Real Estate Professionals Survey - Freddie Mac

Real Estate Professionals SurveyPrepared by GfK for Freddie Mac GfK 20161

How was the poll conducted? From September 6-20, 2016, a total of 502 interviews were conducted with licensed US realestate agents In order to qualify, real estate agents had to be focused on residential real estate (orresidential and commercial equally) and be at least somewhat knowledgeable of themortgage process The interview took just over 8 minutes on average to administer GfK 20162

Real Estate Agents’ Greatest Challenges And InformationNeeds Center On Marketing GfK 20163

Real estate agents currently use a myriad of marketing approaches Most popular tools real estate agents use to market themselves (%)Email69Personal/company website68Social media58Direct mail (flyers, postcards, etc.)52In-person networking events46Other real estate websites43Periodical advertising (newspapers, classifieds, magazines)Paid advertising (signs, billboards)2818Q: Please indicate what tools you currently use to market yourself. Multiple responses allowed. Responses of under 10% not shown.Base: All respondents (N 502) GfK 20164

But, many of their top challenges center on marketingIn fact, 17% and 14% of real estate agents surveyed select attracting potential sellers and buyers, respectively, as their #1challengeSelected as challenges real estate agents face (%)Rank in the top-5 mostimpactful challenges(%)Attracting potential sellers5529Attracting potential buyers5528Selling within the length of time plannedHow to effectively market my listings3224117Q: What are some of the challenges you are currently experiencing in your profession? Multiple responses allowed. Base: All respondents (N 502)Q: Looking at the list of challenges you just selected, which would you say have the biggest impact on you as a real estate agent today? Multipleresponses allowed. Base: Currently experiencing multiple challenges in profession and/or with homebuyers (N 486) GfK 20165

Real estate agents are most interested in social media tools for marketingIndustry trends of interest (%)Social media tools for business marketing45Virtual house tours40Energy efficient mortgages40Drone technology25Extremely interested (6-7)1920181764605742Moderately interested (5)T3BQ: Please indicate how interested you are in knowing more about each of the following industry trends. - Summary for T3B (5,6,7) Base: Allrespondents (N 502) GfK 20166

Confidence Gap When It Comes To Educating Potential HomeBuyers On The Buying Process – And Mortgages In Particular GfK 20167

Real estate agents take pride in their local knowledge –and in finding homes that are suited to buyers’ needsAreas where clients find real estate agents to be a trusted advisor (%)Knowledge of your local area66Helping the buyer find a home2163Showing them the right homes for their needs2155A great deal (7)276868482T2BQ: To what extent do you feel your clients find you to be a trusted advisor on the following? Base: All respondents (N 502) GfK 20168

There is a bit of a disconnect, though, when it comes to helping buyers navigatethe home buying processOn one hand, real estate agents givethemselves high marks for helpingclients navigate this process .Area where clients find realestate agents to be a trustedadvisor (%)Aid innavigating thehome buyingprocess78% Yet, on the other hand, buyers’ lack ofunderstanding of the home buyingprocess and the ability for real estateagents to help them are each middle-tierchallengesSelected as challengesfacing real estate agents (%)Clients' lack ofunderstanding of thehome buying processHelping potentialbuyers navigate thehome buying processAnd, real estate agents are lessconfident in their ability to referbuyers for housing counseling ifmore education on this process isneeded or wantedArea where clients find realestate agents to be a trustedadvisor (%)Rank in the top-5 mostimpactful challenges(%)3525116Aid in referringbuyers tohousingcounselor38%Q:To what extent do you feel your clients find you to be a trusted advisor on the following? Base: All respondents (N 502)Q: What are some of the challenges you are currently experiencing in your profession? Multiple responses allowed. Base: All respondents (N 502)Q: What are some of the challenges you are experiencing with potential homebuyers? Multiple responses allowed. Base: All respondents (N 502)Q: Looking at the list of challenges you just selected, which would you say have the biggest impact on you as a real estate agent today? Multipleresponses allowed. Base: Currently experiencing multiple challenges in profession and/or with homebuyers (N 486) GfK 20169

There is also a confidence gap when it comes to educating buyers on mortgagesand down payment assistanceJust one in four or fewer give themselves a top score on these measures – and many professional challengesstem from buyers not having enough information in these areasAreas where clients find real estate agentsto be a trusted advisor (%)Providing education on themortgage processDown payment assistanceprogram options50Selected as challenges facing real estate agents (%)Clients w/unrealistic expectationsof what they can afford52Clients not having enoughmoney for a down payment42Not qualifying for a mortgage poor credit30A great deal (6-7)38Clients’ fear that they will notqualify for a mortgageT2BRank in the top-5most impactfulchallenges (%)232719177Clients’ fear of buying a home/having a mortgage216Lack of down paymentassistance programs195Lack of mortgage productoptions125Q:To what extent do you feel your clients find you to be a trusted advisor on the following? Base: All respondents (N 502)Q: What are some of the challenges you are experiencing with potential homebuyers? Multiple responses allowed. Base: All respondents (N 502)Q: Looking at the list of challenges you just selected, which would you say have the biggest impact on you as a real estate agent today? Multipleresponses allowed. Base: Currently experiencing multiple challenges in profession and/or with homebuyers (N 486) GfK 201610

