HOME SALE PROCEDURES INVENTORY PROPERTIES

Total Direct Expenses (TDE)..................................................................1 Inventory Management Guidelines - Unsold .........................................2 Supplier Requirements............................................................................5 American Home Shield Program ...........................................................5 Minority Women Owned Business Program (MWOB)..........................7 Diversity Program Reporting ..................................................................7 Inventory Management Guidelines - Sold to Closing ............................9 UNIRISC, Inc. (Vacant Home Insurance)...........................................10 Protection Checklist ..............................................................................14

SECTION IX Copyright © 2008 by Cartus Corporation. All rights reserved.

OBJECTIVE Since nearly seventy percent of all transactions sell during the transferee’s pre-marketing period, all homes which come into Cartus’s Inventory are considered critical properties. Our objective in the Home Sale Assistance program is to achieve a quick sale at the best possible price. The goal is to keep the Total Direct Expense as low as possible for our clients.

DEFINITION OF TOTAL DIRECT EXPENSES (TDE'S) The components of costs associated with inventory properties are referred to as Total Direct Expenses (TDE’s). Included in TDE’s are the following:

Carrying Costs (Time Related Expenses) Â Â Â Â Â

Property Taxes Insurance Utilities Maintenance Repairs/Improvements

Selling Costs     Â

Broker’s Commission Mortgage Charges Closing/Legal Fees Marketing/Purchasers Incentives Title Expenses/State Transfer Taxes

Resale Loss (GAIN) The difference between what Cartus paid the transferee for the property, (appraised value) and the final sale price. Carrying Costs + Selling Costs + Resale Loss (GAIN) = Total Direct Expenses (TDE’s) All Cartus network Brokers are expected to meet, or come in below the TDE target listed in their agreement with Cartus.

1 Cartus Associate Broker Network Handbook, Section IX Copyright © 2008 by Cartus Corporation. All rights reserved.

Inventory Management Guidelines-Unsold Who will I talk to at Cartus?  The Critical Inventory Specialist (CIS) works with the Network Broker to resell a transferee’s home when it comes into inventory as the result of a buy-out.  The Real Estate Specialist (RES) will contact the relocation department to confirm the listing terms and referral fee arrangements as the property transitions from Home Marketing to Inventory. What is the process for handling Inventory? Within 24 hours the following items are to be completed:  Call from Critical Inventory Specialist (CIS)  Confirm receipt of the Inventory placement in Broker Center.  Relocation Department assigns a certified CMIS "A" Team agent to manage the inventory property.  Arrange for key pick up – call transferee to discuss access to the house if they have not yet vacated  Contact former listing agent to advise of assignment of listing  Submit to MLS with seller as “Corporate Owned” and send a copy to your Critical Inventory Specialist (CIS).  Install yard sign  Install lock box (once vacant)  Place a sign in sheet on premises  Design professional flyer with photograph(s) and features  Place copies of all addenda and disclosures plus a Cartus State Contract in property for potential purchasers to view  Place PHH Mortgage information in property  Have property professionally cleaned, once vacant  Transfer all utilities into your company’s name, once vacant 2 Cartus Associate Broker Network Handbook, Section IX Copyright © 2008 by Cartus Corporation. All rights reserved.

 Notify telephone, refuse disposal and alarm companies to discontinue services and to bill former occupants for services as appropriate.  Verify that all major systems are operational (i.e. heat/air conditioning)  Arrange for regular lawn care or snow removal as needed  Winterize property as climate warrants (leave heat on) 55°  Pick up any residual mail or newspapers  Advise Critical Inventory Specialist (CIS) of “Broom Clean Condition” once vacant  Complete the Vacant Property Inspection Report once the home is vacant

Within 48 hours: Â Acknowledgment of listing placement, assigned agent, and terms back to Service Consultant in Broker Center.

Within One Week: Â Submit written Brokers Market Analysis ª Review previously submitted BMA, update and submit if applicable ª Include vacant property pictures/reports ª Review problem property predictor, develop strategy as appropriate (See Exhibit A: Problem Property Predictors) ª Determine repairs and improvements required, submit bids on the Contractor Bid Sheet located in Broker Center Forms Library/Inventory Management Forms/Contractor Bid Sheet ª Take photos of all repairs and improvements needed ª All repairs and improvements must be approved prior to the start of any work and obtain bids immediately. ª Bid requirements: ¾ One bid required up to $2,000 ¾ Two bids if over $2,000 ª All cosmetic work should be in neutral colors, beige, off white, white ª All repairs and improvement work must be inspected to insure it meets quality standards ª Notify neighbors that the house is for sale ª Plan a Brokers Open House as well as a Public Open House

3 Cartus Associate Broker Network Handbook, Section IX Copyright © 2008 by Cartus Corporation. All rights reserved.

Weekly:  Inspect property and arrange to have all minor maintenance completed  Call the Critical Inventory Specialist to alert of any issues. Document service details and recommended actions steps within in Broker Center and the Service Consultant.

