har & hris 2014

2014 Consolidated Annual Budget

1

HAR & HRIS 2014 Consolidated Budget December 2013

Exe

201With hof REBob Hprograhighlig

The 2compExpen

BudgHAR Reve

Expe

Reve

Depre

ReveDepre

In comDues

DuesSalarReveBeneReveTraveReve

ecutive

4: Makeher theme Ma

EALTORS® in Hale, HAR wilams, productsght the exper

2014 Consolidarison to the nses are expe

Total Me Premium

Iget Comparison,Consolidated Bnues

nses

nue over Expen

eciation

nue over Expeneciation)

mparison withIncome, Sala

Budget Size s Revenue ry as a % of nue

efits as % nue

el as a % of nue

2014

e Summ

e it Happake it Happ2014. With hl strive to dels and servicertise and profe

dated Budget prior year budected to incre

201HAR Dues

embership pm Statewide

REALTOR HAR.com

Intellectual ,

Budget

nses

nses (including

h TAR and otharies, Benefits

ASAE AV

$10 MilliMill37.

39.

7.0

3.2

4 Consolid

mary

pen Nowen Now, Chher leadershipiver service, e

es. As the “Voessionalism o

projects Revdget, Total Re

ease by 6.9%

4 Proposs and HARMprojection –Tax and FoValue, Use mobile appProperty L 2012

21,9

22,3

-41

465

-88

her 501c(6) es and Travel E

VERAGE ion to 30 lion 7%

2%

0%

2%

dated Ann

2

w aille Ralph wip team and a excellence anoice of Real Eof its 27,000+

venue over Exevenues are

sed BudgMLS fees re– 27,407 Moreclosure d

A REALTOps developmicensing an

Budget

975,174

392,400

7,226

5,000

82,226

ntities, HAR cExpenses.

TA

$13,5773.

42.

combined

2.5

ual Budge

ill serve as Cdedicated sta

nd knowledgeEstate” in Gremembers.

xpenses of $3projected to i

get Highliemain unchaMLS Subscrdata integra

OR Ad Campment & supnd Data Ana

2013 Budge

23,835,919

23,605,991

229,928

407,000

-177,072

compares fav

AR

72,096 .0%

.8%

w/salary %

5%

et

hair of the Hoaff led by Pre

e through the eater Houston

353,511 beforincrease by 7

ights anged for 2

ribers projecated with Mpaign - $575

pport - $272,alytics - $18

et 201

25

25

3

3

vorably in the

H

$25,540

25

5.

1.

ouston Assocesident and Cassociations

n, HAR will als

re depreciatio7.3% while To

2014 ction – 24,2

MLS – $521,65,000 ,400 80,000

4 Budget

,583,893

,230,380

353,513

350,600

2,913

key categorie

HAR

583,893 0.5%

5.1%

.3%

.9%

ciation EO

so

on. In otal

287 688

es of


3

Department Review and Highlights for 2014 Membership In 2014, HAR’s dues will remain at $132, which represents the 11th year in a row with no increase and which is below the $173 average dues of the 25 largest local REALTOR associations in the country.

DUES Comparison (+ Mandatory Assessments) FY 2003 FY 2014 Change

NAR $84 $155 +84%

TAR $87 $127 +46%

HAR $132 $132 -

HAR’s 2014 Membership is projected to increase slightly to 27,407. HAR represents nearly one third of the REALTOR members in the state of Texas. As the leading local association in the country, it benefits our members to have consistent representation at the state level and national levels. In 2014, HAR will continue to promote and support HAR members for leadership positions at TAR and NAR.

In 2014, HAR will continue to provide programming, networking and encouragement to young professionals in the REALTOR® Community. HAR’s Next Realtor Generation, (NRG) continues to thrive under the coordination of Director of Member Engagement, Roz Crew. HAR’s NRG group was recognized in 2010 by NAR as the Best Young Professional Network chapter in the country and in 2012 received the Golden Hammer Award for its community service day.


4

The HAR NRG 20 Under 40 program recognizes the incredible talents and energy of members, helping HAR to remain connected, involved and relevant to this growing demographic.

