Here is the next post in the series of You Reap What You Sow - How To Earn Six Figures Starting Without a Dime. Thank you for your patience! Allow me to preface this post that I felt it important to establish the end benefit of following this program. Realize that this all comes only from my personal experience and I am enjoying translating that experience to others. I knwo that I had promised to post How to Support Yourself While Supporting Your Farm but I thought this was more appropriate to be in advance of that posting.
REMINDER: The results I provide in this series all started without any large investment of money. I did invest time because I had no money when I started. I believ anyone in any market can do the same.
Part Two in a Ten Part Series
I apologize for being late on this post but I have actually been too busy to write! Now that those issues are out of the way, let's get back to earning some money! Hopefully you have completed the "homework" portion of my previous post You Reap What You Sow or How To Earn Six Figures Starting Without a Dime. If not, the now would be the opportunity to review that information. As stated in the previous post, I am completing the same steps as you so we can build on this together. If you experience any changes to your business with the information provided, good or bad, I would love to hear from you. We can all benefit from our experiences together and some of you may have improvements or more efficient methods that would help this program.
If you have completed your homework, you have made a determination of the 3 to 5 market areas that you targeted as viable farm areas. Remember, these areas must provide no less than a 5% turn over and ideally a 7% or better turn over. You can if you are so inclined, reduce this down to a street level and choose only those 500 homes that provide this turn over. In some markets you may have one portion of a subdivision or neighborhood that have that turn over but not other portions.
There is a gated master planned community in my market where out of 9 sub-communities only 2 have this turn over. So, if I were to market the entire master community, I would be wasting my time or money when it could be better spent working on just those 2 sub-communities and focusing on other market areas outside the master with the higher turn over.
Let me state again: YOUR CHOICE OF FARM AREA IS CRITICAL AND RESEARCH CANNOT BE DISREGARDED! You must take the time to determine the right areas to work in or you will become frustrated and broke and eventually give up. If you skip the step in my previous post, you will not succeed. You may luck out for a while but eventually it will catch up with you.
Information is Good but Personal Knowledge is POWER!
Let's see what happens when Agent Jones and Agent Smith are competing for the same listing in the same farm area. At the end of the story, determine who has the upper hand and will most likely get the listing without discounting the commission and with the seller's full support of the pricing as determined by each agent.
Early on Friday morning Agent Jones receives a phones call from Mr. Seller. Mr. Seller says to Agent Jones, "I am thinking about selling my house and I am contacting you because I received your postcard that says you sell all the houses in town. What will you do to sell my house?" Agent Jones ecstatic that she has received a call from her farming postcards jumps right in and starts asking about the house, why the seller wants to sell, what features does it have, how long have they lived there, where are they moving, when do they want to move and so forth, we all know the drill.
Mr. Seller eventually relents and sets a appointment with Agent Jones to come by and give them a presentation. Agent Jones is prepared to WOW Mr. and Mrs. Seller with her arsenal of marketing paraphernalia to overwhelm Mr. and Mrs. Seller with her Internet savvy and glossy magazine ads and newspaper ad featuring her photos prominently displayed on the top of the ad (the photo hasn't been updated in 15 years but, what the heck right?) She proudly tells Mr. and Mrs. Seller that she will display their property right in the ad with about 11 or 15 other homes she is trying to sell.
Mr. and Mrs. Seller ask what Agent Jones thinks their house is worth. Agent Jones whips out her color charts and ring bound CMA showing the sales and non-sales and says with determination what she believe the value of that home is worth. Mr. and Mrs. Seller thank her for her time and say they will think about it and get back to her. Agent Jones is stunned! She doesn't understand why the Sellers won't sign a listing tonight? She quickly recovers by saying that maybe she could get more for the house or maybe she could cut her commission, would that make them list tonight?...No, no...Mr. and Mrs. Seller thank her again and nicely tell Agent Jones that they have another agent coming over that they want to interview as well.
Who could this agent be? How could they tramp on her territory? She has been sending postcards in to this neighborhood for 3 years! How dare they speak with another agent? Don't they know who she is? Don't they know that Agent Jones lists more homes than any other agent in the county?
While it may be true that Agent Jones may list more homes in the county, she doesn't do that in this neighborhood. There is another agent that lists and sells more homes than Agent Jones in THIS neighborhood and that agent is Agent Smith! Agent Smith? Who is Agent Smith? Agent Jones has never heard of this person and how could they want to speak with Agent Smith when she has ads on every bus bench from here to the county line?
