Real Estate Farming: The Ultimate Guide (2024)

Are you curious about Real estate farming but you don’t REALLY know what that means?

I had the opportunity to interview Meredith Fogle, the industry expert on positioning yourself within and nurturing a community to generate a TON of business as a Realtor. AKA… She’s the expert farmer!

So…

What is Real Estate Farming?

Real Estate Farming is a layered marketing strategy that involves postcards, door-knocking, presence within and giving back to the community, gaining expertise, and social media. One time per month, minimum, in front of people at scale whether it be hosting an event or at a community event. Most HOAs are too politicized to have a good avenue for agents. That’s not where you win a popularity contest. – Meredith Fogle

Meredith is the author of “Farming, for Real Estate Agents“. Here’s our interview with her on The Agent Goldmine.

How to Choose Your Real Estate Farm Area

Before you start any farming efforts, it would be worth your time to evaluate different areas. Why?

Imagine if you had 2 neighborhoods right next to each other.

Both neighborhoods have the same number of houses and sales activity on an annual basis.

• Neighborhood 1 has an average sale price of $425,000 which is a commission of around $12,750.

• Neighborhood 2 has an average sale price of $315,000 which is a commission of around $9,450.

That’s a 33% increase or a 25% decrease in commission, depending on how you look at it. Money isn’t the only factor to consider when choosing your real estate farming area. Let’s go through the decision-making process chronologically.

1. Consider your Physical Proximity

If I had to drive 45 minutes every time I needed to host an event or run an appointment, I would do my best to limit those trips. That extra time it takes to travel would eat whatever you thought you’d make in extra commission. Here’s what I suggest doing:

Make a list of all the neighborhoods close enough to you to farm.

Personally, I wouldn’t want to travel more than 15 minutes… But if you’re certain about moving to a new area within a couple of years, it would be wise to start farming that new area.

2. Challenge your limiting beliefs

While you’re looking at the neighborhoods within 15 minutes of you, don’t leave out any neighborhoods just because you feel like they’re out of your league or you don’t have the qualifications to sell there.

Why?

Let’s say you decide to farm a neighborhood right next to one that was ‘out of your league’… After a couple of years, you’ve built your real estate business to the point where you’re confident.

You find out houses are just concrete, wood, nails, paint, wires, tubes… and some other building materials.

You start kicking yourself for being scared of a particular neighborhood because the price was intimidating…

Now instead of having a foothold in an area where there are massive commissions, you have to restart in that area and will likely lose traction in an area you’ve already built your book of business in…

Keep in mind that if you lack faith in your ability to do it, don’t do it. Otherwise, you’ll start, not see results, and quit anyway.

3. Run the Numbers

Once you few neighborhoods picked out, it’s time to crunch some numbers. Those of you who are wondering, ‘what is the most profitable farm size?’…

The most profitable farm size is the area with the highest commission per house. To clarify, that doesn’t mean the highest commission per house sold…

Let’s break it down.

Here’s what you need for each area or neighborhood you are potentially farming.

• Total Homes

• Total Homes Sold in the Previous 12-month

• Average Commission per Sold Home

• Average Days on Market

The goal is to pick the neighborhoods with the highest commission per house in that neighborhood on an annual basis.

Why??

The goal of real estate farming should be to build relationships/trust with every household in the neighborhood. If you want to make the most money, it would be best to choose a neighborhood with the highest commission per household; NOT the highest commission per sale.

If the neighborhoods with high prices points are almost the same as the lower priced neighborhoods, I’d choose the high priced neighborhood because I like efficiency.

Farming is also focusing on getting listings which is extremely leveraged.

4. Check for Competition

Now that you have narrowed your list down to a few neighborhoods you wouldn’t mind working, the final step is potentially the most important…

Check the sold listings from the previous 12 months to see if a real estate agent is already dominating that farm area.

If that farm area is taken, I recommend eliminating that neighborhood and possibly even contacting that agent to see if there are any other areas you should avoid.

Based on your conversation with that agent, you can steer your real estate farming operation to either compete with that agent or set up in a different farm area.

5. How big should your real estate farm be?

This completely depends on your work ethic, how proficient you are as an agent, and the density of your farm.

If you live in suburbia, the average door knock will take 6 minutes per door depending on the size of your lots…

So if you choose to start with 500 houses, you’ll have to go door-knocking for roughly 3,000 minutes or 50 hours.