MEMBERSHIP 2012 Budget 2013 Budget 2014 Budget

Revenues 9,609,083 10,024,272 10,698,377

Expenses 7,996,090 8,690,208 9,208,118

Revenue over Expenses 1,612,993 1,334,064 1,490,259

HAR’s Member Services staff is available to assist members when they are busiest, on weekends, from 10am – 2pm via online chat. In response to member demand we have added weekend orientation for new members on a monthly basis. To maximize the opportunity to serve the membership, we also now offer basic MLS Training concurrently with the weekend orientation. HAR is fortunate to have such an experienced and dedicated member service team, under the direction of Membership Manager Cynthia Williams, who celebrated 35 years of service in 2013.

MeThrouoppor

UndeConsuexperand te

Pictured

REALmembrecogbest pServiccomm

etings

ugh superior prtunities to me

r the directionumer in 2013rt panel discusechnology too

d: HAR CEO Bob Hale, C

LTOR Celebrabership. Thisgnize our two personifies thce Award. Th

munity, mainly

2014

and Evprogramming embers by sh

n of Lori Carp. The conferessions; the seols. The BIG e

urt Beardsley, Senior VP

ation is our was annual evenmost prestigioe REALTOR his award is gy outside of th

4 Consolid

vents the HAR Meearing timely a

per, HAR’s sigence featuredessions were e was once a

P, realtor.com, Paul Levin

ay to thank bot is also wherous awards: Rin spirit, ethic

given to a memhe real estate

dated Ann

5

etings and Evand relevant i

gnature eventd 17 educatiodivided into tgain the prem

ne, Chief Operating Offic

oard memberre we install tREALTOR ofcs and professmber who hasindustry.

ual Budge

vents Departmnformation be

t, the BIG e, foonal sessions,three tracks : mier real estat

cer, Trulia, Glenn Kelman

rs and officershe newly elecf the Year, whsionalism ands made outsta

et

ment strives teneficial to th

focused on Em, four of whichagent focusete industry ev

nn, CEO Redfin, Greg Sch

s for their yeacted HAR Boahich recognized the John E.anding contri

o offer excepheir career suc

mbracing the h were industed, broker cenvent of the ye

hwartz, Chief Revenue O

ar of service tard of Directoes a member Wolf Commubutions to the

ptional ccess.

try ntric ar.

Officer, Zillow

to the ors and r who unity e


6

HAR’s Leadership Orientation is an annual program designed to bring newly elected board members and appointed advisory group leaders together for an industry update as well as to explain their duties as an HAR leader.

HAR’s Past Presidents Advisory Group meets annually to honor the service of past HAR leaders while also serving as a means of keeping these influential visionaries active and involved with the progress of the association. The HAR Strategic Planning conference brings the insights of nationally recognized industry experts to the HAR Board of Directors and senior staff for a dynamic two day session. The format provides the opportunity for intensive discussions on the future of the industry and as well as a collaborative evaluation of opportunities to deliver greater value to members.

The HAR Events team also takes charge of adhoc events and creates the perfect atmosphere for honorees and those in attendance.

MEETINGS & EVENTS

2012 Budget 2013 Budget 2014 Budget

Revenues 231,588 123,950 136,000

Expenses 695,873 614,052 639,574

Revenue over Expenses -464,285 -490,102 -503,574

Allocation to MLS -69,500 -41,875 -41,875

Revenue over Expenses after Allocation -394,785 -448,227 -461,699


7

International In 2013, the HAR International Advisory Group, under the leadership of Lori Caper, received the NAR Global Operations Platinum Award. This prestigious recognition spotlights HAR efforts to promote global and multicultural real estate business opportunities throughout the Houston Market. These efforts included:

• Offering the 5 day Certified International Property Specialist (CIPS) Institute

• HAR was subsequently awarded the CIPS Course of the Year by NAR Global

• Hosting a CIPS networking reception for future and current designees. HAR has 56% of the state’s CIPS designees as members.

• Three “Around the World in 60 Minutes” lunch and learn seminar series, all of which sold out

• Partnered with the Medical Center Ronald McDonald House to provide dinner for ill children and their families from all over the world.

• Produced market update videos for Mexico, The United Kingdom, Canada, France, Brazil and China with HAR TV.

• Changed the design and the focus of the HAR.com international page to be a relocation and investment portal for those interested in moving to or investing in Houston real estate.

