The goal of FARMing is to build a database of contacts in addition to your sphere of influence, and to be recognizable in your chosen neighborhood of influence.
To make a living over the long-term, many contacts — some old, mostly new — are required. This can be fully accomplished within two years through dedicated, consistent FARMing.
Step 1: Find a mentor
Before you begin FARMing on your own, gain some first-hand experience. Team up with an experienced agent who is a long-time FARMer. Observe the agent’s strategies and scripts. Ask questions. Likely, they will be happy to show you the ropes.
Step 2: Choose your FARM
Choose the neighborhood or community you will FARM. The first choice is one you know very well already. Acquire a map of the area, and choose your boundaries and route. City planning departments are most helpful with maps and property information.
How do you decide on appropriate FARMing boundaries? Write up a FARMing goal, based on:
- how many deals you need to make in a year to meet your financial goals; and
- how many doors you can realistically knock on per day.
To determine how many deals you need to close to make a living each year, compile a detailed list of financial needs, called an income data sheet. [See first tuesday Form 504]
The fee you receive per transaction will vary based on the area you FARM. If you live in a neighborhood with little turnaround or low-tier home prices, consider commuting to a more profitable center.
Start off by knocking on 50 doors a day. Don’t worry: usually only 20 homeowners out of 50 actually answer the door. This means you will likely be at it for two hours at most and make 20 contacts. If you need to close more than 20 transactions each year then up the door knocking. This works out to 2,000 homes in your FARM if you keep this up for 5 days a week, and follow up every 2 months.
Once you are familiar with your chosen FARM, catalog the status of individual properties on a spreadsheet (distressed appearance, negative equity, positive equity, free and clear, length of ownership, price paid, etc.). This knowledge enables you to adjust your marketing strategy for each class of home.
Step 3: Prepare a script
As a new FARMer, you will want to use a script. An effective script includes:
- a proper greeting;
- a brief introduction of yourself and your business;
- opening questions for the potential client;
- answers to their common questions; and
- a closing.
If the homeowner is interested in selling, be prepared to write up a contract, or set an appointment to meet. Most importantly, listen to the homeowner. Don’t get caught up in the script to the point of reciting.
Devote time to practicing your script every day. This will allow you to internalize the script and make it your own, keeping your content from becoming stale and irrelevant.
Step 4: Craft your FARM materials
Make up a flyer appropriate to your area so homeowners will have something by which to remember you. The best flyer will brag about your recent sales. If you haven’t yet closed your first sale, or if it was more than a few months ago, consider these alternatives:
- sales made within your office;
- local market activity; or
- various tips for homeowners.
Each time you make a contact, harvest their email address. Also, ask for the names and emails of people they know who are interested in buying or selling. Once you have garnered a few contacts, set up an e-mail database. Then, e-mail a drip letter once a month. This e-mail newsletter can contain your recent sales, local market activity or an adapted FARM letter.
Depending on the types of handouts and mailings you send out, expect to spend $3,000 – $6,000 a year. Don’t let this amount daunt you — one deal will make up for the investment.
first tuesday has a wide collection of personalized FARM letters tailored specifically for California residents. These brief letters are free to students and readers with a journal subscription. Also, consider forwarding online articles you have read to selected individuals, to show that you keep yourself technically informed.
FARMing past clients
FARMing is not only about making new contacts. It’s about maintaining relationships with those contacts over the years.
Keep in touch with your past clients. They are your best source of business. Make a database of past clients with their particular holidays, such as birthdays and anniversaries. Send cards on these special days. Consider sending a bulk email to past clients each time you close a listing.
The key to FARMing success is…
- Consistency: It will take 3-5 years before FARMing will begin to pay off with a steady stream of clients. Consider each door knock an investment in your future career. In the meantime, you are always prospecting.
- Persistence: Explore all possible leads. After each conversation, always ask if the homeowner knows of any neighbors or friends who are considering buying or selling, and get their name. If a good lead does not answer the door during the week, go back on the weekend.
- Commitment: If you give a 50% effort, you will get a 50% return on your time spent.
Make a schedule for your FARMing activities and stick to it. Many agents go into the real estate industry expecting a relaxed schedule and easy money. Agents who do not quickly revise their expectations will soon find themselves making a career change.