Real Estate Farming for Agents Spend your money wisely! Choose your area carefully. Those are my suggestions. Don’t put a map on a wall and throw a dart at it. And, don’t look at that executive neighborhood with 50 or 60 $800k homes and let your ego control your choice of where to farm. Knowledge is power in real estate. Pick an area you know and understand and can even be passionate about. How about where you grew up? Or where you live now? Or a neighborhood or small town that you dream of living in so bad that you look at the market there 3 or 4 times a day. I chose where I grew up. Filled with great memories, its wonderful small town and I know every street and nuance of the city. When I talk about it I find myself getting naturally excited and it’s contagious. I chose an area that can be very active. $150k to $300k homes. Maybe that seems too low for you. But the sellers are probably moving up, and many buyers are first time buyers and if you nurture your past clients they will contact you in 5 years for a bigger home. I limit my farm to 300 to 400 homes. That is manageable financially. I set myself up a market search so every day I can watch any activity in my farm and study it so values, sales, and streets will roll off my tongue if I get a call. I get to know the area, shopping, parks, rec center costs, services, highway access. When I get a call from a possible listing, they will not find a more knowledgeable, excited cheerleader for their town and home. How do I get the calls? Consistent, basic marketing. Everything I do is branding me. Homeowners will get tired of seeing me. They will know I am their neighborhood Realtor. Almost all will be direct mailings, starting with an intro letter that lets them know that no one knows and cares about their neighborhood more than me. Once you’re established, yard signs will reinforce everything you do. Consistency is the key, at least once maybe twice a month with postcards. You should be able to pinpoint your area with a mapping function in your marketing system. Then except for a few holiday cards [4th of July, memorial day etc.] pound out the just sold. Every card needs a picture of the house that sold. Lead with “I just sold in 2 days”, or if you didn’t sell it put “just sold in 5 days”. Put the address and the price, below the pic, write” if you want more info on this home or values in your neighborhood call me anytime” [people are always nosy about their neighborhood]. On the back of the card make sure your smiling picture is large and apparent. You want to appear identifiable, casual and friendly. Under your pic, write” I am the expert in your neighborhood!” And make sure you are. Add the line,” if you or anyone you know is thinking about buying or selling a home, please contact me”. Have your cell# and your email in large print. Answer your phone if it rings!!!! When you do answer the phone, and it is someone from your farm, be prepared, know what just sold in that area, know if the just sold was 3 or 4 bedroom, how many baths , did it have granite or finished basement. Knowledge is power. If that info flows off your tongue, you will have a new client and a listing.
The extraordinary importance of your data base! When I first started in Real Estate after 30 years in the Automotive business, I started on a team. The team leader constantly reminded me to organize and keep a solid list of Past and Present Clients and a “Sphere of Influence”. He insisted all agents on his team pick 5 people from that list every day and call them. Not to sell them anything, but just to say hi, see how they are doing and remind them if they ever need Real Estate help, you are there. I asked him if anyone does that on a regular basis. He answered rarely, but if you do, you will be nurturing your largest source of referrals and repeat business you will ever have. And in time, it will give you the most profitable and easiest source of real estate business you will ever have. Fast forward 13 years and I have a small team in an average Midwest market turning 100 to 120 homes a year, $30mill in sales and people ask me what are my secrets. Well, I tried the Thousands of dollars a month on lead generators, knowing closing ratio on those leads is about 3% and the cost per sale is high. I knocked on doors, hung flyers, farmed with postcards, and basically spent a lot of money. During that time I kept up my data base and did the minimum to keep in touch [ Holiday Cards , Birthday cards, newsletter ] , now I don’t spend marketing money except for on my database, and I simply put my feet up on the desk and stare at my phone! And it rings with referrals and repeat business from my data base! It never stops, one client has sent me 13 referrals that have closed. So you think I must have thousands in my data base! No, 230. But they are a quality 230. Its not quantity, IT IS quality. Make sure your data base is people you actually know and have had contact with. Friends and relatives [sphere of influence], past and current clients, the person who grooms your dog, changes your oil or provides any service. How about your kids coach or parents from their sports team, people in your HOA, on your bowling team, the ones you see at the gym, the regulars at the bar [ I wouldn’t know any, just threw that in there], how about someone you met at an open house and talked to. The bottom line is referrals that emanate from this group, costs almost nothing and have a 73% close rate. Add to that the ease and fun of working with someone who already trusts you, because they have met you, used you before or were referred by someone who knows and trusts you. It is the best business in the industry. But I am too lazy to keep in touch! Believe me; it’s easier than chasing down Zillow leads. It has to be consistent, it never stops, and you constantly add new people. And you always have a call to action, for example: “If you know of anyone buying or selling a home have them give me Call”. If you are too disorganized to do this, there are programs out there to do it for you, look in to “Constant Contact “ or “Salez Storm” they give you everything from mass e-mails to mass texting to mass voice mail, to e-cards and newsletters. It’s far less expensive and far more profitable than trolling for leads. Your data base is the most important part of your business. It’s easy, fun and will make you more money than you could ever imagine.
