The Ultimate Guide to Geographic Farming

We know that everyone is going through a tough time right now. Your personal lives and livelihoods are a mix of upside down and on hold. The coronavirus crisis is changing how everything in the world works.

However, at RPR, we're hoping we can help. We want to provide you with content that you can dive into and tackle now (while you have all this sudden time on your hands), so you'll be that much more prepared when the bell rings and things get back on track.

This geo prospecting article is a perfect example. You may have considered applying a technique like this to market yourself, but perhaps you held off because you thought it was too complicated or time-consuming. Well, now you can properly sink your teeth into this topic and this article will explain each step and every detail.

Get off on the right farming foot

Farming, also known as geographical prospecting, is a proven method of marketing your real estate business to a neighborhood or local proximity in a way that raises awareness of your brand, captures leads, earns referrals and gains listings. When used effectively, farming provides an excellent opportunity to connect with potential sellers. But what should you consider when selecting your farm area?

This article will review best practices for selecting a farm area, then review how to save a farm area using RPR's map, and how to generate mailing labels, CSV mailing exports and reports that will spark homeowner interest.

• Step 1: Answer these questions before selecting a farm
• Step 2: How to research key metrics for your farm
• Step 3: Gathering contacts for your mailings
• Step 4: RPR Reports for homeowners

5 Questions worth answering before committing to a farm area

A predetermined set of criteria for establishing your farm area will help save time and energy, and further your goal of becoming the de facto REALTOR® of choice. Here's a checklist of questions used by other REALTORS® who rely on farming to build their businesses:

1. Is the neighborhood nearby and easy to get to?

Operating a farm area outside your normal commute can be a challenge if you want the campaign to be consistent and affordable. A consistent effort includes touchpoints at least every three to four weeks, on a long term basis, so easy access to your farm area is an important consideration.

2. Does the area have an acceptable turnover rate?

One of the most important aspects of identifying a farm area, turnover rate, is a simple calculation that helps to identify whether the area has enough sales activity to sustain your prospecting campaign.

To figure out the turnover rate in your potential farm area, divide the number of homes in your farm area by the number of homes sold in the last 12 months.

For example, let's say 15 houses have been sold in the past 12 months. There are 150 homes in the area. Therefore:

(15 ÷150) x 100 = 10% turnover rate

You typically want to see 5% turnover rate or higher.

3. What's the Absorption Rate in the neighborhood?

Another helpful metric that can determine the potential for success is Absorption Rate—a calculation used to predict how many months worth of inventory are in a particular neighborhood.

To calculate months of inventory for your farm area, first calculate the rate of sales. Next, we can use that to determine the Absorption Rate.

Using the same example as above, we're looking at the last 12 months (365 days), and 15 homes have sold during that time period. And lastly, there are three current listings.

Rate of Home Sales calculation:

Time Frame/Number of Sold Homes = Rate of Home Sales365 days / 15 = 24.3

This tells us that one home is sold every 24.3 days

Now we can calculate Absorption Rate:

Number of active homes x the rate of home sales =

3 x 24.3 = 72.9 days (or 2.43 Months)

This tells us that if market conditions remain consistent and if no new listings come on the market, it will take 72.9 days (or 2.43 months) for the current inventory to sell at the current pace of the market.

4. Is the number of homes manageable for consistent marketing outreach?

Your goal is to get your brand in front of as many eyes as possible. Yet, you need to sustain your farm campaign consistently, with depth and quality, and with a long-term vision in place. Keeping those costs and available resources in mind is important. The key? Market only to as many homes as your budget will allow, every month.

5. Does one agent currently dominate sales activity for the neighborhood or have homes been sold by many different agents?

Real estate is a competitive business with many agents establishing unspoken territories. Knowing that, and preparing, is key to developing your farm area. Look for areas that have a multitude of agents selling with no defined market share. Chances are the area isn't being marketed heavily by any one agent, giving you an opportunity to consistently brand yourself as the local expert.

• Use this Google Spreadsheet as a template

How to put your farming plan into action

To calculate the metrics above, such as Turnover, Rate of Sales and Absorption Rate, requires that you know numbers like total homes in the area, number of homes sold in the last year, and number of active properties. To get you started, we have created a template worksheet which can be downloaded from here. Follow the steps below to complete the document.

