Picture yourself as the undisputed authority in your ideal geographical farm, where your name is synonymous with all things real estate. 

With the right strategy, becoming the go-to agent in your neighborhood is absolutely within reach. Today, I’m going to provide the exact roadmap on how to confidently select your geographical farm.

#1—Connection to the Farm

What are your motives behind choosing a particular market? I grew up, and now have my own home, in my geographical farm. This gives me an upper hand by knowing what faces show up in my mailbox. More importantly, I see the neighbors every day. It helps that I can take my kids on a bike ride, my dog for a walk, or go for a jog and run into a prospect. 

Bottom line: I have a strategic advantage because I am fully immersed in the market where I work. I know the area and deeply understand its selling points. I know the community makeup, the people who live there, and the people who want to live there. 

Now to be clear, you don’t have to live in your farm, but there’s something special about farming an area you connect with. You can choose a geographical farm strictly for opportunistic reasons—and if that is the case you will simply need to work harder to learn the community ebbs and flows. You will need to lean into being the market expert, especially when you go up against an agent that has an emotional tie or a home address in the community you are farming.

#2—Average Price Point

We all want to increase our average sales price, and we all understand that price point directly correlates to commission received. 

The beauty of geographical farming is that you can clearly project the average sales price and average quantity of sales based on historical data. Targeting higher-priced homes may come with longer days on market and elevated marketing efforts, while homes at a lower price point may move quicker and offer more transactions. Whichever sounds best suited for you, do the work to make sure these numbers align with your business goals

I also highly recommend looking ahead. Is the average price point of your proposed geographical farm above or below your targeted average sales price in your five-year plan? Geographical farming is playing the long game. It’s a long-term commitment that takes time to see the real fruits of your labor. So don’t play for today. Play for your 10-year vision.

#3—Turnover Rate

Before you build a marketing plan and spend money on this endeavor, make sure the neighborhood is worth targeting. 

The turnover rate is one of the most important factors to consider when assessing the potential of an area. Turnover is a percentage of how many homes have sold in a defined area in a year. To calculate a turnover rate, tap into your MLS and pull the properties for the neighborhood that have sold over the last year, and use the following calculation: 

Turnover rate = (# of homes sold ÷ # of homes in area) x 100

Ideally, a turnover rate around 10% is a healthy opportunity. A good rule of thumb is that your farm area should have at least a 5% turnover rate for you to commit to making the investment.

#4—Agent Saturation

Is there already a dominant agent that serves this area? If so, this doesn’t automatically rule it out, but you’ll need to face the situation with realistic expectations and understand this may be a more challenging farm to break into. 

I consider a dominant player to be any single agent with over 20% market share. If there is an agent with even higher numbers, or multiple agents around the 20% market share ballpark, this will be a challenging farm to break into and should be considered carefully. Ideally, I would look for a potential farm with no agents over 10% market share, as this is where you will find the most opportunity to move in as the go-to agent.

#5—Size

Geographical farming is expensive, and it takes time to get traction, so considering your budget from the beginning is crucial. The number of homes in your farm dictates your expenses, so choose a size that you’re comfortable with and ensure you can maintaining that expense for the coming years. Remember, when you sign up to start farming you are signing up for the long game. 

In addition to your budget considerations, you need to choose a farm that you can serve and manage well. If the farm you choose is too large, it will be overwhelming, and you will underserve those homeowners, causing a dilution to your expensive marketing efforts. On the other hand, choosing a farm that is too small may not get you the volume of business you are hoping for. The key is to find a balance that allows you to effectively manage your marketing efforts and become a household name within that community.

Choosing Your Geographical Farm

With the right approach, tapping into these five guidelines will help you choose the right community to plant your roots. With this, you’ll not only find select an area that supports your professional goals, but it will also aligns with your unique expertise and passion.

Patience, persistence and a deep understanding of what makes the community tick are winners in the game of geographical farming. To win big you will need to become the trusted advisor, the community fixture and the absolute market expert.