The Art of the Home Inspection The Home inspection has become the focal point of a Home purchase. People don’t realize that it was not too long ago that home inspections were the exception, not the rule. But hidden defects, disclosure abuses and the slow erosion of home repair skills in the general public have brought inspections to the forefront of importance in a home purchase. How as an agent representing the buyer do you approach the home inspection? As in the rest of the purchase process your job is to educate, inform and protect your buyer. That means you must make sure you buyer understands the scope of a home inspection, the time frame and the consequence of choices made in deciding which defects are negotiated with the seller. First an agent must temper the expectations of the buyer. Do not allow the buyer to expect the home inspection to be a tool to renegotiate a home sale price down to a lower price you were not able to reach on the initial purchase negotiation. This is not the purpose of the inspection. The inspection should be a tool to find any defects not apparent and not disclosed that may keep your buyer from moving forward with the purchase. It will be a discussion between you and the buyer to determine if any found defects are ones you would present to the sellers as their responsibility to address. The inspector should not inject his opinion in the matter. He simply should point out and explain any found defects. The inspector should explain normal maintenance, age acceptable issues [some older construction methods are grandfathered in to code] and make it apparent what is an actual defect or failure. You as an agent should follow the inspector for the entire inspection; you should encourage the buyer to do so also. Ask questions, make sure answers are clear. Make sure your inspector issues a report with digital color photos clearly showing and explaining any defects. If the inspector does not, find another inspector. By following the inspector around, asking questions, having the inspector explain clearly to you and the buyer, you will be prepared to negotiate any issues with the sellers’ agent. If you don’t attend, if you send an assistant to represent you at the inspection, then you are doing your buyer a disservice. Eventually as your business increases and you have attended multiple inspections, you should start to understands all the nuances of a home and be able to spot defects prior to the inspection. At a minimum, this will eventually give you the ability to set your buyers expectations prior to the inspection. If you want to become extremely efficient, take a home inspection course at your local community college, this will help you head off issues or prep a client about potential issues when showing homes. The inspection is done and both you and your client have reviewed it. In reality, if you did your job properly, followed the inspector around with your client, asked questions and had the inspector explain everything to you and your client, then your client should be well aware of all the issues and the actual report would be something you only need to verify everything to the seller. Also when you write your initial offer/contract, make sure you have asked for “Other “ inspections and explain that would be “ Any inspection recommended as a result of the general Home inspection”. This will give you the ability to call upon experts in certain areas [ mold, pest , foundation] that your inspector recommend to follow up on a situation he has discovered but only has a general knowledge about. Again, educate your client, you are opening another negation which could result in the seller threatening to cancel the contract. Make sure buyer knows all potential results, for example, seller may do nothing, may offer money towards closing costs or price reduction to cover repairs, or may offer to repair the issues. You as the buyer agents have to gain enough knowledge of the type of repairs to coach your buyer on the seriousness of the issues or are they simply “Nickle and Dime repairs.” We have now identified all issues, discussed with the buyer to identify all legitimate concerns. We have talked to experts or contractors in those areas and understand if they can be repaired, and what approximate costs are. You are ready to negotiate with the seller. That process is an entire article in itself and we will address it in our next blog. Stay tuned.
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