First, let's get the number of homes in a neighborhood:

1. Sign on to narrpr.com
2. Select All Properties above the search bar.
3. Enter the geographic (neighborhood name, ZIP or city) area representing your potential farm area.
4. Select Search.
5. If you've landed on RPR search results in List View, switch over to the Map View.
6. Pan and zoom the map to center your farm area in the window.
7. Choose the geographic farm boundaries. This can be accomplished a few different ways:
   • Identify pre-defined neighborhoods:
     • From Show Geographies (located above the map), choose Intermediate or Micro Neighborhoods.
     • Now select the geographic area that matches your potential farm. The area will turn purple.
   • Draw a shape or use a map pin:
     • Use one of the map drawing tools (box, radius or polygon) or map pins (drive time or distance) to define a specific area.
     • Once the shape is set, choose Save.
8. With the neighborhood selected, choose Search in This Geography. The count will be shown to the bottom left of the map.
9. Write down the total number of homes in your spreadsheet template.
10. Repeat for each neighborhood you'll be comparing.

Next, we'll determine the number of homes sold in the neighborhood over the last 12 months.

11. Under the map, uncheck Active and Pending. Also use the Sold Date dropdown to select 1 year. Choose Apply.
12. Record the count in your template worksheet.
13. Repeat step 9 for each neighborhood you'll be comparing.

Identify the number of homes currently listed in the farm area.

14. For this, we need to change from All Properties search to For Sale search. Above the map, in the blue navigation bar, select the magnifying glass.
15. Select For Sale search and enter the name of the pre-defined neighborhood you've been researching, or the custom name you gave your search from step 6.
16. Select Search.
17. View the number of homes currently listed under the map.
18. Record the number in your worksheet.
19. Repeat for each neighborhood you'll be comparing.
20. With your numbers added to the template worksheet, the 12-month turnover rate is calculated.
21. Lastly, using your template worksheet, enter your estimated cost per mailing. This number does not come from RPR. It is the average per-piece marketing cost for each home in the farm area. Not sure? Try using the USPS Every Door Direct Mail calculator.

TIP:
Create a market activity report for the neighborhood to find additional metrics such as median estimated listing price, median estimated home value and median days in rpr. The metrics will be found on page 2 of the report.

First Contact: How to get the contacts for your mailing

RPR's Mailing Labels feature provides REALTORS® the ability to create farming or prospecting lists and generate up to 2,000 pre-formatted labels per month for mailings to residential or commercial property owners, based on any RPR search.

The labels are available in popular formats, or users can choose to export the results into a standard CSV file. The data used to create the lists is licensed from Black Knight, RPR's public records provider.

Mailing Labels are created from public records data and directly pulled from your search results. Filter your results through the advanced search, the left side of the results page or through the map drawing tools.

1. Sign on to narrpr.com
2. Select All Properties from the menu option at the top of the search bar.
3. Search the Saved area we created earlier and click search.
4. From the Search Results page, select Mailing Labels.
5. The Mailing Labels dialog opens.
6. LAYOUT: Choose your output: CSV or PDF
   1. If PDF is selected, choose from three format options:
      • Avery 5160: 30 per sheet
      • Avery 5161: 20 per sheet
      • Avery 5162: 14 per sheet
7. CUSTOMIZE: Choose address and owner name format
   • Select Address Type: Property or Tax Billing
   • If Tax-Billing is chosen, you can also choose to Eliminate Duplicates
   • Choose how you want the labels addressed
   • Owner Name
   • Owner Name "and/or Current Resident"
   • "Current Resident"
   • A Custom Name you enter
8. FILTER your labels:
   1. Choose Occupancy Type:
      • All – Includes all properties in the search results
      • Owner Occupied - Only includes properties where the fields "owner occupied" is set to Yes
      • Absentee Owner - Only includes properties where the fields "owner occupied" is set to No
   2. Select which labels to exclude:
      • Exclude listed properties
      • Exclude properties on Do Not Mail list
      • Exclude properties with incomplete addresses
   3. Select which Records to export:
      • All (Up to 2,000 per month)
      • Range (From/to): controls the number of records to export by specifying a selection range.

