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2012 Strategic Plan
Don Faught, 2011 TreasurerSpecial Executive Committee MeetingAugust 30, 2011.
2011 SPF Committee
John Pinto, Vice ChairTracey Saizan, Vice ChairDavid Barca, Committee LiaisonGene BinsbacherCynthia CarleyLinda CarrollLiz ClausJill FurtadoBob HartBill Jansen
Shannon KingBob KulickJames LinkJared MartinKay MooreAnn PettijohnJeff PhillipsDavid WalshSue WalshJohn Wong
Don FaughtChairman
SPF at Work: August 2011C.A.R. Headquarters
2011 Committee HighlightsUrgency 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 ChallengeReal Estate 2050 Sci Fi thriller
Value-added Input2011 Membership Survey2011 New Member Panel – year 3Fireside 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
Marshmallow Challenge
Marshmallow Challenge
Marshmallow Challenge
Books
2011 SPF Book Selections
VIDEOS
2011 VideosTed Talk: Simon Senak
How Great Leaders Inspire Action
Ted Talk: Tom Wujac The Marshmallow Challenge
“Inside Job” – Best Documentary http://www.sonyclassics.com/insidejob/
Socialnomics ROIhttp://www.youtube.com/watch?v=ypmfs3z8esI
“Network” – I’m Mad as Hellhttp://www.youtube.com/watch?v=q_qgVn-Op7Q
2011 Videos
Whatever It Is – I’m against It! - Groucho Marxhttp://www.youtube.com/watch?v=xHash5takWU&NR=1
Get the information - Jim Rohn http://www.youtube.com/watch?v=_TjXy2pJXJI
Fireside Chat – FDRhttp://www.youtube.com/watch?v=PXY7TkrPPzI
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?
Program to get listings, virtual tours, etc. on social media
41%
Teach how to use quick response technology for clients' and prospects' smart phones
32%
Help on how to take advantage of social media 30%Programs on how to get barcodes, smart phones, smart phone app's, social media, listings to work to together
25%
C.A.R. group rate discounts for E&O insurance 22%
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?
Develop smart phone apps that link to my social media
18%
Streamline REO and short sale paperwork (all banks have different procedures)
18%
Education on how to better use social media 17%Get smart phones, social media, listings, etc. to work seamlessly together
15%
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?
Medical insurance, better access to same 14%Offer online, webinar, Internet conference call training about how to better use zipLogix
14%
Programs on how to let potential buyers instantly access listings and social media
14%
Offer zipLogix (for e- signing) 13%Programs on how to better leverage smart phone apps
13%
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?
Learn how to use bar code apps for listings & for sale signs
10%
Retirement plans 10%Better enforcement of Code of Ethics 9%Simplify, streamline all forms 8%Help make my businesses web site more effective, difficult to do on my own
8%
21
REALTOR® Rating Programs
Yes No
Are you aware of REALTOR® ratings programs?
42% 58%
Would you be interested in a REALTOR® rating program?
27% 73%
53% of those aware of rating programs are interested in them. (N = 334)
22
Greatest Opportunities in 2011
Incorporate use of social media 40%
Quick response technology for clients' and prospects' smart phones [apps like QR (Quick Response codes) , QuickMark, Biz Barcode]
27%
More opportunities to cultivate, nurture past clients 27%
Get listings, virtual tours, etc. on social media 21%
Better ways to market properties on the Internet 20%
Getting different technologies to work together 16%
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.)Better job of staying in touch with past clients and prospects 15%
Back to the basics (regular buyers with solid down payments and real income)
14%
Getting back to working with regular people (as opposed to REO's and short sales)
14%
Commissions should increase (low commissions with REO's and shorts starting to decline)
13%
Buyers are not concerned about prices continuing to decline 13%
Equity sales (i.e., real down payments, real income) 13%
Increase hours worked per week 12%
Q: What do you anticipate will be your greatest opportunity in your real estate business over the next year?
24
Greatest Challenges in 2011
Mortgage financing is very difficult 44%
Lack of buying urgency because prices unlikely to go up 40%
How to use, take advantage of social media 33%
Get listings, virtual tours, etc. on social media 32%
Getting sellers to price realistically 29%
Getting different technologies to work together 28%
How to integrate smart phones, listings, social media 26%
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.)
Slow market 23%
Especially difficult to qualify investors for financing 21%
Mortgage interest rates increasing, this decreases the number of buyers
20%
Lenders tracking credit changes, purchases hits right up to closing (reduces certainty of mortgage)
19%
How to use quick response technology for clients' and prospects' smart phones [app's like QR (Quick Response
17%
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
Learn how to use smart phones, smart phone app's, social media to increase sales
34%
Incorporate use of social media 31%
Increase marketing to former clients 31%
Get listings, virtual tours, etc. on social media 27%
Increase time spent on marketing 25%
More aggressively asking for referrals 21%
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?