• HAR has more than 6,300 members who are fluent in 94 languages. The HAR International website includes the ability for members to identify languages spoken and culture specialization on HAR.com, as well as search hundreds of international properties for sale on HAR.com in Spanish, French, German, Chinese, Italian and Vietnamese. The website also contains links to information on real estate transactions in more than 40 countries.

In 2014, HAR will continue to identify and develop relationships with local institutions of higher learning, successful international companies, chambers of commerce and foreign consulates as well as provide specialized programming designed to educate members on how to conduct business internationally.

INTERNATIONAL 2012 Budget 2013 Budget 2014 Budget

Revenues 0 0 0

Expenses 37,005 37,372 37,919



8

Communications Under the direction of Matt Burrus, HAR’s 2014 Member Marketing and Communications initiatives will continue to identify, employ and validate those communications practices that will effectively build powerful relationships, help members build trust and respect for each other, the public and the Association. They will also foster learning, accomplish common goals and facilitate the understanding necessary to make decisions for effective change.

HAR renewed its TV advertising campaign in 2013, which had not been live for the previous four years. The ads that were broadcast on a variety of targeted Comcast cable channels focused on using a REALTOR® in a transaction and trying to encourage people on the fence to list their home for sale. The HARTV department collaborated with Communications to produce the advertisements in house, which saved literally tens of thousands of dollars in production costs. The low inventory levels seen in 2013 drove much of the Association’s advertising efforts throughout the year and will likely to continue to be the case into 2014. We have consistently purchased online ads on other sites and will likely continue to shift more of our advertising dollars to online from print.

There was not only a focus on paid advertising to deliver the member message, as the “earned media” (or public relations) was extremely active in keeping HAR and REALTORS® at top of mind for home buying, selling or leasing consumers. Coverage was generated in a wide variety of print and online publications across the country and even internationally. Proactive pitches usually included the strength of the Houston real estate market and always reinforced the need to use a REALTOR®.


9

In addition to our weekly Five Minute REALTOR® newsletter, which links back to our HARConnect.com communications hub, we also have The Edge, which is probably the most effective communications product and is used by sales managers and brokers during their weekly sales meetings.

HAR’s Communication team also manages all advertising and sponsorship agreements for events, publications and HAR.com. Revenues for 2013 have continued to improve, as the strength of the Houston real estate market continued to see ad spends from builders and developers in the print and online HAR publications. Additionally, online advertising revenue for HAR.com reached nearly $100,000 per month at the end of the year, with additional upgrades and tweaks expected to allow that figure to be consistent into the coming year. Premier sponsorship agreements with Reliant Energy and Memorial Hermann Healthcare System added even more to that revenue total.

As with all issues, whether local, state or national such as the Mortgage Interest Deduction, REALTOR® Safety, taxes on real estate commissions or local vs. national market conditions, HAR must work to present the most timely and effective communication of our REALTOR® position to governmental agencies, elected officials and consumers. It is vital that we monitor, analyze and leverage effective communication strategies to positively influence these critical issues. We have engaged with consumers through the HAR Consumer Research Panel and have begun using the newly-developed, weekly HARtbeat newsletter to provide real estate and economic news of interest to consumers. When there is a need to utilize that communications channel for public advocacy efforts, then it will allow us to broaden our strength beyond just our membership ranks into the homeowner ranks as well.

COMMUNICATIONS 2012 Budget 2013 Budget 2014 Budget

Revenues 270,000 340,000 290,000

Expenses 742,940 737,141 758,318


Allocations to MLS -310,627 -311,671 -311,671



10

Professional Development In 2014, HAR’s Professional Development Program, guided by Rita Klein Blevins will again offer the most popular designation courses such as CRS, GRI, ABR, CIPS, BPOR, CNE, ePro, CSSN, SRES, TAHS, RSPS and the NAR Green designation.

The immensely popular Management Central series continues to produce the highest quality, most well-attended networking and training opportunities for members with topics ranging from Broker Profitability, Risk Management, Contracts and Consumer Preferences.

In 2013, HAR’s Professional Development team was once again recognized by TAR for Outstanding Programming. The HAR Social Media Pro (SMP) course, Management Central, “Legally Speaking Series” and HAR Member Outreach program each represent the best of class programming that has created an outstanding benefit for HAR members.

