Selecting the best geographic farm — Step 1. Selecting the best geographic farm is easy, but not simple. Most agents simply pick an area and say, “I want to farm here” without realizing it could be a disastrous decision financially. If you’re a Realtor wanting to make the BEST decision, here are 6 steps to follow in selecting the right location to farm. Watch video to learn more.
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How to select the best geographic farm for real estate seller leads Part 1 – turnover rate
So the first thing to do when you start thinking about using geographic farming as one of your real estate marketing tools is you have to select the right location.
Think about geographic farming as an investment in your real estate business. If you are going to invest your money into stocks, do you say any stock is as good as another or do you actually do some research on which stocks seem to be growing faster than others?
How to generate real estate leads using the turnover rate to pick your geographic farming location
Real estate is the same way. Geographic farming is the same way. There is a term in real estate called ‘turnover rate’. We use this for geographic farming.
To put it in simple terms, let’s say you have two neighborhoods of 500 homes each. One neighborhood of 500 homes sold 20 homes last year and the other one sold 50 homes last year. The neighborhood that sold 50 homes has a higher turnover rate by 2.5 times and this means that you will get more real estate leads, find more motivated sellers, and ultimately get more transactions if you do your geographic farming in this neighborhood.
So how do you determine turnover rate in real estate? Mathematically, it is the number of homes that sold divided by the total number of homes in that area. Let’s say that 50 homes were sold by sellers or real estate agents. Divide that by the total number of homes in that area. In this case, let’s say it is 500 homes. So that’s 50 divided by 500. That gives us a 10% turnover rate.
Higher turnover rates lead to better geographic farming locations for real estate agent marketing
What you are looking for initially is a farm that has a higher turnover rate. If you have a geographic farm that has a 0% turnover rate, you are not going to get any listings or find any motivated seller leads because no one is selling in that area.
If you go to a farm that has a 10% turnover rate, you stand a chance of getting a lot more listings and real estate lead generation because there is a lot more activity. More activity leads to more motivated seller leads.
Then if we were to balance one geographic farm against another and the first farm has a 3% turnover rate with the second farm having a 9% turnover rate. That means that, all else being equal, you are more likely to get 3 times as much business for your real estate company out of the farm with the 9% turnover rate than the farm that has a 3% turnover rate.
That’s why the turnover rate is so important when it comes to geographic farming.
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