Considering that’s about 1-2 weeks of daily door-knocking… To meet the majority of your farm and collect contact info, that’s not so bad! Maybe you want to start with 500, then push to 1,000 houses once you get to the six-month mark, and then add even more after the next six months.

How to Start Real Estate Farming

Now that you have selected the farm area within your local real estate market, it’s time to develop your real estate farming strategy.

Most people think farming is just direct mail marketing consistently in a single area… This is a great geographic farming method, but that’s only one of the many marketing strategies to properly ‘plow’ a real estate farming area.

Since it’s so common, let’s talk about direct mail postcards first.

Bill says to use EDDM for Direct Mail

Bill Sohl is someone I talk about often. He spends around $300k on direct mail per year marketing to his farm area but pulls in over 7 figures in GCI from those marketing efforts. His farm area consists of about 40,000 homes…

NO, he doesn’t keep in touch with all 40,000 people…

But he does put forth a lot of effort within his local market. He sponsors his kids’ sports teams and does other awesome stuff within the community… But let’s stick to direct mail.

Bill recommends using Every Door Direct Mail (EDDM) through the United States Post Office (USPS). Using EDDM gets you a discounted rate for postage, and you don’t have to worry about managing thousands of addresses. Sending everyone a piece of mail is much easier.

It’s also a great tool to see how many people live in specific areas!

Keep in mind, Bill spends about $1 per piece of mail, and most agents would squirm at spending $40,000 with one drop of mail.

So, how can you spend less?

1. You can print the mail yourself. That way you just pay the postage fee of around $0.20/piece… But you will have to purchase high-quality paper ($0.01 each), a printer, and of course a bunch of ink. This should keep the cost below $0.30/each.

2. You can print your own postcards with VistaPrint and drop them at the post office using EDDM. This should keep costs below $0.50/each

3. Or, you can take the expensive route and purchase the mail from a mail house at around $1/each mailer.

Don’t even have the money for the first option?

If possible, go Door Knocking to Collect Contact Info

So, you don’t have the money for direct mail but need to get some business… Door knocking is a great way to get ‘belly to belly’ with people in the neighborhood. Some neighborhoods don’t allow this so know the local ordinances.

Now, most real estate agents will go in for the kill and ask if the homeowner is interested in selling the house… In my opinion, this isn’t the right strategy.

Should you ask if they’re considering selling in the next 12 months? Yes.

But you should expect a ‘NO’. The goal should be to collect their contact info so you can invite them to future events, give them valuable updates on the neighborhood, and follow up digitally.

Getting in front of people is great, but multiple times per month to ask if they want to sell their house is a bit annoying.

This is a time-consuming but cheap and highly effective lead-generation strategy.

Try Cold Calling if they don’t answer the Door

If that person isn’t home, there are a ton of different ways to look up their number online. FastPeopleSearch is actually REALLY good for being free.

I would recommend calling the homeowner and using this script:

“Hey {Homeowner’s name}! This is {Shelby}. I knocked on your door earlier but no one answered. Is now a bad time for a couple of questions?” wait for an answer

“1. Are you considering selling your house in the next 12 months?” wait for an answer…

“2. Can I share updates about the neighborhood and real estate market?” wait for an answer…

“3. Do you know anyone who may be interested in moving to the neighborhood or {city}?” wait for an answer…

You can also ask to follow them on social media and join your local Facebook Group. This will turn them from a cold lead to a neighbor and put you in a position of expertise.

James Patrick was an agent in Fayetteville from 2018-2022. He had a solid real estate farming area where he did door-knocking and cold calling. The screenshot in the first image is actually his ‘sold’ properties on Zillow.

Every time a property would be getting prepped to go on the market, he’d call all of his contacts in that area and tell them. He’d update them at these stages:

1. Once it hits the market

2. Open houses

3. Going under contract

4. After the inspections were completed

5. After closing

He’s got an incredible story about going from homeless to closing over 60 transactions within 2 years. You can check out the interview below.

Start a local community Facebook Group

This is a great way for you to engage with people within the community. A good friend of mine, Scott Moore, has a Facebook Group for all of Greensboro, NC. An area that big is going to be extremely difficult for the real estate farming game… But it’s extremely valuable.

Instead, start a neighborhood or ZIP code Facebook page. I just joined my local one in Lexington KY and they verified that I was the owner before letting me in.

That step is important because you don’t want to water down the efficacy of your group by letting in a bunch of random people.

