2014 MEMBERSHIP SURVEY HIGHLIGHTS

Joel Singer, CEO May 3, 2014

Survey Methodology

• 800 telephone surveys of randomly selected members in January 2014.

• Maximum sampling error: ±2.45% at 2 standard deviations (a 95% confidence level). Subsets of the total sample will have a higher sampling error.

DEMOGRAPHICS: WHO ARE WE?

Median Age: 52

30% 25% 20% 15% 10%

12%

5%

1%

0% Under 25 years • Q: What is your age?

25 to 34 years

17% 25% 28% 17%

35 to 44 years 45 to 54 years 55 to 64 65 or older

Generation

Gen Y Gen X Boomer Senior

8% 12% 26% 54%

• Q: What is your age by generation?

Education

High school diploma Some college (no degree) AA degree (2 years) BA/BS degree

17% 20% 17%

Master's degree

3%

Some graduate school (no degree) JD/LLM/PhD

1%

0%

1%

10% 20% • Q: What is the highest level of formal education you have completed?

30%

41%

40% 50%

Ethnicity

40%

37%

35% 30% 25% 20% 15% 10% 5% 0%

22% 15% 8% 7% 6% 4% 2%

• Q: What is your ethnic background?

Tenure in Real Estate Holding Steady

14 12 4 2 0 10 8 6

10,0 8,7 8,9 10,3 11,0 10,2 10,4 10,2 10,6 11,7

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Sales Agent & Broker Associate Are The Dominating Roles

Sales Agent or Broker Associate 80% Broker Manager or Broker Owner 20%

• Q: Which of the following categories best describes your role in real estate?

Majority are Full Time

Part-time REALTOR® 22% Full-time REALTOR® 78%

• Q: Which statement, full-time REALTOR® or part-time REALTOR®, best reflects your role in real estate: (New question for 2014.)

Majority are Full Time

Gen Y Gen X Boomers Seniors 120% 100% 80%

84% 81% 85% 100%

60% 40% 20%

16% 19% 15% 0%

0% Full-time REALTOR® Part-time REALTOR® • Q: Which statement, full-time REALTOR® or part-time REALTOR®, best reflects your role in real estate: (New question for 2014.)

Average Number of Closed Escrows

9,8 10,2 10,3 7,2 7,4 5,6 4,2 5,9 6,0 7,3 6,3 5,5

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 • Q: About how many transactions did you close in 2012?

AWARENESS OF C.A.R. MEMBERSHIP/BENEFITS

Unaided Awareness of Belonging to Real Estate Associations 0% 20% 40% 60% 80% 100% California Association of REALTORS® Local Real Estate Board/Association of REALTORS® National Association of REALTORS®

73% 94% 92%

Department of Real Estate

31%

Women's Council of Realtors Asian Real Estate Association of America (AREAA) National Association of Hispanic Real Estate Professionals (NAHREP) National Association of Real Estate Brokers (NAREB)

3% 20% 6% 4%

• Q: What industry (real estate) associations or other organizations do you belong to?

Membership Awareness Slightly Increases C.A.R.

Local AOR N.A.R.

W.C.R.

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% • Q: What industry (real estate) associations or other organizations are you aware of?

94% 92% 73% 20%

When You Hear C.A.R., You Think… (Unaided responses) 0% 5% 10% 15% 20% 25% Keeping members on top of key issues

28%

30% Lobbying

24%

Code of ethics Legal services zipForms® Education, training

17% 13% 8% 11%

First-time mentioned in 2014

• Q: When you hear CALIFORNIA ASSOCIATION OF REALTORS®, what is the first thing that comes to mind? [Single response only.] (Selected listing of highest frequency responses)

REALTORS® Can’t Live Without….

84%

zipForms® Helping you stay current on trends in real estate

7% 6%

Legal Hotline

4%

Lobby/advocacy 0% 20% 40% 60% 80% 100% • Q: What is the ONE (stress) member benefit provided by C.A.R. that you cannot live without to conduct your real estate business? (New question in 2014.)

Over the Years Legal Hotline Remains Top Benefit, zipForm® “Most Improved” 2011 2012 2013 2014 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 72% 61% 38% 71% 55% 71% 81% 76% 82% 80% CRE Magazine zipForm® Plus (8) Government Advocacy (Lobbying) Helping you stay current on trends in real estate Legal Hotline • Q: What benefits, information, events, services or products does the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) offer REALTORS® like you?

Desired Benefits: Most Want Reduced Dues

0% 10% 20% 30% 40% 50% Reduce annual dues

43%

Better enforcement of Code of Ethics Raise professional standards to become or remain a REALTOR®

21% 34%

C.A.R. discounts on E&O insurance

2%

• Q: If C.A,R could offer one new benefit, product, or service that would help you in you real estate business or save you money, what would it be?

MEMBER SATISFACTION: HOW ARE WE DOING?

Members are Mostly Satisfied with C.A.R.

0 1 2 3 4 5 6 7 zipForm® Plus 8

8,3

9 10 Lobbying and political action

8,3

California Real Estate Magazine

8,3

Legal Hotline & other legal services and offerings Value of your membership compared to what you pay Overall satisfaction Staff service zipForm® 6

8,2 8,1 8,1 7,9 7,3

• Q: Please rate C.A.R on a series of other programs on a scale of 1 to 10, with 10 being extremely satisfied and 1 being extremely dissatisfied.