Additionally, the Texas REALTORS Leadership Program by HAR continues to receive praise from members. Over 75% of the participants in the TRLP have returned to serve the membership through an HAR Advisory Group, a Task Force, the HAR Board of Directors or through the various Legacy Projects. Admission to the program is limited to full time real estate professionals and the bonds and camaraderie of each group will have a powerful, positive and lasting impact on the Association. Specifically, the H-Town program has become a highlight of the year, bringing together HAR leaders with business and political leaders from the entire community.


11

The training and member profitability department delivers MLS Tempo and Fusion training classes, which are approved for MCE credit, as well as live and online training for all of HAR’s technology tools. Onsite training on the entire suite of HAR Technology Tools is available upon request for offices.

PROFESSIONAL DEVELOPMENT


Revenues 371,580 355,480 362,976

Expenses 578,021 507,821 505,538


Governmental and Political Affairs HAR’s Governmental and Political Affairs department has geared up for an active year in 2014. For all of its efforts, HAR is well respected and connected to local, state and national leaders to ensure that when decisions are made on the local level, they are made with consideration to the impact on REALTORS and the real estate economy. Our Governmental Affairs Advisory Group (GAAG) keeps a close eye on legislation and local ordinance policy that would affect the way our Realtors conduct their business, and the way Houston area homeowners preserve and protect their property rights.


12

In addition to policy worked conducted on the local, state and national levels, HAR’s Political Affairs Advisory Group (PAAG), Political Affairs Advisory Leadership (PAAL) volunteers throughout the Bay Area, Fort Bend and Montgomery Counties will once again spend numerous hours interviewing candidates that will serve The REALTOR Party on behalf of the Houston region. Once the candidate has been chosen and approved by the HAR Board of Directors, each PAAL group promotes the candidates to their colleagues

through networking events, personal meet-and-greets and online tools (such as social media and email). The role of HAR’s Governmental Affairs volunteers groups does not end with the election though – each member is tasked with continuing the REALTOR message and relationship with the elected officials past the campaign.

In our ongoing effort to reach out to the HAR.com consumer, in 2013 the HAR Governmental Affairs team developed a consumer news aggregate site dubbed, “HARtbeat - Providing the Pulse of the Greater Houston Area”. The website incorporates an optional weekly newsletter, which is sent on Friday afternoons. The purpose of this service is to provide HAR members and consumers with current information about what is happening in the Greater Houston area, ranging from real estate, economic, infrastructure, governmental initiatives, commercial development, and Houston’s rankings on the national level. In doing so, it will be easier to reach out to them when issue of importance arise, such as preserving the Mortgage Interest Deduction, Flood Insurance reauthorization, etc.


13

For HAR’s Chief Political Strategist Dana Kervin, 2013’s “Year of the Consumer” also brought together for the first time a mobile app, Houston Living, which is a partnership between HAR and the City of Houston. Important to the real estate industry, the app will link to HAR.com and real estate news valuable to property owners (and those who hope to be) in the City of Houston. Houston Living is a free app that provides GPS location-based government information including local elected official bios, nearby neighborhood organizations, city services and public transportation, to name a few. It also provides users with nearby homes for sale and links them back to HAR.com for more details.

TRIn 201proceDriscocontri

UtiliziBring

A newinvest

PUBL

Reve

Expe

Reve

EPAC 13, HAR contess alongside oll, and with tbutions.

ng a Peer-to-One” VIP eve

w TREPAC lotment” minds

LIC AFFAIRS &

nues

nses

nue over Expen

2014

tinued to reinfissues advoche assistance

-Peer Approacents, capped

go and messet among the

TREPAC

nses

4 Consolid

force the key cacy and cande of the dedic

ch to target mby an evenin

aging is also e membership

2012 Bu

0

783,1

-783,1

dated Ann

14

message thadidate recom

cated TREPAC

major investorng at Tony’s w

being utilizedp.

udget 2

50

150

ual Budge

at TREPAC plmendations. C trustees, H

rs, in 2013 HAwhich raised o

d to further cu

2013 Budget

0

795,650

-795,650

et

lays a vital ro Under the leAR raised a r

AR held a serover $86,000

ultivate a “TRE

2014 Bud

0

815,55

-815,55

le in the politiadership of Krecord $666,8

ries of “Be Ondollars.

