Funnel

5 minutes
Aerial shot of a neighborhood. A few of the houses have solar panels. Our photovoltaic neighbors, they are probably called. But with a hint of condescension. It appears altruism is merely an intention and not a public certainty. L'enfer, c'est les autres.

The Path Toward Real Estate Success: Does Geographical Farming Really Work?

Joshua Smith Oct 30th, 2020
Joshua Smith
Funnel
Making Money in Real Estate

Many realtors think geographical farming is sending direct mail to homeowners, which is geographical farming, of course, but only one variation.

Geographical farming is fully practiced when a realtor focuses on and creates market share in one specific area. Which is what real estate is all about.

Some of the many was this concept can be practiced are direct mail, door hangers, circle prospecting, door knocking, open houses, Facebook ads, expireds, FSBO’s, etc. The most power strategy, of course, is when a combination of these strategies is employed. For example:

Example #1:

#1: Call expireds and FSBO’s inside your geographical farm area to get a listing.

#2: Once you have a listing, send out a “Just Listed” post card to the closest 500 neighbors.

#3: Three days after the postcard hits the mailboxes, circle prospect, aka call those same 500 neighbors.

#4: Hold open houses at your listing.

#5: Repeat #2 and #3 once your listing is sold but as a “Just Sold.”

Example #2:

#1: Hold open houses in your geographical farm area. If you do not have a listing inside your area, ask other realtors to hold theirs open, for example.

#2: Four days before the open house, deliver 500 neighborhood open house flyers to the closest 500 neighbors.

#3: Three Days leading up to the open house, run a paid targeted Facebook ad to your geographical farm area.

So, as you can see, direct mail is one way to farm, but it’s not the only way!

But why is focusing on a geographical farm area so important? Think of it this way: you are identifying an area which you want to work and gain market share in. Let’s say you are doing open houses. I will outline two options to show the power of geographical farming. 

Option 1: Identify an area (a geographical farm) which is within a one square mile and contains 15,000 homes. Every weekend that you are doing open houses, everyone in that area is seeing your signs, your name, your face, and your website. They are also getting the invite flyers you put out before the open house, and also your weekly Facebook ads are showing up in their newsfeed. On top of that, they are seeing your for sale signs in the front yards of homes in that area. You very quickly build brand recognition. The more frequently people see your name, the more confidence they have in your services.

Option 2: You do open houses all over your county. Anywhere you can get an open house will do. Different areas of the county see your signs, flyers, ads, etc. You are not building the hyperlocal branding that you are building in Option 1.

Also, think of your time investment. You might be able to work with four Clients in a day in a focused area, but if you are having to drive from one side of the city to the other, you might only be able to work with two. Not only is geographical faming effective, it also can be extremely efficient.

Now, let’s discuss the critical element of how to pick a geographical farm area. I have a few requirements I follow, which have proven to be very successful.

Recommended Requirements/Research To Perform In Picking a Geographical Farm Area

#1: Identify your ideal client. Who do you like working with? Who do you connect with the most? Of all your past clients, who sends you the most referrals, and what are the commonalities? As an example, maybe you find out that your ideal client is 30-45 years old, second and third time move up buyers, who are married, and with a young family.

#2: Identify to where your ideal client is moving. What cities in your county? What zip codes? What subdivisions?

#3: Once you identify where, then determine the house turnover rate in that area. Most successful geographical farmers like to see 8-10%+ yearly. To identify the turnover rate, take the total number of homes in the area and divide by the total amount of sold homes in the past twelve months. Example: 1,000 total homes, divided by 100 home sales equals a 10% yearly turnover rate.

#4: Research how many dominant realtors are in the area. I define dominant as a realtor who has sold more than 20% of the listings in that given area. A good rule of thumb is to pick an area with no more than one dominant realtor. I don’t want to plant a limiting belief in your mind that you can’t succeed in an area with more than one, but gaining market share is much easier and quicker in an area with one, or ideally zero, dominant realtors.

Once you have identified your geographical farm area, go to work and start implementing your marketing and prospecting strategy! 

