farming michael devlin kw silicon valley. earning potential assume a home sale of $600,000 with 2.5%...
TRANSCRIPT
Farming
Michael DevlinKW 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.• 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
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
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.
What Is Farming?
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Power Session 6
Myths about Farming
Myth 1
Farming takes too long and costs too much.
Farming can become the core of your business.
Truth
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Power Session 6
Myths about Farming
Myth 2
Someone else already dominates the area.
No one is ever as dominate as you think.
Truth
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Power Session 6
Myths about Farming
Myth 3
A farm limits you to that area or specialty.
A farm does not have to be your only source of business.
Truth
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Power Session 6
Myths about Farming
Myth 4
It’s all about mailers and mass marketing.
It’s the synergistic impact of both marketing and prospecting.
Truth
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Power Session 6
Myths about Farming
Myth 5
You can stop and start your farming efforts.
You must pursue your farm consistently and persistently.
Truth
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Power Session 6
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Selecting Your Farm
Geographic Farm
Power Session 6
10 Factors to Consider
1. Your Goals2. Your Budget3. Size4. Location5. Haven’t Mets vs. Mets
6. Average Sales Price7. Turnover Rate8. Market Conditions9. Competition10.Your Fit for the Farm
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Selecting Your Farm
• Your Goals– Market Share– Gross Closed Income– Number of closed transactions
• Your Budget– Time– Money
Prospecting Based, Marketing Enhanced
Power Session 6
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Selecting Your Farm
3. Size of Geographic Farm– Option to start small– Grow to adjacent streets or neighborhoods– Easier to meet everyone
Power Session 6
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Selecting Your Farm
4. Location of Farm– Accessibility– Existing geographic boundaries– Kind of homes– Desirability
5. Number of Haven’t Mets vs. Mets
Power Session 6
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Selecting Your Farm
6. Average Sales Price– Will this support your goals?
7. Turnover Rate– National Average is 16.6 percent– Target a farm of at least 10 percent
Power Session 6
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Selecting Your FarmPower Session 6
Source: “2012 NAR Profile of Home Buyers and Sellers”
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Selecting Your Farm
8. Other Market Conditions– Days on market– Expired listings
9. Competition– Market Share vs. Mind Share
10. Your Fit for the Farm– Can I relate and fit in with them?
Power Session 6
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Selecting Your Farm
Demographic and Psychographic Farms
Power Session 6
10 Factors to Consider
1. Your Goals2. Your Budget3. Size4. Accessibility5. Haven’t Mets vs. Mets
6. Average Sales Price7. Motivation8. Current Trends9. Competition10.Your Fit for the Farm
Farm research
1. Select target farm area2. Determine the total number of homes in this
area3. Average selling price4. Number of properties transferred in the past
year5. Number of current listings6. Analyze what number and percentage of
listings sold by company and sales associate
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Selecting Your Farm
Defining Your Identity and Positioning• Personality• Fit• Image• Values• Interests• Lifestyle
Power Session 6
Working Your Farm
Myth
I don’t have the money to lead generate.
Lead generation doesn’t have to cost money.
Truth
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Power Session 6
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Working Your Farm
Establish Your Reputation First• Reputation vs. Relationships• Be sincere about who you are
Power Session 6
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Working Your Farm
Prospecting in Your Farm• Relationship Farming• Prospecting Based, Marketing Enhanced
Power Session 6
Working Your Farm
EXERCISEGeographic 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
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Power Session 6
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Working Your Farm
Work Smarter, Not Harder
Mary Harker:• Find your “bird dogs.”• Core Advocates who refer business.
Power Session 6
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Working Your Farm
Come from Contribution• Have something of value to give.• Meet people face-to-face.
Power Session 6
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Working Your Farm
Come from Contribution• Create a directory.• Organize a neighborhood yard sale.• Start a website.• Create an email “list serve” group or blog.
Power Session 6
Working Your Farm
EXERCISELow/No Cost Items for Giveaways
Brainstorm low/no cost items to drop off.
Time: 15 minutes
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Working Your Farm
• Average List/Sale Price
• Sales to List Price Ratio
• Average Days on Market
• Current Inventory• Number of Expireds
Power Session 6
Housing Update Newsletter
QuestionHow can you modify this for your
niche?
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Working Your Farm
Be Prepared• Learn your scripts.• Ask for referrals.
Power Session 6
Working Your Farm
EXERCISE12 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?
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Power Session 6
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Working Your a Farm
Create a mini-farm–with a call to action!
Power Session 6
Working Your Farm
Question
What are 12 items that you might send as part of your 12 Direct plan?
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Power Session 6
Working Your Farm
Question
What are some actions you can take to make your 12 Direct plan more effective?
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Power Session 6
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Working Your Farm
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.
Power Session 6
Working Your Farm
Question
What are some services you could offer to establish yourself as the expert?
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Power Session 6
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Working Your Farm
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
Power Session 6
Do you consider a different farm area all
together?
Putting It All TogetherPower Session 6
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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).
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.
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.