming? Sure. A client you’ve taken out a bunch of times decides to look across town and, thinking that you don’t know anything about it, hires another agent. The best defense is a good offence, so while you are out, let the clients know that you are familiar with all the neighbourhoods of the city.
Most books you read out there will tell you that you need to farm a neighbourhood. I’m not saying that rule is written in stone because, in this day and age, you can prospect from your social groups or by targeting a particular age or demographic through tools like Facebook.