Satisfaction in All Areas Steady or Down Slightly in 2014 Legal Services RE Mkt Analysis/Stats CRE Lobbying Staff Services zipForm® 6/ zipForm® Plus 10 9 8 7 6 5 • Q: Please rate C.A.R on a series of programs on a scale of 1 to 10, with 10 being extremely satisfied and 1 being extremely dissatisfied.

How C.A.R helps REALTORS®

Lobbying & Government Advocacy 76% Helps promote a professional image of REALTORS® 28% zipForm® 6 and standard forms 29% Economic & Market Information 71% Code of Ethics 46% CRE Magazine and Other Publications 44% Education and Training 38% Legal advice, Legal Hotline 40%

N=643 • Q: Why do you feel that organized real estate does help you in your real estate business?

Members Who Do Not Value Organized Real Estate Find Dues Too High

Why Organized RE does "not" help your business

N=157

Statewide organization that does not focus on my market; 23% Dues are too high; 33% Don't do that much real estate business; 29%

• Q: Why do you feel that organized real estate does not help you in your real estate business?

Historical Trend of Perceived Average Dues

$400 $350 $300 $250 $200 $150 $100 $50 $-

$170 $162 $167 $241 $255 $358 $325

2008 2009 2010 2011 2012 2013 2014 • Q: What are your annual dues exclusively for California Association of REALTORS®, not your local board and N.A.R. or your MLS?

Members Who Know the Correct Amount of Dues They Pay 60% 50%

51%

40%

54% 53% 51% 52%

30% 20% 10%

30% 31% 25% 32% 33%

0% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 • Q: What are your annual dues exclusively for the California Association of REALTORS®, not your local board of REALTORS®, National Association of REALTORS®, or your MLS (Listing Service)?

Broker Requirement Still Primary Reason to Join a Real Estate Trade Association Brokerage, broker requirement

59%

Member benefits

41%

Keep up with industry and changes in same

20%

MLS access is more affordable with membership

16%

0% 10% 20% • Q: Why do you maintain membership in real estate trade association?

30% 40% 50% 60%

KEY ISSUE FOCUS: ETHICS & PROFESSIONALISM

Ethics Violations

Q: Have you ever reported another agent for an ethics violation?

No 40% Yes 60% Q: What was the outcome?

0% 50% 100% Written warning 69% Suspension of license 15% Fine 8% Mandated educational classes 7%

Majority Don’t Report Ethics Violations

No 34% Yes 66%

• Q: Have you ever dealt with another agent you believe committed an ethics violation but did not report that person?

Ethics Issues: Reporting is Not Worth The Time 0% 10% 20% 30% 40% 50% 60% Did not want to go to the time and trouble 54% Issue settled in office, brokerage 30% Settled issue one-on-one 16% • Q: Why did you choose not to report the other agent?

OUTLOOK 2014

REALTORS® Most Concerned about Financing in 2014 (Average Score) Mortgage loan availability Vacant property maintenance requirements Mortgage Reform/Housing Finance Reform* Restoring FHA Loan Limits*

8,2 8,2 9,0 8,6

Point-of-Sale regulations

7,3

Business license taxes

6,6

1 2 3 4 5 6 7 8 9 • • Q: Please rate the following legislative issues on a 10pt. Scale in order of their importance, with 10 being extremely important and 1 being extremely unimportant. *New or changed in 2014 10

Referrals, Marketing, Social Media Among Top Changes to 2014 Business Plan (All responses) Increase marketing, farming

20%

Increase hours worked per week Get listings, virtual tours, etc. on social media Unsure Educate sellers to be realistic, they can't sell high and buy low More aggressively asking for referrals Learn how to use smart phones, smart phone app's, social media, etc. to speed up and increase getting information… Incorporate use of social media Do more networking 0%

10% 6% 6%

5%

10% 8%

10%

13% 13% 15%

15% 20% 25% • Q: What, if anything new, are you planning on incorporating into your 2014 business plan to help you deal with anticipated challenges?

2014 Traditional/Standard Sales Greatest Opportunity (2014 All responses) Incorporate use of social media

21%

More opportunities to cultivate, nurture past clients

16%

Cash buyers

15%

Equity sales (i.e., real down payments, real income)

13%

Commissions should increase (low commissions with REO's and shorts starting to decline)

11%

Increase hours worked per week

2%

0% 5% 10% 15% 20% 25% • Q: What do you anticipate will be your greatest opportunity in your real estate business over the next year? (Single Response)

2014 Lack of Inventory Greatest Challenge

(2014 All responses) Lack of inventory, listings

35%

Mortgage financing is very difficult

26%

Especially difficult to qualify investors for financing Lenders tracking credit changes, purchases hits right up to closing (reduces certainty of mortgage) Lack of buying urgency

10% 7% 16%

Earning enough to stay in the business

6%

0% 5% 10% 15% 20% 25% 30% 35% 40% • Q: What do you anticipate will be the greatest challenge for your real estate business over the next year? (Single response)

HAVE A GREAT 2014 THANK –YOU

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