EPAC is a bu

dget

51

51

ical Karen 812 in

ne,

usiness


15

Branch Operations The 2014 budget reflects the consolidation of operations, staff, programs, and services for HAR’s three satellite locations, (Montgomery County, Fort Bend and Bay Area). Under the leadership of Rhonda Flowers, the HAR Branch office locations provide convenient access to HAR & HRIS services. A portion of the branch operating expense is allocated to HRIS.

The association owns the Fort Bend Office and maintains lease space for the Bay Area and Montgomery County branches. The Bay Area lease will expire in July 2014 while the Montgomery County lease will expire in November of 2014. Negotiations with current and prospective locations are ongoing.

BRANCH OPERATIONS


Revenues 0 0 0

Expenses 1,128,567 1,200,817 1,225,326

Revenue over Expenses -1,128,567 -1,200,817 -1,225,326

Allocation to MLS -677,140 -720,490 -735,196

Allocation to Membership -451,427 -480,327 -490,130

Revenue over Expenses after Allocations 0 0 0

Administration and Building

Controller Tracy Goodeaux and the accounting team prepare monthly financial statements for management review which are presented to the HAR Board of Directors by HAR’s Secretary/Treasurer at their regularly scheduled monthly meetings. The statements are also posted to the member’s only area of the website.

Each year, the association conducts a full financial audit, which includes an onsite, detailed review of the HAR and HRIS finances. The audit is conducted by a local independent CPA Firm, Harper & Pearson, in accordance with the Generally Accepted Audit Standards as promulgated by the Auditing Standards Board of the American Institute of Certified Public Accountants. The final audit results and any recommendations to management are presented directly to the HAR Budget and Finance Committee by a principal of the CPA firm. In 2013, HAR’s consolidated financial statements once again received a full, unqualified opinion by our outside independent CPA firm, which is the highest rating possible.

HAR’s internal Information Systems and Network Administration cover over 125 personal computers, 43 server instances, a wide area network (WAN) for satellite offices, PBX system with IP enabled phones, local area networks (LAN) in each location, disaster recovery, 24 network appliances (firewalls, VPN’s, routers, switches) and over twenty printers. The 2014 budget includes funding for 1 additional network engineer bringing the total staffing to 3.

In 2013, HAR began an extensive review of telephony options in anticipation of an upgrade to our phone system. Our existing system, purchased in 2003 and fully depreciated, is no longer in production which is making it increasingly difficult and expensive to acquire


16

replacement parts, upgrades and even routine maintenance. It is anticipated that a capital investment of $142,000, which was approved in 2013, will be made in 2014.

ADMINISTRATION 2012 Budget 2013 Budget 2014 Budget

Revenues 184,300 179,300 176,300 Expenses 520,224 424,826 492,540 Revenue over Expenses -335,924 -245,526 -316,240 Depreciation 175,000 157,000 125,500 Revenue over Expenses (including Depreciation) -510,924 -402,526 -441,740

The HAR Main Office serves as the Associations primary meeting venue for members. The building recently received new A/C package units (2013), foundation repair (2013) and energy efficient lighting (2012,2013) and should require only routine maintenance in 2014. No major renovations or capital expenses are expected.

BUILDING 2012 Budget 2013 Budget 2014 Budget

Revenues 0 0 0 Expenses 17,033 18,444 36,272 Revenue over Expenses -17,033 -18,444 -36,272 Depreciation 150,000 150,000 150,000 Revenue over Expenses (including Depreciation) -167,033 -168,444 -186,272


17

Houston REALTORS Information Service Multiple Listing Service (MLS), Data & Technology HAR’s MLS, Data & Technology initiatives have been recognized at the local, state and national levels for their outstanding achievements. Our MLS Platform is designed to enhance broker and agent profitability by providing a cost effective solution to facilitate the sale and lease of listed properties. For the eleventh consecutive year, HAR MLS subscription fees will remain unchanged for HAR members. In fact, since 1997, MLS fees have actually been reduced by $5 per month. Consider all that the HAR platform has to offer.

• MLS - TEMPO –Under the direction of Shawn Dauphine, HAR’s core MLS system, TEMPO, provides the ability to enter and search listings. With enhancements completed earlier in 2013, the enhanced TEMPO format now works natively with Apple products such as the MacIntosh, iPad and iPhone, and also works with additional web browsers such as Google Chrome, Safari and Firefox. The system also includes training, evening and weekend technical support provides the framework for cooperation and compensation between participants and subscribers which promote an efficient and orderly market.