Mr. Seller unbeknownst to Agent Jones also called Agent Smith because Agent Smith also farms the area where Mr. Seller lives but Agent Smith has a different method of farming. Agent Smith develops profiles of each home in her farm area. You see sometime back Agent Smith was just getting started in real estate and she had little or no money and did not know anyone in the area. She had no family, friends, high school buddies, college roomies or the like to develop a "warm" list. So, Agent Smith had to come up with another way to make this new real estate business work.
Agent Smith did her homework, she researched her area a determined where the best turn over of homes occurred, she then set out to learn everything she could about each of these homes. She chose 500 homes in 3 different communities that she determined had a 7% turn over ratio over the last 18 months. Then she printed out the tax data for each of those homes and put them in a three ring binder. Each day, Monday through Friday Agent Smith started her day by learning as much as she could about those homes. She blocked out 2 hours each morning to drive her farm and chose 25 homes from which to learn about.
She took photos of those homes. Asked the lawn care companies, the mail person, and the utility workers and yes even the garbage men about what they knew about those homes. She noted on the back of each tax data sheet everything she could find out. What color of the home was, how many people lived in that home, did it have anything that might tell her something about the people that lived in that house, what kind of cars were in the driveway, did it have a converted garage, did they have any decorations that indicated the owner liked a sports team, what holidays did they decorate the house for, what kind of trees were on that property, are there kids living there, what ages, what sports or activities did they like and so on.
She introduced herself to people in the neighborhood when she saw them outside and made mental notes to add to her binder about what she found out about those people. If there was a garage sale in the area, she went to it and maybe bought a couple of knick knacks. She offered to provide garage sale signs if she found out they were planning a sale. Agent Smith knew that garage sales may indicate the owner might be clearing out the home to get it ready to sell and if not she knew people in the area would come by the home and she would be able to meet them.
Agent Smith became the neighborhood expert by giving home owners free market reports that she would keep in the car and update once a month. She didn't mail them, she handed them out personally. She offered free home valuations, tips and advice about curb appeal, helped the older couple on the corner with unloading the groceries. Yes Agent Smith had become a fixture of the neighborhood and she did it 25 homes at a time each morning. That meant that at the end of the week, she learned about 125 homes and at the end of the month she had learned information about 500 homes.
Then, when Mr. Seller called Agent Smith to talk about selling his home, Agent Smith answered with "Oh Hi Mr. Seller, how are you? How did your son do in his baseball game? And, how lovely your roses look this year you must be very proud." Mr. Seller was pleasantly surprised when Agent Smith knew he had the house on the corner with the blue roof, the pink garage door and the roses growing along the side of the garage. He also realized after speaking with Agent Jones that there Agent Jones had no clue about his home or the neighborhood. Mr. Seller promptly listed his home with Agent Smith for a lower asking price than Agent Jones offered. The house sold after just one open house (more on that in the next posting) and the happy Mr. and Mrs. Seller told all their friends in the neighborhood about the great experience they had with Agent Smith.
What Agent Smith did not know was the Mr. Seller was a retired real estate broker himself! After the closing Mr. Seller wrote a great letter about Agent Smith that went like this:
"Agent Smith listed our home for sale and also brought in the buyer in less than 2 weeks! Mr. Seller is a former Realtor and you are the first Realtor to meet the standards that he feels ALL Realtors should meet. We like that you did everything you promised and then some with a professional, courteous and pleasant attitude. We have absolutely no complaints!! Just keep up your high standards."
Mr. and Mrs. Seller
Agent Smith was proud! Agent Smith did a few more things and in just 6 months, Agent Smith had become the "expert" of her farm. What the home owners in that farm didn't know was that Agent Smith lived 30 minutes away in another town but they were none the wiser because all they knew was that Agent Smith could be counted on to be there, every morning and in every way she could. In just 6 months
Agent Smith listed and sold 17 homes in that 6 months, more homes than she could handle and had to hire an assistant to help with the work load. Agent Smith accomplished this WITHOUT mailing a single postcard, calendar, refrigerator magnet and without a single ad. Agent Smith also picked up most of the buyers as well because when prospective home buyers drove through the area most of the signs had her name on them. So, the buyers just assumed she was the person to speak to when they were interested in buying in that neighborhood.
