You HAVE To Fish in a STOCKED POND
Most agents destroy their chances of success when farming before they even begin because they select the WRONG TARGET FARM (market area). The first “secret” to farming successfully is to select the right market. You never want to “mass farm” because you simply don’t have the time and money to get any market penetration that way. You want carefully selected “target farm” areas of about 300 to 750 homes (each market), and a plan to dominate the area with continuous, value-oriented contact.
Would you rather go fishing in a pond with a few dozen fish, or a pond with a few hundred…or thousands? The answer is obvious: the more fish, the greater your odds of having fish for dinner. The same is true with target-farming…
I frequently ask agents how they selected their farm area, and they’ll tell me something like, “oh, it just seemed to be a good area,” or “I live there,” or “it’s conveniently located between work and home.” WRONG ANSWER! Most agents don’t have any strategy behind their decision, so most of the time they select the wrong area(s) – doomed up front.
The first “secret” to farming successfully is to select the right market. You never want to “mass farm” because you simply don’t have the resources of time and money to get any market penetration that way. You want carefully “target-farm” areas of about 300 to 750 homes (each market), and plan on dominating the area with continuous, value-oriented contact. So BEFORE you spend a nickel on farming, we need to select a target…a HIGH POTENTIAL TARGET FARM.
What should you look for in selecting a good target farm?
All you need is access to your local MLS system. Review these 3 items for the areas you’re considering:
- The Gross Profit Potential Of The Market You Selected;
- The Earnings Potential Of The Market, (Vs. Other Markets)
- How Much YOU Can Expect To Make By Selecting That Market
If you’re willing to go through this analysis comparing various markets in your area, you’ll notice a few of them will STAND OUT and identify themselves as higher potential markets. Those are the markets you want to pursue. Here are a few quick tips to think about:
- Market size should be no less than 300 homes, yet not more than 750 or so.
- The greater the current number of homes for sale, the better.
- The higher the % of total market sold in a year, the better – to a point. Some markets may be bad because the homes are poor – can open you up to other problems when selling them.
- Check the trends…you preferably want increasing activity from the prior year or two.
- The fewer # of agents in the market, the better – given enough activity.
- The fewer number of dominant agents in area (market share less than 15% of area), the better. This number is calculated by taking the total number of homes sold by each listing agent, and dividing it by the total homes sold in your target market).
Here’s a free Market Profitability Analysis worksheet you can use to help you decide on your target farm area- just click this link to download.