• MLS – Public Records - Integrated seamlessly within the TEMPO system is also a public records database of all properties in the state of Texas. Provided by Corelogic, the new Realist statewide tax system will include enhanced functionality as well as additional data sets such as foreclosures, distressed properties and off-market tax records that are not listed in the MLS.

The intuitive user interface allows users to view search results in a grid view, map view or split screen displaying the map and grid. The grid gives users full control over column sorting, column reordering and adding/removing columns from grid results as well as the ability to select and narrow down search results. Users can print or email reports, export property records to Excel or create mailing labels.

•

•

•

•

MLS - Datand displasupport to

MLS – ETSbrokerages

MLS - HARnumber onpublic facinwhile assispublic comconsumersto resell traevolving ne

MLS - Meincreasing

2014

ta QA – Nathyed within themembers ne

S Transactios with no ong

R.com– Undene rated websng portion of sting with the

mpanies contins, HAR.com caffic to the higeeds of mem

ember Tools value to the

4 Consolid

han Goble ande MLS are in eding assista

on Managemgoing support,

er the guidansite in Texas. HAR.com, plasale and leas

nue to spend continues proghest bidder abers.

– With a onereal estate co

dated Ann

18

d the QA teamcompliance w

ance on data c

ent - Transa, data retentio

enrollmfirms) managbecomof con

ce of CTO Ta With more thays a powerfuse of listed prmillions to catecting and das well as pro

e-of-a-kind moommunity whi

ual Budge

m work hard twith all MLS rcompliance is

action Managon or per file tment fee of $5can improve gement and a

ming more ressumers.

aqi Rizvi, HARhan 2 million ul role in promroperties. As apture the heaefending mem

oviding econo

obile app, HAich helps to k

et

to make sure rules and alsossues.

gement is provtransaction fe500 per firm (broker profita

agent recruitmsponsive to th

R.com continuunique visitor

moting the vathird party w

arts and mindmbers from thomical solutio

AR continues keep HAR me

the data cono provide valu

vided to all ees. A single ($350 for smaability, risk ment, all whilehe evolving de

ues to thrive ars per month,lue of REALTebsites owne

ds of real estahird parties wns to meet th

to provide evembers conne

tained uable

all

e emands

as the , the TORS ed by ate ho seek e

ver ected


19

and top of mind on all matters real estate. HAR also provides mission critical applications to members in the form of a web presence for 1,485 brokerages and more than 19,583 agents. Additional systems such as Appointment Manager, Lead Call, STAR Report, Market Insight Report and Member Blogs have all been designed and delivered by HAR’s in-house web development team to provide needed functionality with no additional cost to subscribers.

Promoting REALTOR® Value –The 2014 Budget reflects a total commitment of $575,000 to this critical objective with priority given to channels with the highest ROI, including billboard advertising, web/social media ads and targeted print ads in traditional media outlets. Our website, mobile app and accompanying promotion serve as a constant reminder to consumers of the value and benefit of using a REALTOR.

HAR.costs membreven In 201Livinglocal ncollab

Conswinninand reidentifserviceffect

Whenare sewhile

MLS,

Reve

Expe

Reve(inclu

com Financiby providing

bers. In 2014nue which wor

13, HAR receg App. In partnews media a

boration and e

sumer Reseang website, Heal estate confy trends, pre

ces. Additiontiveness on ite

n compared toecond to nonethe dues and

DATA & TECHN

nues

nses

nue over Expenuding Depreciat

2014ial Support –direct referra

4, HAR.com isrks as a direc

eived a $25,00tnership with as well as on engagement l

rch - In additHAR.com alsonsumers. W

eferences andally, a dialoguems of interes

o other large Me. Since 199d fees of NAR

NOLOGY

nses ion)

4 Consolid– HAR.com anals, leads and s projected toct offset to tho

00 Game Chathe City of HoInman Newsocal associat

tion to the mao provides a p

With an engagd expectationsue with currenst to REALTO

MLS’s around7, the combin

R and TAR ha

2012 Bu

9,813,9

9,831,8

-17,93

dated Ann

20

nnually savesclick through

o earn over $1ose expenses

anger Award fouston and Mand hailed by

tions can ach

any productivitplatform for bued sample ofs which can hnt and future ORS such as

d the country,ned HAR Dueve risen by 14

udget 2

912

850

38

ual Budges members mhs in addition 1.9 million in as related to the

from NAR forMayor Annise

y NAR as a wieve.

