Six Important Elements of a Geo Farm

By: Sharran Srivatsaa

Geographic farming is a topic that is near and dear to my heart as it’s the pillar of every successful agent I know.

In fact, the number one question I get, no matter what the market conditions may be, is “How do you pick a geographic farm?”

Geographic farming creates a platform of possibilities, whether you are with your buyer in-person or answering a lead online. Why? Because you’ve gotten specific, you know the depth of your geographic farm, and you’ve determined why you’re the right person to work it.

The same farm is not right for everyone. Below are six elements that are key in choosing the right geographic farm for you.

If you already have one, I hope you use these six elements to ensure your farm is in order. If you don’t have one, I’d suggest breaking down these numbers so you can get an understanding of how adding the pillar of a geographic farm can transform the sustainability of your business over time.

#1 Everything is Based on the Total Available Market

We need to first focus on the total number of homes. If you are working with vertical living, this is defined as total number of units, as opposed to a traditional neighborhood, where this is defined as total number of homes.

#2 The Average Sales Price TREND

Focus on the average sales price trend, not the average sales price.

How will you know what this is? By using simple math!

Pick a three- to five-year window and see what the average sales price has been in the past 2,3, or 5 years. For example, if there are 452 homes in the neighborhood and the average sales price is $875,000 then the trend of price increase is 7% year over year in the past eight years.

Imagine using this information in a conversation with a buyer. This helps you frame your expertise in your farm.

#3 Average Days a Home is on the Market

Knowing how long a home is on the market is valuable information that can help you plan your business year. If statistically the average home is on the market for 30 days, that means you can close one home a month or average 11 to 12 per year.

#4 The Math

Figure out how many homes actually sell in any given neighborhood in your farm. Is it a neighborhood that actively turns? Maybe people love living there and there is very little movement? Knowing turnover is super important.

Let’s say there are 50 homes in a neighborhood and 5 sell every year. Turnover is 10%. However, as you farm the neighborhood, you have two sides to the transaction (velocity). If there’s a 10% unit turnover in a farm, I would double the number to 20% because you can also utilize velocity.

#5 Is there a dominant agent in the farm?

After scouring the California coast, which I feel is a good representative of the U.S., we found that if an agent has 10% or more of the market share, they become the dominant agent.

There are very few communities that actually have more than 10% market share. That means over 90% of the market is up for grabs and completely fragmented.

Find the dominant agents and look at how they got there? Are they active on Zillow, etc.? Do they have ads on Facebook? Are they doing the 365 degrees to ‘bear hug’ their geographic farm?

Understand them and emulate what you need to do.

#6 What is the accessibility of this farm?

Think about your potential farm. Does it have a strict HOA? Is it gated? These factors would deter you from ‘pounding the pavement’ or integrating yourself into the farm.

If you are evaluating two farms and they have the same numbers, the accessibility will be your deciding factor. You need easy access to your farm to create sweat equity opportunities, such as doorknocking, throwing parties, and more.

Note: If you do have access to a limited geographic farm, this is key. You may be the only agent that does and have less competition!

Once you’ve identified a fitting geographic farm, break down the above statistics and six steps to increase your marketing efforts and conversations with potential buyers. If you do not have a farm, utilize the six steps above to find the best one for you.

No matter what stage you are in your geographic farming process, utilizing these numbers in your scripts will show potential buyers how well you know the area and the industry and why you’re the advisor of choice to get them the results they’d like.

Sharran Srivatsaa is the CEO of Kingston Lane, a push-button technology execution platform for real estate. Most recently, Sharran grew Teles Properties by 10x in 5 years and led its acquisition to Douglas Elliman.

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