2012 Strategic Plan Don Faught, 2011 Treasurer Special Executive Committee Meeting August 30, 2011.

2011 SPF Committee John Pinto, Vice Chair Tracey Saizan, Vice Chair David Barca, Committee Liaison Gene Binsbacher Cynthia Carley Linda Carroll Liz Claus Jill Furtado Bob Hart Bill Jansen Shannon King Bob Kulick James Link Jared Martin Kay Moore Ann Pettijohn Jeff Phillips David Walsh Sue Walsh John Wong Don Faught Chairman

SPF at Work: August 2011 C.A.R. Headquarters

2011 Committee Highlights Urgency and Connection Member Interviews --- Challenges, Wants, Needs, Hopes and Fears Perception of organized real estate not uniformly positive Can’t you fix the banks? Short Sales? Foreclosures? Burn-out: How can I keep going? Financial Stability & Viability: How will I pay my bills? Mega Issues – No time for word-smithing Creativity and Long-Term Focus Marshmallow Challenge Real Estate 2050 Sci Fi thriller Value-added Input 2011 Membership Survey 2011 New Member Panel – year 3 Fireside chat with Joel Singer

SPF Member Interview Questions Over the past year, what have been your biggest challenges? What is your opinion of organized real estate? What is one thing that C.A.R. could do that would help you in your real estate business? What does C.A.R. already do that they should keep doing or should be doing better? What keeps you up at night?

Interview Results Perception of organized real estate not uniformly positive Can’t you fix the banks? Short Sales? Foreclosures? Burn-out: How can I keep going? Financial Stability & Viability: How will I pay my bills?

Marshmallow Challenge

Books

2011 SPF Book Selections

VIDEOS

2011 Videos Ted Talk: Simon Senak How Great Leaders Inspire Action Ted Talk: Tom Wujac The Marshmallow Challenge “Inside Job” – Best Documentary Socialnomics ROI “Network” – I’m Mad as Hell

2011 Videos Whatever It Is – I’m against It! - Groucho Marx Get the information - Jim Rohn Fireside Chat – FDR

Membership Survey: Desired New Benefits

17 Desired New Benefits Q: If C.A.R. could offer one new benefit, product or service that would help you in your real estate business, what would it be?

18 Desired New Benefits (cont.) Q: If C.A.R. could offer one new benefit, product or service that would help you in your real estate business, what would it be?

19 Desired New Benefits (cont.) Q: If C.A.R. could offer one new benefit, product or service that would help you in your real estate business, what would it be?

20 Desired New Benefits (cont.) Q: If C.A.R. could offer one new benefit, product or service that would help you in your real estate business, what would it be?

21 REALTOR® Rating Programs 53% of those aware of rating programs are interested in them. (N = 334)

22 Greatest Opportunities in 2011 Q: What do you anticipate will be your greatest opportunity in your real estate business over the next year?

23 Greatest Opportunities in 2011 (cont.) Q: What do you anticipate will be your greatest opportunity in your real estate business over the next year?

24 Greatest Challenges in 2011 Q: What do you anticipate will be your greatest challenge in your real estate business over the next year?

25 Greatest Challenges in 2011 (cont.) Q: What do you anticipate will be your greatest challenge in your real estate business over the next year?

26 Changes to Your 2011 Business Plan Q: What, if anything new, are you planning on incorporating into your 2011 business plan to help you deal with anticipated challenges?

Members Who Believe Organized Real Estate Helps Them In Their Business Q: Do you feel that organized real estate, such as the California Association of REALTORS, helps sell real estate?

Why Members Believe Organized RE Helps Them In Their Real Estate Business 28 Q: Why do you feel that organized real estate helps you in your real estate business)? (new question for 2011)

Why Members Believe Organized RE Helps Them In Their Business (cont.) 29 Q: Why do you feel that organized real estate helps you in your real estate business)? (new question for 2011)

Why Members Believe Organized RE Helps Them In Their Business (cont.) 30 Q: Why do you feel that organized real estate helps you in your real estate business)? (new question for 2011)

SPF Committee Ranking vs. Membership Survey Unaided Awareness Methodology SPF ranked list of given benefits (aided) Membership Survey respondents answered open-ended question (unaided)

Top 10 Benefits: Membership Survey vs SPF Membership Survey (1,574 respondents)SPF Committee (14 respondents) 1.Legal Hotline1.zipForm® 6 2. Helping you stay current on trends2. Legal Hotline 3. ca.realtor.com, realtor.com, move.com3.car.org 4. CRE Magazine4. Business Meetings 5. Legal services5. Legislative advocacy 6. Government advocacy6. Red Alerts/Calls-for-Action 7. Develop, introduce & advocate C.A.R.- sponsored legislation 7. Housing market forecast 8. Government affairs8. Standard Forms 9. Advertising/promoting REALTORS®9. Legal Q&A 10.zipForm® 610. Economic outreaches

Themes for 2012

Market: Short Sales Tools: Social Media, C.A.R. loaded ipad Professionalism: Ratings are a reality Communication: Video Video Video Benefits: Member Value Campaign Dues Compliance: It’s only fair Training: Negotiating, Mentors, Business Management, Dealing with difficult people

2012 Membership Projection

Membership vs. Sales Membership follows Sales with a 2-Yr Lag Sales Peaks: 1978, 1988, Membership: 1980, 1990, 2006 Source: CALIFORNIA ASSOCIATION OF REALTORS®

Membership – SPF Projections and Actual Source: CALIFORNIA ASSOCIATION OF REALTORS® Year (Date of SPF Projection)

Membership Scenarios Through 2013 August 1, 2011 Forecast Source: CALIFORNIA ASSOCIATION OF REALTORS®