Thanks for reading!  

Joshua Smith, Realtor/Mentor/Entrepreneur

-Voted 30th Top Realtor in America by The Wall Street Journal

-Over 5,000 Homes Sold & Currently Selling More Than 1 Home Daily

3 minutes
Happy couple closing a real estate transaction.

The Path Toward Real Estate Success: Past Client Referrals

Joshua Smith Jul 3rd, 2020
Joshua Smith
Mastery
Making Money in Real Estate

Consider the following statistic:

88% of recently surveyed buyers and sellers said their realtor did a great job, and that they would absolutely use him/her again in the future. However, only 11% ever do a repeat transaction with that realtor.

How could this be?

You can deliver absolutely amazing service to your clients, but if you do not stay in touch after the fact, those clients will forget your name and not know how to reach you. Out of sight, out of mind. To ensure your past clients do future business with you (and equally as important, send you referrals) you MUST stay in touch!

But why don’t most agents stay in touch?

1: They do not have a CRM/database to stay organized to stay in touch. Read more about what to look for in an effective CRM here.

2: They feel uncomfortable bugging past clients begging for business.

The great news is both of these objections are extremely easy to overcome:

1: Get a CRM/database, and use it. Problem solved!

2: You absolutely do not need to beg for referrals to stay in touch, but you must stay in touch!

But how do you stay in touch without coming across as an annoying sales person? By checking in and always focusing on the human connection. As Dale Carnegie states in his amazing classic business book, “How To Win Friends and Influence People,” the way to build deep connections is by being “interested in others, not trying to be interesting.”

Here are some tips for checking in with past clients:

1: Put past clients in your CRM/database, and send a “Monthly Video Current Market Update” to keep everyone educated on what is happening in the local real estate market.

2: Send out handwritten birthday cards.

3: Send out happy holiday emails.

4: Pick up the phone, and call every 90 days. Don’t make it about you, make it about them. “How is the Family?”... “How is Work going?”.... Etc.  Ultimately, the law of reciprocity will kick in and they will ask about you, your family, and your real estate career. 

The goal is to stay in touch, and by staying in touch you will stay front of mind, which will absolutely result in referrals! Now, to do the above, again, you need a good CRM/database that will allow you to task yourself, take notes, and allow you to do mass emails.

Your past clients are truly your money tree that is growing in your backyard. Don’t forget to water it!

Thanks for reading!

  Joshua Smith, Realtor/Mentor/Entrepreneur

-Voted 30th Top Realtor in America by The Wall Street Journal

-Over 5,000 Homes Sold & Currently Selling More Than 1 Home Daily

4 minutes
Number crunchin'.

The Path Toward Real Estate Success: The Path Is In The Math

Joshua Smith Oct 2nd, 2020
Joshua Smith
Making Money in Real Estate
Funnel

Realtors who never track their numbers will never know…

What it will truly take to hit their goals.

What created success in the past.

How to track their real expenses.

What their true ROI is.

Every single successful entrepreneur knows his/her numbers.

Tracking does not need to be difficult, and you do not need some elaborate system. Google Drive Sheets, Word documents, or whiteboards will all do the job, and are FREE!

I recommend you track three different parts of your business. In the end, it all ties together and will tell you the exact story you need to know to grow your business and make smart, strategic decisions.

The 3 Parts Of Your Business To Track:

#1: Activities and Actions

#2: Closing Data

#3: Income and Expenses

#1: Activities and Actions: I recommend you track these per lead source. Track the number of leads received. Track the number of reach outs (calls, text messages, etc.). Track the number of conversations. Track the number of appointments set. And track the number of closings.

You can always track more items, of course, but the more basic you make your system, the higher the likelihood is that you will execute on it. Eventually, the above tracking information will tell you: how many leads = one closing for that lead source, as well as how many reach outs, conversations, and appointments set = one closing. 

#2: Closing Data: I recommend that you track the lead source tied to each closing, buyer/seller, commission earned, and final sales price. This data, combined with the above data in item one, tells you so much information about your business. What lead sources are best, where your time is best spent, etc.

