DRRC November 2004 RELOCATION MANAGEMENT PERSPECTIVE Debbie Robinson, CRP, GMS Vice President, Director - RealtySouth Relocation The Squeeze on Service Fees

DRRC November 2004 Managing Customer Expectations Role of Relocation Department:  The Relocation Department is Responsible for all Relocation Efforts Within a Company  Train Coordinators in Department and the Agents Within the Company That Will Be Working With Our Transferees  Develop and Maintain Relationship with Companies Who Can Provide Additional Source of Income and Business for Agents  Collect and Provide Area Information for Agents and Newcomers  Track and Analyze Relocation Business for the Company  Meet the Expectations of our Clients  Be the Source of Knowledge for Our Clients and Customers

DRRC November 2004 Associated Cost Components MARKETING Printing Cost Advertising Newcomer Information Promotional Material TECHNOLOGY Online policy Personal file online Expense reimbursement IDX Monitoring OVERHEAD Salaries/Benefits Locations / Lease Communications / IT Training Cost MEMBERSHIP FEES Local ERC Nat’l / Regional Real Estate 3 rd Party Network TRANSACTIONAL Listing Referral Fees Destination Referral Fees Inventory Management Property Management

DRRC November 2004 Agent Requirement and Investment 5 – 7 years experience Full time Relocation certified Compete for the listing –One Step Process –Two Step Process Complete ERC form in hours Extensive follow-up – weekly reports Technology savvy Do open houses, virtual tours, info boxes Audience Challenge: What is the average number of man hours (agent investment) in a day property listing???

DRRC November 2004 The Financial Impact To Serve this Segment LISTING TRANSACTION (BASED ON $250,000 LISTING TRANSACTION) Commission (3%) $7,500 $7,500 35% Referral Fee (to 3 rd party companies) $2,625 VS. Non-Relo $ 0 $4,875 $7,500 Agent Split (60%) $2,925 $4,500 Company Dollar $1,950 $3,000 To Agent Office (10%) $ 195 $ 300 Company Dollar $1,755 $2,700 Operating Expense - $1,645 -$1,645 Before Taxes $ 110 $1,055 Taxes $ 49 $ 475 PROFIT $ 61 $ 480 Please note that many of our transactions are less than $250,000, so the profit would be even less.

DRRC November 2004 Sources of Income SOURCES OF INCOME Broker to Broker Third Party Direct Client Business Referrals Outgoing Referrals Affinity Program Household Goods Moves Settling In Services Agent Lead Programs REO IDX Leads Mortgage Assistance Agent Training Policy Writing Title

DRRC November 2004 SOURCES AVAILABLE ON RELOCATION REFERRALS? SOURCES OF INCOMEBROKER vs. 3 rd PARTY Broker to BrokerYesNo Third PartyYesYes Direct Client ReferralsYesn/a Outgoing ReferralsYesNo Affinity ProgramYesNo/Sometimes Household Goods MovesYesNo Settling In ServicesYesNo/Sometimes Agent Lead ProgramsYes??? REOYesNo IDX LeadsYesNo Mortgage AssistanceYesNo/Sometimes Agent TrainingYesNo Policy WritingYesNo TitleYesNo/Sometimes

DRRC November 2004 WHERE ARE WE HEADED IN THE FUTURE? If the client’s tax benefit were to be taken away by the IRS for the BVO/Amended program – this could result in more lump-sum packages being offered to the transferee vs. the BVO program. The taxes would be the responsibility of the transferee or higher cost to corporation Quality of service would be greatly impacted - $0 fees are raising much concern in this area to the bottom dollar.. Agent/Company Split continue to increase due to referral fee and their cost of sales….agent getting more. Could we be headed in the future to higher referral fees based on the cost of doing business? Can we retain and attract top agent talent? At what cost? Will we be forced to decline this business segment (3 rd party) in the future and seek more profitable business opportunities to survive and thrive!