Membership Outlook – Source: CALIFORNIA ASSOCIATION OF REALTORS® Forecast Date: August 2011

2012 Proposed Augmentations

2012 Proposed Augmentations (Approved) Funded by Dues

Local Forms Member Legal Services Working with local associations and local standard forms/risk management committees, this pilot program provides funding to digitize local forms for inclusion in zipForms®. At least one market area will be selected from the north and one from the south with the goal of obtaining existing, or creating new forms that comply with local laws and disclosure requirements and put these forms into the zipForms® library. This pilot program will enable C.A.R. to determine the scalability of the effort as well as measure support for expanding the program beyond the initial pilot. The program also allows for ongoing monitoring of local activity to ensure the forms stay current. (Cost: $35,600)

REALTOR® Rating Pilot Program Strategic Planning and Finance This augmentation continues the initiative and pilot program that asks clients to rate their REALTOR® through the MLS interface. In Northern California the pilot is a partnership between C.A.R., MLS Listings Inc., and Quality Service Certified (QSC). This augmentation provides funding to continue the program through the end of 2012, providing additional time for implementation and adoption. It also expands the pilot to include other MLS’s and/or regional brokerages to ensure critical mass in terms of participants and returned surveys. (Cost: $78,220)

REALTOR® Rating 360 Strategic Planning and Finance REALTOR® Rating This program provides for a voluntary peer-to-peer rating system to be made available to California REALTORS® through car.org. It will also permit members to rate ancillary service providers. Utilizing an “off the shelf” rating template ( system.com), this program will enable members to rate other REALTORS® and service providers involved in a transaction after the close of escrow. Participants would be rated on five categories: helpfulness; knowledge; speed of communications; professionalism and an overall rating. Participation is voluntary and ratings will not be displayed until directed by the member. (Cost: $15,400)

NAR Variable Dues Formula Membership This program will educate local associations in California on the NAR dues formula policy and provide the local AORs with tools for compliance. The disparity between the number of REALTOR® members and agent counts is significant throughout the state. In an effort to promote a full understanding of the Dues Formula and ensure consistent application of its requirements, this program will work closely with the 113 local AOR’s in California to both educate the members and enforce this long-standing structure. An additional staff person will be hired to manage this effort which is projected to result in an increase of 2,000 members. (Net Revenue: $272,800)

2012 Augmentations (Approved) Funded By RAA

C.A.R. Electoral Services Governmental Affairs This program will research electoral services needed to support C.A.R.’s voter and member contact programs in the areas of research, printing, mailing, media and voter contact services. Focus will be on developing in-house staff resources to provide polling, research and communications in-house with the out-sourcing of mail, print and communications media. Creating C.A.R. Electoral Services with in-house capabilities and external contractors will provide C.A.R. an opportunity to save consulting costs and create a potential new sources of revenue. (Cost: $39,700)

CREPAC: Local Candidates Field Governmental Affairs This program will assist local AORs with the political development of local level candidates and activities, and establish a process for development of future state legislative candidates. It manages the activities of three field staff that will work with the local Associations to recruit local REALTORS® interested in public office and generally assists in involving members in local campaigns and elections. This program is funded 100% from the RAA (REALTOR® Action Assessment) and reflects the purpose and spirit of the fund to increase REALTOR® effectiveness in the political arena at all levels of government. (Cost: $372,100 - funded from RAA)

2012 Augmentations (Approved) Funded By PAF

Political Activities Fund: Member Mobilization Governmental Affairs This program devotes resources to Key Contact/Federal Coordinator Programs, the Broker Involvement Program, Member Mobilization, and Local Advocacy/ Training. Program will provide mentoring, training materials, and additional resources for use in these activities. (Cost: $54,800 - to be reimbursed by PAF)

2012 Budget Summary

2012 Budget Summary (continue)

2012 Capital Budget

Action Items

RECOMMENDATIONS TO EXECUTIVE COMMITTEE AND BOARD OF DIRECTORS 1. To approve a Strategic plan and 2012 budget with the following criteria: a. C.A.R. Operating Revenue of $27,320,800 C.A.R. Operating Cost $26,798,200 Net Surplus (After Investment Income): $522,600 b. Political Activities Fund Revenue $1,461,300 c. Issues Action Fund Revenue $1,461,300 Issues Action Fund Transfer to IMPAC $688,300 d. REALTOR® Action Assessment: $5,698,000 e budgeted C.A.R. staff positions

RECOMMENDATIONS TO EXECUTIVE COMMITTEE AND BOARD OF DIRECTORS (continued) f. Membership dues, including $115 for operating programs, $10 for the Political Activities Fund, $10 for the Issues Action Fund, and $39 for the REALTOR® Action Assessment set at a total of $174 per member (predicated on 2012 year end membership of 154,000) g. New member fee set at $30 per new member

RECOMMENDATIONS TO EXECUTIVE COMMITTEE AND BOARD OF DIRECTORS (continued) h. A 2012 Capital Budget (funded with Association reserves) totaling $226,100

RECOMMENDATIONS TO EXECUTIVE COMMITTEE AND BOARD OF DIRECTORS (continued) 2. To approve for members in areas not serviced by local associations an additional $30 in membership dues. This amount would be in excess of the dues approved for members coming through the local associations.

2011 Augmentation NAR Presidential Campaign This program will enable C.A.R. to pay for certain expenditures and activities related to the election of a California candidate to NAR office during a campaign period of three years or more. (Cost: $23,500)

2011 Action Items 1. That $196,000 be approved for an additional two percent pension contribution to the C.A.R. and REBS employee pension plan for 2011, augmenting the previously approved budget of 10 percent.

Thank-You Questions?