Given their challenges, real estate agents are eager to know moreOf greatest interest are mortgage options for different borrower needs, including low-income buyers or those with limitedcredit, as well as down payment assistance programsTopics of interest to real estate agents (%)Mortgage product options for different borrower needsDown payment assistance programs2528Mortgages - non-traditional/limited credit/low income buyers26State of the economy25Homebuyer trends2725262621Extremely interested (7)242665202019247574717070T3BQ: Please indicate how interested you are in knowing more about each of the following topics. Base: All respondents (N 502) GfK 201611

Lender Networks Seem To Be Working For Real Estate Agents GfK 201612

Few real estate agents express frustration with developing industry relationshipsand networksJust 14% each cite a limited business network or developingrelationships with other industry professionals as challengesIn fact, most view lender or loan officerrecommendations as an area where theyexcel in advising clientsArea where clients find real estate agents to be a trusted advisor (%)Referring the buyer to a loan officerand/or lender71A great deal (6-7)T2BQ: To what extent do you feel your clients find you to be a trusted advisor on the following? Base: All respondents (N 502):Q: What are some of the challenges you are currently experiencing in your profession? Multiple responses allowed. Base: All respondents (N 502): GfK 201613

Most have a select group of lenders for client referrals, typically just 1 to 3 individuals,of which they feel their lender referrals are typically usedSize of lender group(among those who have a selectgroup of lenders)84%73Frequency of clients usingrecommended lender(among those who have a selectgroup of lenders %)Have a selectgroup of lendersgenerally referclients to67%2422%9%2%3Always1 to 34 to 6OftenSometimesRarely7 or moreQ: Do you have a select group of lenders to which you generally refer your clients (e.g., loan officer, bank)? Base: All respondents (N 502)Q: And about how many lenders are in this select group that you refer to your clients? Base: Those respondents who have a select group oflenders who they refer their clients (N 421)Q: How frequently do your clients USE your recommended lender (e.g., loan officer, bank)? Base: Those respondents who have a select groupof lenders who they refer their clients (N 421) GfK 201614

Ease of doing business, reputation, and relationship with lenders prove mostimportant in lender referralsImportant factors in choosing lender referral sources(among those who have a select group of lenders %)Ease of doing business73Reputation of lender67Established relationship with the lender57Mortgage closing speed57Variety of mortgage options89298626842752823044Extremely important (7)912355Lender fees/cost to my clientsLocal presence of lender in the marketplace192968174T2BQ: How important are each of the following factors to you when choosing your lender referral sources? Base: Those respondents who have aselect group of lenders who they refer their clients (N 421) GfK 201615

Most require a mortgage pre-qualification before showing houses81%Require borrowers toget a mortgage prequalification beforeshowing them housesAmong those who do NOT require this mortgage prequalification, most make sure borrowers are qualified afterthe first couple of showings (29%), upon submitting anoffer (26%), or when they find a house they like (6%)Q: Do you require your borrower to get a mortgage pre-qualification before you begin showing them houses? Base: All respondents (N 502)Q: When in the process do you make sure your borrower is qualified to purchase the property? Base: Those respondents who do not requiretheir client to get a mortgage pre-qualification before showing them houses (N 93) GfK 201616

Appendix GfK 201617

Challenges real estate agents are experiencing in their professionAttracting potential buyers55Attracting potential sellers55Selling within the length of time planned32Establishing the right listing price28Helping potential buyers navigate the home buying process25How to effectively market my listings24Limited business network14Developing relationships with other professionals in the industry14Staging a home for saleNot enough inventory132Obtaining timely appraisals1Finding affordable home price for buyers1Q: What are some of the challenges you are currently experiencing in your profession? Multiple responses allowed. Base: All respondents(N 502)Statement in %; Other, None not shown GfK 201618

Challenges real estate agents are experiencing with potentialhomebuyers55Not enough homes available for buyers in their price range52Clients having unrealistic expectations of what they can afford42Clients not having enough money for a down payment38Potential homebuyers not qualifying for a mortgage due to a poor credit historyClients’ lack of understanding of the home buying process35Clients’ fear that they will not qualify for a mortgage23Clients’ fear of buying a home/ having a mortgage2119Lack of down payment assistance programs available for clients12Lack of mortgage product options available for borrowers11Lack of homeowner education programsLack of loyalty from buyers1Lack of buyers1Q: What are some of the challenges you are experiencing with potential homebuyers? Multiple responses allowed. Base: All respondents(N 502)Statement in %; Other, None not shown GfK 201619