ty enhancing uilding an ongf Houston arehelp shape futhomeownersprivate prope

, the productses and Fees h42% and 74%

2013 Budget

11,422,542

10,719,386

703,156

etmore than $16

to the tools itadvertising ane public facin

r the developmParker, the a

wonderful exa

tools providegoing dialoguea consumersture programs can help to i

erty rights and

s and serviceshave actually %, respectfully

2014 Bud

12,326,2

11,509,1

817,09

million dollart delivers for nd sponsorshg portion of th

ment of the Happ was featuample of the ty

ed through oue between Re

s, HAR is ables, products ancrease our

d flood insura

s delivered bybeen loweredy.

dget

240

148

92

rs in

hip he site.

Houston red on ype of

ur award ealtors e to nd

nce.

y HAR d by 5%


21

Houston REALTORS Information Service Commercial Gateway Commercial Gateway, HAR’s Commercial Information Exchange (CIE) continues to thrive as the largest Realtor-Owned CIE, with over 1,500 broker/agent members. Commercial professionals from Houston’s largest and most recognized firms share information with smaller independent firms and all of them have come to rely on Commercial Gateway for timely, accurate researched information. Partnering with the Houston Business Journal, the Commercial Gateway team, led by Sam Scott, produces and publishes the Houston Office and Leasing Guides, which showcase our broader, deeper and more informative analytics. In 2012, Commercial Gateway’s primary vendor, ePropertydata (ePD), was acquired by Xceligent Inc. who seeks to create a competitive alternative to the CoStar+LoopNet merger. Our existing service agreement with ePD remains in force and negotiations with Xceligent for extending our agreement are ongoing. As a national platform, Xceligent offers a cost effective option to expand our members’ access to information about commercial properties across Houston and other markets of interest.

It is anticipated that Xceligent and Commercial Gateway will offer multiple service levels in the Houston area:

• CommercialSearch.com – CommGate is finalizing its participation in this national search site that will be operated in a manner similar to LoopNet’s older “Premium” business model, pay to have a listing seen by all, or pay to be able to search all listings. CommGate’s members will get special treatment bundled with their CIE membership.

• Commercial Gateway – Availability Search for members. Includes some local research data, including listed for lease and for sale properties.

• National CDX – Xceligent’s “National” researched service offering that includes complete access to researched data on all Xceligent markets across the nation

The 2014 Budget reflects a continued commitment to the success of HAR’s Commercial members. It is anticipated that CIE participation will remain consistent with prior years, provided however that as


22

Xceligent’s other products are launched and adopted we may see some attrition as CIE customers migrate to the other products. The diminished membership will be offset by a revenue share back to HAR for CIE members who move to the new Xceligent services. HAR’s overall commercial service offering will be enhanced by integration with the Xceligent platform that will provide a basis for increased networking and recognition programs. Given the still pending nature of the proposed agreement, we have projected a modest increase in vendor expense for 2014. It may be necessary to phase in alternative pricing models in order to offset any increases in vendor expenses.

COMMERCIAL GATEWAY 2012 Budget 2013 Budget 2014 Budget

Revenues 577,711 590,375 644,000

Expenses 711,609 599,790 615,290

Revenue over Expenses -133,898 -9,415 28,710

Houston REALTORS Information Service Super Center The HAR Super Center continues to provide an incredible convenience, benefit and value for members. The main location at HAR Central is our flagship store and also serves as the distribution center for our three branch locations. More than 1,200 products are available for purchase, both instore and online. HAR’s considerable buying power and negotiation experience allow us to provide the most popular products needed by members at the best possible prices.

Under the leadership of Dennis Burrows, Total sales have risen dramatically in 2013 and gross margins have remained strong. The 2014 Budget has been adjusted in keeping with trends realized in 2013 and the healthy market outlook.

