1. The Future of Affiliated Business Arrangements: How to Protect Mortgage, Title, Insurance Revenue…and More Keynote Speaker: Ken Trepeta – Director of Real Estate Services, National Association of REALTORS® Moderator: Ed Krafchow – Chairman & CEO, Better Homes and Gardens Real Estate Mason-McDuffie Panelists: Merle Whitehead, President & CEO, Realty USA Joan Docktor, President, Berkshire Hathaway HomeServices Fox & Roach, REALTORS® Richard L. (Dick) Schlott, Chairman & CEO, Gloria Nilson & Co. Real Estate

2. THE CALIFORNIA MARKET To infinity and beyond!!! Ed Krafchow CEO Better Homes and Gardens/Mason-McDuffie Real Estate

3. California Housing Market Outlook SERIES: CA Housing Market Outlook SOURCE: CALIFORNIA ASSOCIATION OF REALTORS® Sales should improve in 2015 Interest rates up in 2015, but economic growth should help push sales up The demographic demand for housing is not going to lessen Prices will increase at a more moderate pace 2014: up 10% from 2013 2015: up single-digit from 2014 Inventory should improve but remains tight Lack of housing turnover due to mortgage “lock-in” effect More homes need to be built Affordability will continue to be a challenge in 2015 Student debt drags on home sales, especially for first-time buyers Financial constraints weigh heavily on perceptions, keeping some out of market

4. Fannie & Freddie are the Market: 85%; 24% of first-time buyers used FHA loans Source: LPS, C.A.R. 2013 Annual Housing Market Survey

5. CA: Dollar Volume Steadily Improving, Projected to be Up 5.2% in 2014 $ in Billion SERIES: CA Housing Market Outlook SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

6. SERIES: CA Housing Market Outlook SOURCE: CALIFORNIA ASSOCIATION OF REALTORS® CA: SFH Sales Units Projected to be Down 4.4% in 2014

7. DUI EXERCISE POINTS OF LIGHT FROM THE CALIFORNIA MARKET THE GRAY ECONOMY LOCKED IN AND LOCKED OUT THE FONZI EFFECT DISPARITY DEVELOPING BETWEEN URBAN AND SUBURBAN MARKETS 25,000 HOMES A MONTH (WHAT HAPPENED?) THE COUCH REPORT THE REAL ESTATE INDUSTRY LEAD THE COUNTRY OUT OF THE DOWNTURN BUT IS NOW A LAGGING INDICATOR OF THE ECONOMY

8. REALITY LEVEL SET REAL ESTATE INDUSTRY HIGHT POINT 7.5m LOW POINT 4.3m 2014 PROJECTED 5.1 2015 PROJECTED 5.2 THE AUTOMOBILE INDUSTRY HIGHPOINT 16m LOWPOINT 9.6M 2014 PROJECTED 17.2M

9. CONCLUSION THE AUTO INDUSTRY HAS RETURNED TO HEALTH AND SNAPPED BACK INTEREST RATES ARE GREAT TECHNOLOGY IS BOOMING EMPLOYMENT IS NORMAL AND GETTING BETTER THERE ARE VAST SUMS OF MONEY FOR INVESTMENT INTO BUSINESSES THE STOCK MARKET IS REACHING RECORD HIGHS FOREIGN INVESTMENT INTO USA REAL ESTATE CONTINUES ON NEW HOME BUILDING IS BACK BUT AT AN UNEVEN PACE AND THE REAL ESTATE INDUSTRY IS IN STASIS

10. QUESTIONS FOR THE PANEL HOW HAS THE VERTICAL BUSINESSES IN PARTICULAR THE MORTGAGE BUSINESS AFFECTED YOUR BUSINESS? WHAT ARE YOU DOING INTERNALLY TO AFFECT YOUR BUSINESS AND MAKE IT BETTER? IF YOU HAD A MAGIC WAND HOW WOULD YOU CHANGE THIS INDUSTRY?