Applying What You've Learned: RPR Reports

In this section, we'll outline a few reports best suited to your farming needs, and finally how to instantly respond to on-the-spot consumer inquiries and leads.

Market Activity Report

RPR's Market Activity Report is a snapshot of all the changes in a local real estate market. It includes a list of active, pending, sold, expired and distressed properties, including recent price changes. You can choose to go back days or weeks, and even up to three months.

Prior to walking your farm area, generate and save a Market Activity Report. Then, when striking up a conversation with the homeowner, use the RPR app to share the area's sales activity, even offering to email or text the report without skipping a beat.

Even if the homeowner isn't ready to sell, keep the conversation going by offering to send a monthly or quarterly Market Activity Reports. Perhaps the neighborhood has a few distressed properties your new client is concerned about or they're thinking of selling when values increase. Here's your opportunity to get in on the ground floor.

Carpet your farm area with the Market Activity Report, either by email, snail mail, or in person. Customize the report to let them know updates are available at frequent intervals. Direct them to your website to sign up for the next report. Ask them to email it to their neighbors.

Here's what you will find in a Market Activity Report (uncheck elements you wish to hide):

Report Elements:

• Market Snapshots
  • Estimated Home Values
  • 12-Month Change in Estimated Value
  • Concentration of Distressed Properties
  • Sales Price
  • List Price
• Market Activity Summary Stats
• Market Activity Property Details
• About RPR and Our Data
• Choose the report timeframe:
  • Last 3 Days
  • Last Week
  • Last Month
  • Last 3 Months
  • Last 6 Months
• Choose which statuses to show:
  • New Listings
  • Pending
  • Price Change
  • New Distressed
  • Recently Sold
  • Expired
  • New For Lease
  • Recently Leased
  • Open House

Neighborhood Report

RPR's Neighborhood Report is a user-friendly configuration of data that will help you know a farm area from the inside out. The report profiles the people, economy, quality of life, and housing for the areas you choose, and can be a great icebreaker when introducing yourself to homeowners with a "Get to Know Your Neighborhood" campaign.

Much like the Market Activity Report, generate the Neighborhood Report prior to walking your farm area. Then, when striking up a conversation with the homeowner, use your phone or tablet to share the neighborhood's report, even offering to email or text the report to the homeowner. You might even want to pull out a fun or intriguing fact about the neighborhood and start the conversation off with a "Did you know" type of question.

Here's what you'll find in the Neighborhood Report (uncheck elements you wish to hide):

• Age ranges
• Average income
• Occupations
• Education levels
• Voting trends
• Job growth, unemployment rate
• Cost of living
• Climate
• Average commute times
• Median list and sales prices
• Listing and sales volume
• Price range and price per square foot of homes sold

Property Report

RPR's Property Report takes a deep dive into data sets such as listing and foreclosure activity, market statistics, demographics, property history, taxes, and school information. The report also includes a property's before-and-after photos.

RPR's Property Report is a great marketing tool for those follow-up efforts. And remember, with RPR, you don't need to go back to the office to create one. Let the homeowner know that you can easily email, text, or hardcopy a Property or Mini Property Report to them, complete with your evaluation of the home's value as well as comps from the neighborhood.

Examples of what you'll find in the Property Report include (among others):

• Property Values
• Comp Analysis Results
• Home and Homeowner
• Facts
• Property Photos
• Refined Value
• Tax, Assessment and Mortgage History
• Sales and Financing Activity and Price Change History
• Distressed Info
• Map Layers
• Neighborhood Info
• School Scores and Reviews
• My Mobile Notes and Photos

Mini Property Report

As the name implies, RPR's Mini Property Report is a handy, cost-effective deliverable that homeowners will find easy to digest. Most importantly, when your photo and contact info are emblazoned on the report, it's sure to make a lasting impression on a potential client.

Examples of what you will find in a Mini Property Report include:

• Value
• List Price
• Comp Analysis Results
• Home and Homeowner Facts
• Property Photos
• Historical Data (taxes, assessments, mortgages)

To view the original article, visit the RPR blog.