SUPERCENTER 2012 Budget 2013 Budget 2014 Budget

Revenues 917,000 800,000 950,000

Expenses 1,001,481 914,848 1,040,759



23

HOUSTON ASSOCIATION OF REALTORSCONSOLIDATED STATEMENT OF REVENUES AND EXPENSESFOR THE MONTH ENDINGBudget 2014

Fiscal Fiscal Projected FiscalHRIS, INC. FOR PROFIT SUBSIDIARY Year 2012 Year 2013 FY 2013 Year 2014

Actual Budget Actual BudgetREVENUES-HRIS, INC.MULTIPLE LISTING SERVICE 9,813,912 11,422,542 11,597,342 12,326,240 COMMERCIAL INFORMATION EXCHANGE 577,711 590,375 645,398 644,000 REALTOR SUPERCENTER 917,000 800,000 949,983 950,000

TOTAL REVENUES--HRIS, Inc. 11,308,623 12,812,917 13,192,723 13,920,240

EXPENSES-HRIS, INC.MULTIPLE LISTING SERVICE 9,691,850 10,619,386 10,490,170 11,434,048 COMMERCIAL INFORMATION EXCHANGE 711,609 599,790 552,704 615,290 REALTOR SUPERCENTER 1,001,480 914,848 1,034,462 1,040,759

TOTAL EXPENSES BEFORE DEPRECIATION--HRIS, INC. 11,404,939 12,134,024 12,077,337 13,090,096

REVENUE OVER EXPENSES BEFORE DEPRECIATION--HRIS, INC. (96,316) 678,893 1,115,386 830,144

DEPRECIATION EXPENSE 140,000 100,000 65,328 75,100

REVENUE OVER EXPENSESWITH DEPRECIATION AND TAXES--HRIS, INC. (236,316) 578,893 1,050,058 755,044

HAR, INC.-NON-PROFIT PARENT

REVENUES - HAR, INC.MEMBERSHIP 9,609,084 10,024,272 10,807,092 10,698,377 MEETINGS & EVENTS 231,588 123,950 141,794 136,000 MEMBER COMMUNICATIONS 270,000 340,000 289,100 290,000 PROFESSIONAL DEVELOPMENT 371,580 355,480 400,284 362,976 ADMINISTRATION 184,300 179,300 187,797 176,300 FORT BEND BRANCH OFFICE - - - - BAY AREA BRANCH OFFICE - - - - MONTGOMERY BRANCH OFFICE - - - - TOTAL REVENUES - HAR, INC. 10,666,552 11,023,002 11,826,068 11,663,653

EXPENSES - HAR, INC.MEMBERSHIP 7,996,090 8,690,209 9,023,428 9,208,118 INTERNATIONAL SECTION 37,005 37,372 38,257 37,919 MEETINGS & EVENTS 626,372 572,177 566,280 597,699 MEMBER COMMUNICATIONS 432,313 425,469 410,177 446,647 PUBLIC AFFAIRS 783,150 795,650 764,155 815,551 PROFESSIONAL DEVELOPMENT 578,022 507,821 560,235 505,538 BUILDING 17,032 18,443 43,625 36,272 ADMINISTRATION 520,225 424,826 545,271 492,540 FORT BEND BRANCH OFFICE - - - - BAY AREA BRANCH OFFICE - - - - MONTGOMERY BRANCH OFFICE - - - - TOTAL EXPENSES BEFORE DEPRECIATION 10,990,209 11,471,967 11,951,428 12,140,284

REVENUE OVER EXPENSESBEFORE DEPRECIATION--HAR, INC. (323,657) (448,965) (125,360) (476,631)

DEPRECIATION - FURNITURE & EQUIPMENT 175,000 157,000 109,557 125,500 DEPRECIATION - BUILDING 150,000 150,000 140,827 150,000

REVENUES OVER EXPENSES WITH DEPRECIATION--HAR, INC. (648,657) (755,965) (375,744) (752,131)

CONSOLIDATED REVENUES 21,975,175 23,835,919 25,018,792 25,583,893 CONSOLIDATED EXPENSES 22,395,148 23,605,991 24,028,765 25,230,380 CONSOLIDATED NET INCOME (LOSS) BEFORE DEPRECIATION (419,973) 229,928 990,027 353,513 CONSOLIDATED NET INCOME (LOSS) AFTER DEPRECIATION & TAXES (884,973) (177,072) 674,315 2,913

har & hris 2014

Documents