Farming Michael Devlin KW 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 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? Page 10 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 Page 13 Power Session 6

Myths about Farming Myth 2 Someone else already dominates the area. No one is ever as dominate as you think. Truth Page 14 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 Page 15 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 Page 16 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 Page 17 Power Session 6

Page 20 Selecting Your Farm Geographic Farm Power Session 6 10 Factors to Consider 1.Your Goals 2.Your Budget 3.Size 4.Location 5.Haven’t Mets vs. Mets 6.Average Sales Price 7.Turnover Rate 8.Market Conditions 9.Competition 10.Your Fit for the Farm

Page 21 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

Page 22 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

Page 23 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

Page 24 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

Page 25 Selecting Your Farm Power Session 6 Source: “2012 NAR Profile of Home Buyers and Sellers”

Page 26 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

Page 27 Selecting Your Farm Demographic and Psychographic Farms Power Session 6 10 Factors to Consider 1.Your Goals 2.Your Budget 3.Size 4.Accessibility 5.Haven’t Mets vs. Mets 6.Average Sales Price 7.Motivation 8.Current Trends 9.Competition 10.Your Fit for the Farm

Farm research 1.Select target farm area 2.Determine the total number of homes in this area 3.Average selling price 4.Number of properties transferred in the past year 5.Number of current listings 6.Analyze what number and percentage of listings sold by company and sales associate

Page 35 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 Page 39 Power Session 6

Page 40 Working Your Farm Establish Your Reputation First Reputation vs. Relationships Be sincere about who you are Power Session 6

Page 41 Working Your Farm Prospecting in Your Farm Relationship Farming Prospecting Based, Marketing Enhanced Power Session 6

Working Your Farm EXERCISE Geographic 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 Page 42 Power Session 6

Page 43 Working Your Farm Work Smarter, Not Harder Mary Harker: Find your “bird dogs.” Core Advocates who refer business. Power Session 6

Page 44 Working Your Farm Come from Contribution Have something of value to give. Meet people face-to-face. Power Session 6

Page 45 Working Your Farm Come from Contribution Create a directory. Organize a neighborhood yard sale. Start a website. Create an “list serve” group or blog. Power Session 6

Working Your Farm EXERCISE Low/No Cost Items for Giveaways Brainstorm low/no cost items to drop off. Time: 15 minutes Page 46 Power Session 6

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 Question How can you modify this for your niche? Page 47

Page 49 Working Your Farm Be Prepared Learn your scripts. Ask for referrals. Power Session 6

Working Your Farm EXERCISE 12 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? Page 50 Power Session 6

Page 51 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? Page 52 Power Session 6

Working Your Farm Question What are some actions you can take to make your 12 Direct plan more effective? Page 53 Power Session 6

Page 54 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? Page 54 Power Session 6

Page 55 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 Together Power Session 6 Page 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.