#3: Income and Expenses: I recommend you track all your gross income received (commissions earned) per lead source, and break it up between buyer and seller. Then track all your expenses. NOT just your overall total expenses, but break it down by each individual expense, each individual lead source, etc. You should know how much of your expenses are from your systems, lead generation, rent, open house signs, professional listing photos, and so on. Do this every single month as you will be forced to know where your money is going and also given the opportunity to evaluate your expenses each month and determine if all are necessary.

Again, this data allows you to grow your business and make smart, strategic decisions. Maybe you discover one lead source is bringing you a 700% return and the other is bringing you a 400% return. 400% ROI is a good return, but it may make more sense, if you are able to do so, to take that money, and invest into the lead source giving you a 700% return.

Watching the numbers will help you tremendously in your yearly goal setting and business planning as well. Maybe you want to increase your income by 30% this year from last. This data shows you exactly what you must increase to do so. Just imagine if you had concrete information like this: 10% of your Leads turn into appointments set, 76% of your appointments set get conduction, 26% of your appointment conductions turn into a closing. You discover you close one out of 47 of your leads, and your average lead cost is $6. That breaks down to one closing per $282 per closed home. Then, you discover it takes 500 Dials to get 100 conversations and 100 Conversations equals 1 Closing. You then know EXACTLY how many leads you need daily, how much you must spend, how many dials and conversations you must have daily, etc. to ensure your yearly goal becomes a reality. Powerful stuff!

I know tracking numbers is not fun and is something most of us dread doing, but there is not much that is more important inside your business!

Remember, your tracking system does not need to be fancy, it just needs to be in place. So start tracking and start EXPLODING your real estate business!

Thanks for reading!

  Joshua Smith, Realtor/Mentor/Entrepreneur

-Voted 30th Top Realtor in America by The Wall Street Journal

-Over 5,000 Homes Sold & Currently Selling More Than 1 Home Daily

3 minutes
Meeting around a laptop.

The Path Toward Real Estate Success: The Sales Funnel

Joshua Smith Jun 12th, 2020
Making Money in Real Estate
Real Estate Advice
Real Estate Success

Every business has a sales funnel, and every successful business owner knows his/her sales funnel inside and out.

A funnel, of course, starts off wide at the top, and then gets more and more narrow until the small opening at the bottom. Here’s my interpretation of the real estate sales funnel from top (widest part of the funnel) to bottom (narrow).

1st: Activities

2nd: Leads

3rd: AppointmentsMade

4th: Appointment Conduction

5th: Clients

6th: Under Contract

7th: Closing/Commission Check

IMPORTANT NOTE: Every client must go through the entire sales funnel. Steps cannot be skipped. However, some people in some situations may go through the funnel faster than others.

Each step in the sales funnel exists to get to the next step:

Activities exist to generate leads. Leads exist to generate appointments made.  Appointments made exist for an appointment conduction to occur. Appointment conductions exist to create a client. Clients exist to put them under contract. Homes which go under contract exist to close the property where you accomplish your client’s goal and accomplish your goal of generating a commission check.

NOW, something that is missed frequently in the sales funnel is that a real estate client does not fall out of the narrow opening at the bottom of the funnel never to return. Once you have a closing/commission check, that client now becomes a past client (your #1 lead source) and re-enters the sales funnel.

But, as with all things, knowing about the sales funnel is only half the battle. You must also have process and systems in place to ensure each step is never missed, happens over and over, is duplicatable, and is scaleable inside your real estate business.

So make sure you know your funnel, are paying attention to it daily, are mastering it, and are creating processes and systems to ensure each step is never missed and that all steps are duplicated over and over.

Now that you have gained some awareness of your sales funnel and its position in your business, analyze and see if you can find any steps on which you are falling short and can improve. Get those steps dialed in and continue to grow your business!

Thanks for reading!  

Joshua Smith, Realtor/Mentor/Entrepreneur

-Voted 30th Top Realtor in America by The Wall Street Journal

-Over 5,000 Homes Sold & Currently Selling More Than 1 Home Daily

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