Analogy of my Real Estate Marketing Process

I want to give you an analogy of my real estate marketing process.

I think of myself as a Farmer, as a new farmer I want to determine what kind of crop I want to grow. So, I do a little research and talk to the local Farmers markets and ask them, what they pay for each type of produce and when. Now with my crop picked out I have to plan my field, so I look over my farm land and decide which sections are most profitable for me to grow my crop on. I have to consider, the distance I have to take the water and fertilizer, also will it be feasible to me to harvest my crop in that area? Since I am a new Farmer, I want it to be as easy as possible for me to determine when a vegetable is ripe and when it’s over ripe.

So now I have mapped my plan for my field and seeds in hand, I begin to plant, water and fertilize. I know that if I skip any of these three steps, I will not have a crop to harvest. The growing season continues and I find out that I have to continually water and fertilize my crop over and over. But one day my crop matures and I have begun to harvest.

I load up my wagon and back to the Farmers Market I go, I want to let them all know what I have grown, and that it’s ready for them to purchase. I get there and see other Farmers with the same type of crop. How do I convince them to buy my crop instead of these other Farmers?

I could hold out for the best price against the competition, I will probably walk away with a single bushel sold and I will return to the farm with my wagon full and the whole season wasted. Or I could offer the best price while still making profit, I am not coming home poor, I will still make good money when I sell it, and everyone will want to buy from me, because they get the best value.

So how does the Farmer analogy work in Real Estate?

When you research and talk to the local Farmers markets and ask them, what they pay for each type of produce and when. You are researching the Real Estate Market and deciding which buyers you are selling to and what they are looking for. This will help you to determine what type of properties you should be marketing to and what price you need to get them for in order to deliver what they want at a price that they will pay attention to.

Now with my crop picked out I have to plan my field, so I look over my farm land and decide which sections are most profitable for me to grow my crop on. Consider your local area, your field and choose the neighborhoods that have houses that will fit your end buyer’s needs. Does the area you chose have enough sales action for you to be able to determine the value of the homes?

I have to consider, the distance I have to take the water and fertilizer. Are the areas you choose close enough to each other and to one another for you to use your time effectively.

Will it be feasible to me to harvest my crop in that area? Would it be reasonable for you to market these homes? Would it be reasonable to show the house once you have it? Does the reputation of the neighborhood help or hurt your values.

I want it to be as easy as possible for me to determine when a vegetable is ripe and when it’s over ripe. This can be hard, but pay attention to Market changes and Marketing because you do not want to still be invested in an area or marketing strategy that has become over ripe.

Why Do Auctions Work?

This should be the question you’re asking yourself right now. If auctions work why doesn’t everybody use them to sell their homes?

That’s like asking why isn’t everybody a millionaire?
Because human beings very rarely think outside the box!!!

So much of what we do in our daily routine has been passed down through traditions that we never bothered to question. Take the diamond engagement ring for instance.

Although diamonds were used in engagement rings before the mid-20th century, it was an advertising campaign by De Beers that made the diamond the standard it is considered today. The campaign slogan. “A Diamond is Forever” was written by Frances Gerety in 1947 (she was never married). The DeBeers Family commissioned the slogan in an effort to drive up the price and demand for diamonds. By 1965, 80 percent of American women had a diamond engagement ring.

Auctions:

The famous auction house, Sotheby’s, is known for auctioning priceless works of art. Start noticing how often world records are set and why. Usually there are two to three serious bidders who drive the price up to record-breaking heights.

EBay is another site that during the dot com bubble everybody thought would lose tremendous value and yet they only made more and


more money. Why? Because auctions work. Look through eBay and you’ll see auctions work on Pez dispensers, cars, bird cages, car parts,
just about anything and everything imaginable. And yes recently homes, although they have a long way to go.

Auctions are being used to sell off vast amounts of mortgages and now lenders are using them to sell hundreds of houses at a time.
Don’t think that you get homes at a bargain at an auction. Usually, if the auctioneer has done his job, he is receiving close to 100% of the value of the property he is auctioning. Don’t forget most auctioneers get a 10% commission in the form of a “Buyer’s Premium.” Therefore if they sold a piece of property at 80 or 90 per cent of its actual value, they still add on their 10% commission! They are getting the true value of a piece of property. Are you really getting a deal if you buy a property 85 - 95% of value? As an end user, maybe. As an investor you are definitely not getting a deal.

But are you getting a deal if you are the investor conducting a similar event on your own property? Absolutely YES!!!