Another useful step is to collect phone numbers and email addresses when they apply to be part of the group. In my opinion, this is a niche marketing strategy that most agents don’t take advantage of.

Host Community Events

This is why if I were restarting my real estate career, I’d do real estate farming.

I LOVE COMMUNITY EVENTS! Real estate agents don’t do enough of these.

Jason Boice, one of our real estate agents in CT, hosts previous client events. This year he did two events and he invited all of his past clients to the events. There was food, drinks, a DJ, and most importantly, a professional photographer.

If you hire a professional photographer and send awesome candid photos to the people who attend your event, they’re going to remember you. You’ll also likely be responsible for a bunch of social media profile pictures. If they remember you, hello referrals!

Although his event wasn’t open to the public, you could host an event and open it to the public. If it gets too big, team up with other local business owners to sponsor the event. This could lead to a TON of future business.

Note: It’s important to keep these events fun and appropriate for all ages.

Sponsor and Attend Local Events

Chances are, there are a ton of other local events going on. Hosting them all would be extremely exhausting and you wouldn’t be able to meet people since you’d be orchestrating.

To take some pressure off your shoulders, you can use money or food to contribute to the community. Whether this is at school fundraising events or informal events, sponsoring allows you to put your name out there as the go-to real estate agent for the community.

Even if you don’t or can’t sponsor local events, it’s worth it to go to them. I love meeting new people. If they happen to be my target audience… oops 🙂

Just kidding, that’s why geographic farming is my favorite strategy right now.

Host Open Houses

Open houses are old school, but it is an awesome real estate farming strategy. Here’s why:

1. You get to operate in your geographic area
2. It gives you a reason to reach out to potential clients in your farm area

Remember earlier when I said you can’t ask for business multiple times per month?

This is one of the scenarios where you can ask for business again.

“Do you know of anyone who may want to buy in the neighborhood?”

“Got it! Thanks anyway. What about y’all? Are you thinking of selling in the next 12 months?”

This shows you do the work it takes to sell a house, and you’ll do the same for them… Imagine making that call once per month, hosting a few events per year, and sponsoring the ‘upcoming events’ newsletter for your HOA… You could get in front of a ton of the right people!

PS – Do not participate in the HOA. It’s too polarizing.

Use and Refer other Local Businesses within your Farm Area

This is my favorite lead-generation strategy because I used it a TON. I love doing business with people who consistently provide adequate results. Unfortunately that’s harder to find than I imagined…

If you build a relationship with local business owners, sponsor and host events with them, and refer business to each other, it’s a beautiful synergy.

Don’t know any local business owners?

Use google maps on your phone to find businesses in your farm area.

My next-door neighbor is named Ted and he owns a carpet cleaning company.

I’ve spoken to him a few times and you better believe that if anyone needs their carpet cleaned, I’m going to refer Ted.

I’ve only lived in the neighborhood for a few weeks. Since Ted has been here for a long time, it will take some work for him to trust me. Plus, he probably refers business to another real estate agent at the moment.

I can beat that other real estate agent by providing so much value to Ted that he has no other option than to start referring me to people he knows.

This can be done with reviews, referrals, and being awesome every time we interact.

You can do this with attorneys, insurance people, lenders, contractors, and any business with a good reputation that operates in your local area.

Social Media Local Expert Pages

In addition to starting a niche Facebook Group, creating different social media pages is a great way to provide value to those in the community. While a Facebook Group is more of a digital community where everyone shares, social media is more for consumption so you are responsible for producing.

Social media pages are for you to share local news, market updates, and other information that people may find interesting about the area.

I love the ‘things to do in {city} pages’.

I realize this is not necessarily your farm area, but it’s the same amount of work for a much, much larger audience. You can post local amenities and restaurants, and create built-in expertise about the entire market in general.

The goal with a page like this is to provide consistent value to people in the area, and subtly drop in the fact you’re a realtor. Chances are a bunch of people looking for ‘things to do in {city}’ are also potential clients.

Once your Facebook Group is looking plump, you can share a popular post from your ‘things to do in {city}’ in that group to get more of your target audience’s attention.

Final Thoughts on Geographic Real Estate Farming

Real estate farming is an excellent way to dominate a geographic area. It allows you to build stronger relationships within the community and become a leader.

After interviewing Meredith Fogle, I have concluded that farming is a highly effective marketing strategy agents should do.

So, do you want to become the go to agent in your community?

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