What's the morale of the story? You tell me how did Agent Smith get that listing from Agent Jones?
THE STORY YOU HAVE JUST READ IS TRUE! ONLY THE NAMES HAVE BEEN CHANGED TO PROTECT THE INNOCENT!
Obviously, In case you had not yet figured it out, Agent Smith is me and you can read the actual testimonial on my profile page: http://activerain.com/fverna. This is the actual story of how I got my first listing and the results of that listing. Realize that I had already brought in several buyers to the community as well so I had established a reputation that I sold homes, not just listed them.
Exactly how I established that reputation in advance of getting listings is the focus of my next posting which I promise will be by the end of this week! In the mean time please leave me your comments and questions and thank you again for the comments already posted.
Top 10 List of this Post:
- Establish Your Farm Area through Research
- Create a "Playbook" of All the Homes in Your Farm
- Note everything you can about each property. Every distinct feature.
- Take a photo of every home in your farm. Taking a photo allows you to create custom marketing pieces later when you make some money. It will also help you if someone in your farm contacts you. If you are the agent that answers the phone and pulls up the info you have on that house and can say "Mr Bill, you're the homeowner with that beautiful brass lamppost and white fence aren't you?". When Mr. Bill says yes and asks how you knew that you can respond: "Mr. Bill, it's my job to know my market. Would you trust the sale of your home to anyone who didn't know your area?" Trust me, it's a KILLER close.
- If you have a database like Top Producer or even Outlook, enter that information in your database and Playbook
- Note everything you can about the people that live in those homes. (Will you list and sell every home in the area...No...but you will create "Raving Fans" that will become walking billboards for you.
- Break down your 500 home farm into blocks of 25. Make it your business that every morning you spend time learning just about those 25 homes. Gain all the info you can. 25 homes is an average of 2 blocks in most subdivisions. This should take you as little as 1 hour to 2 hours each morning. PLUS if you are not doing anything else productive, this will help you make money in the long run.
- Attend every garage sale, local event, neighborhood holiday, baseball games, school sports etc. in that farm. My kids would complain about driving so far on Halloween but they loved getting more candy than they could in our own neighborhood.
- Shop in that area. If I had to go to the supermarket, the cleaners, get a hair cut, go to the hardware store, needed flowers, anything...I did it in my farm area. It might have drove my wife crazy to come home with melted ice cream but I always ran into someone in my farm and ended up talking for a while. If we went out to eat, she knew where we were going to go.
- Know the schools, restaurants, barber shops and salons all the locally owned businesses in the area. There is a BIG reason for this that we will discuss in the next post. In addition, most Mom and Pop shops are owned by people who live in that area and if they don't live there chances are most of their employees do. Know them all on a first name basis.
- Know your competition. If an area you are considering to farm is already dominated (meaning that one agent NOT one company but one agent, has more than 20% of the listings on the market and / or does 30% or more of the transactions in that area) Don't waste money there. Remember, we are doing this on a budget so we don't want to compete in a smaller area. If many agents have listings there and no one agent dominated that area that is fine. GO FOR IT! Trust me most other agents will not take the time nor have the inclination to follow this program.
- Know you market stats! Review the activity in the farm each month and create a report to hand out to people you see in your farm. DO NOT leave them on doors! You want other owners in the area to contact you so they can get one too. If you leave them on a door, you never get to meet the owner. Other owners in the area will share and word will get around.
- Preview every home that comes on the market in your farm. Attend every open house in the farm. Take every chance you can to get into each and every home and learn more about the interior. It is possible that the agent that has that house listed may let it expire and you may have the opportunity to list that home.
- When you do work with a buyer, take every chance you can to show them homes in your farm (without steering or otherwise breaking the law or annoying your buyer).
- BONUS Tip #1: When you do get a sale in your farm, make sure everyone knows it and get a testimonial from the buyer or seller or both.
- BONUS Tip #2: Welcome every new owner that moves into the neighborhood even if you didn't complete the sale. There is a 90% chance that the agent they used will not maintain contact with the new owner and when they sell, you want them to think of you.
- BONUS # 3: An added benefit of this program is that the home owners in the area begin to see you as the expert and if they are considering investing in real estate they will seek out your help.
NEXT POST: BUILDING YOUR TRI-POD OF SUPPORT
How to get cash flow while building your farm.