93%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1995 1996 19971998 1999 20002001 2002 20032004 20052006 2007 20082009 2010 2011
Why Members Believe Organized REHelps 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)
Legal advice 44%
Impacts legislation impacting REALTORS® 44%
Economic and market information 41%
Trying to rein in lenders 38%
Publications 35%
Lobbying 31%
Why Members Believe Organized REHelps 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)
Working to improve lender practices 27%
Market updates 25%
Training 20%
Helps promote a professional image of REALTORS® 20%
Need an organization at the State level to deal with real and potential changes in Sacramento
19%
Why Members Believe Organized REHelps 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)
Need an organization at the State level to identify and track laws, regulations that impact clients and/or my business
16%
Forms 13%
WINForms®/zipForm® 6 11%
Online access for documents, forms 7%
Never function without it 7%
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 Hotline 1. zipForm® 6
2. Helping you stay current on trends 2. Legal Hotline
3. ca.realtor.com, realtor.com, move.com 3. car.org
4. CRE Magazine 4. Business Meetings
5. Legal services 5. Legislative advocacy
6. Government advocacy 6. Red Alerts/Calls-for-Action
7. Develop, introduce & advocate C.A.R.-sponsored legislation
7. Housing market forecast
8. Government affairs 8. Standard Forms
9. Advertising/promoting REALTORS® 9. Legal Q&A
10. zipForm® 6 10. Economic outreaches
Themes for 2012
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. SalesMembership follows Sales with a 2-Yr Lag
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
500,000
550,000
600,000
650,000
19
71
19
73
19
75
19
77
19
79
19
81
19
83
19
85
19
87
19
89
19
91
19
93
19
95
19
97
19
99
20
01
20
03
20
05
20
07
20
09
Membership Home Sales
Sales Peaks: 1978, 1988, 2004-05Membership: 1980, 1990, 2006
Source: CALIFORNIA ASSOCIATION OF REALTORS®
Membership – SPF Projections and Actual
162170173184
0
50
100
150
200
250
2008 (Aug 07) 2009 (Aug 08) 2010 (Aug 09) 2011 (Sep 10)
Worst Case Most Likely Best Case Actual
Source: CALIFORNIA ASSOCIATION OF REALTORS®
Year (Date of SPF Projection)
172 158 158 168
Membership Scenarios Through 2013August 1, 2011 Forecast
100,000
110,000
120,000
130,000
140,000
150,000
160,000
170,000
180,000
190,000
20
08
20
09
20
10
20
11
f
20
12
f
20
13
f
Worst Case Best Case Most Likely
Source: CALIFORNIA ASSOCIATION OF REALTORS®
Membership Outlook – 2011-13
Status 2006 2007 2008 2009 2010 2011f 2012f 2013fRenewals 162.8 176.7 162.0 149.5 149.0 143.0 136.0 134.0New 48.4 31.3 21.8 23.6 21.2 19.0 18.0 18.0Total 211.3 208.0 183.8 173.1 170.2 162.0 154.0 152.0
Status 05-06 06-07 07-08 08-09 09-10 10-11 11-12 11-12Renewals 14.2% 8.5% -8.3% -7.7% -0.4% -4.0% -4.9% -1.5%
New -5.8% -35.3% -30.4% 8.3% -10.2% -10.4% -5.3% 0.0%
Total 8.9% -1.5% -11.6% -5.8% -1.7% -4.8% -4.9% -1.3%
05-06 06-07 07-08 08-09 09-10 10-11 11-12 11-12
Retention Rate
84% 84% 78% 81% 86% 84% 84% 87%
C.A.R. Membership Counts (thousands)
C.A.R. Membership Percentage Changes
Source: CALIFORNIA ASSOCIATION OF REALTORS®
Forecast Date: August 2011
2012 ProposedAugmentations
Program NameRevenue
($)Cost ($) Net ($)
Local Forms - 35,600 (35,600)
REALTOR® Rating Pilot - 78,200 (78,200)
REALTOR® Rating Pilot 360 - 15,400 (15,400)
NAR Variable Dues Formula 368,000 86,700 281,300
Total Proposed Augmentations 368,000 215,900 152,100
2012 Proposed Augmentations (Approved)Funded by Dues
Local FormsMember 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 ProgramStrategic 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 360Strategic Planning and Finance
REALTOR® Rating 360 -- 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 (www.rating-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 FormulaMembership
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: $272,800)
Program NameRevenue
($)Cost ($) Net ($)
C.A.R. Electoral Services 39,700$ 39,700$ -
Local Candidate Field Program 372,100 372,100 -
Total proposed augmentations 411,800$ 411,800$ -
2012 Augmentations (Approved)Funded By RAA
C.A.R. Electoral ServicesGovernmental 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 FieldGovernmental 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: $372,100 - funded from RAA)
Program NameRevenue
($)Cost ($) Net ($)
Member Mobilization 54,800$ 54,800$ -
2012 Augmentations (Approved)Funded By PAF
Political Activities Fund: Member MobilizationGovernmental 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)
Net from Core Operation $ (20,753,900)
REBS Transfer 2,000,000
Dues (154,000 members at $115 per member) 16,804,400
New Member Fee (18,000 members) $30 540,000
Late Renewal Fee (6,000 members) $30 180,000
Investment Income 1,600,000
Net Proposed Budget Before Augmentations 370,500$
2012 Budget Summary
Net Proposed Budget Before Augmentations 370,500$
Proposed Augmentations Approved
Local Form (35,600)
REALTOR® Rating Pilot (78,200)
REATOR® Rating Pilot 360 (15,400)
NAR Variable Dues Formula 281,300
Net Propsed Augmentations 152,100$
Net Including Augmentations Approved 522,600$
2012 Budget Summary (continue)
Description Cost ($)
Hardware/Software 159,300
Furniture 11,300
Building 20,500
Contingency 35,000
Total 226,100$
2012 Capital Budget
Action Items
RECOMMENDATIONS TO EXECUTIVE COMMITTEE AND BOARD OF DIRECTORS
• 1. To approve a 2012-2014 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):
$522,600b. Political Activities Fund Revenue
$1,461,300c. Issues Action Fund Revenue $1,461,300 Issues Action Fund Transfer to IMPAC
$688,300d. REALTOR® Action Assessment:
$5,698,000 e. 128.5 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 AugmentationNAR 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-YouQuestions?