30 Days:  All repairs and improvements should be completed. All work must be inspected prior to submitting bills  Submit bi-monthly written report – be sure to include follow up on all showings to get buyer/agent comments – update Broker Center. Include copies of home advertisements.  Submit monthly billing statement using the Forms Library in Broker Center

60 Days and every 30 days until sold  Continue to follow up on showing feedback  Submit monthly written report ª Supply supporting data for recommended strategies ª Update competitive listings and sales monthly  Submit monthly billing statement from the Forms Library in Broker Center See Exhibit A: See Exhibit C: See Exhibit D: See Exhibit E: See Exhibit L: See Exhibit M: See Exhibit N:

Problem Property Predictors Cartus Services Property Management Guidelines Checklist Promotion and Marketing Ideas Sample BMA Request Language Broker Procedures for Sarbanes-Oxley Compliance Corporate Inventory – R&I Corporate Inventory – Property Condition and Maintenance

4 Cartus Associate Broker Network Handbook, Section IX Copyright © 2008 by Cartus Corporation. All rights reserved.

Supplier Requirements  All suppliers must be highly reputable contractors, which must be fully licensed in accordance with local law or custom, insured and bonded to perform maintenance, repair or improvement services.  Prior to completing any work for the broker, either a certificate of insurance or a release of liability form for any supplier must be in the hands of the broker. No work can be completed without this information. Suppliers cannot be related to the broker or staff. This presents potential conflict of interest situations and will negatively impact our credibility.  No formal contract or agreement can be signed by the broker or supplier, which states or implies a guaranteed volume of work.

American Home Shield As the nation’s leading home warranty provider, American Home Shield® (AHSsm) has been solely focused on providing reliable home warranty solutions to REALTORS® and homeowners for over 35 years. Cartus Corporation clients will benefit from a home warranty program that features comprehensive coverage for system and appliance breakdowns for inventory homes that could save hundreds, or even thousands of dollars of carrying costs. In addition, an AHS Home Warranty will assist in marketing the home by providing the buyer one year of coverage. Product Features:

• • • • •

Client inventory homes are covered for 180 days. The coverage will be extended at 180 day intervals for as long as the property remains in inventory. Coverage extends to new home buyer for one full year and can be renewed by the homeowner for subsequent years Available in all states except Alaska Clients can request service 24/7/365 online and through our 4 national service centers. $415 coverage cost, $60.00 Trade Service Call Fee for each covered trade.

*** Trade fee is $95.00 in the Northeast states of NY, NJ, CT, RI, MA, ME, NH and VT Value-Add to Cartus Clients Helps Cartus’s clients maximize the selling of a home to a buyer for a greater value and reduce marketing time and carrying costs. • Increased days on the market = increased carrying costs • Unknown conditions in vacant homes can results in unexpected repairs and replacements • Home repairs are time consuming and expensive • AHS sources for quality contractors to add to their nationwide network • Breakdowns can delay and /or jeopardize a closing • (Example)The average replacement cost of an HVAC system is $2,461 - $4,400.00. 5 Cartus Associate Broker Network Handbook, Section IX Copyright © 2008 by Cartus Corporation. All rights reserved.

Operational Highlights American Home Shield Warranties are placed on the properties of Clients participating in the program on an automated basis by Cartus. AHS sends a merchandising kit of promotional materials directly to the relocation contact. The warranty covers the house the entire duration while in Inventory and transfers to the purchasers for one full year at closing. Warranties are placed on inventory listings unless restricted by clients. Customers may also purchase a home warranty in their new destination location through their agent, at their own expense. Competitive Consideration

• • •

• • •

Currently serving more than 1.3 million homes 4 national service centers handle over 5.7 million calls annually AHS will dispatch over 2.6 million work orders to a network of over 11,000 service contractors this year Preferred over twice as often as the nearest competitor1 Dedicated to making the service process hassle free. Over 57% of our customers renewed their contracts, an industry high. 1-

National Association of REALTORS® 2005 Member Profile

Contact AHS has a dedicated toll-free phone number for listing agents and buyers to place service requests and for claims resolution. Call (800-776-4663) or www.AHSservice.com .

Minority & Women Owned Business Program (MWOB) Cartus is committed to ensuring that our Cartus Diversity Supplier Program is successful. The importance involved with this initiative is threefold. Â As a supplier to many government agencies, and private sector clients that have instituted diversity programs, it is Cartus’s contractual obligation to meet the targets established in those contracts. Â In order to maintain these client relationships, and to continue to be the recipient of their business it is necessary to meet or exceed their diversity targets. Â Cartus Corporation is an advocate of diversity programs. Through its own culture and programs that they support, Cartus continues to be recognized for their efforts in the promotion of Minority and women Owned Businesses. (MWOB) 6 Cartus Associate Broker Network Handbook, Section IX Copyright © 2008 by Cartus Corporation. All rights reserved.

The goal established for all Principal and Associate brokers is to provide 20% of dollars expended on corporate inventory listings is paid to minority and women owned businesses. The attached exhibits explain the process in greater detail and will assist you in complying with this key initiative. Adherence to this program will allow Cartus to meet its current contractual obligations and open the door for additional business opportunities. Your annual performance goals include meeting or exceeding MWOB utilization.

GETTING STARTED: Qualifying minority and women owned suppliers  IDENTIFY suppliers who are paid for performing services on Cartus inventory properties. Examples of suppliers include: painters, landscapers, cleaners, contractors, pool companies, roofers, and carpet and linoleum companies.  INTERVIEW your suppliers to see if they are a 51% minority or women owned company.  Enclosed is a sample of the MINORITY AND WOMEN-OWNED BUSINESS CERTIFICATE. If the supplier qualifies they need to complete and sign the certificate. Each company is required to complete the certificate. The completed certificate should be housed in the relocation department for auditing purposes. You may be audited at any time.  If your current suppliers do not include any MWOB’s you will need to identify and interview new potential suppliers. Remember your goal is 20% of the total dollars expended on an inventory property must go to a Diversity Supplier.  QUALIFYING AGENTS - Agents are independent contractors and can also qualify if they are minority or a woman. Only those agents who are paid a listing commission on a Cartus corporate inventory property listing qualify. Listed below are the minority classifications that qualify. ª ª ª ª ª

African American Asian-Indian Native American Asian-Pacific Hispanic American

 Based on the above criteria, agents who qualify must complete and sign the MINORITY AND WOMEN-OWNED BUSINESS CERTIFICATE. The agent’s certificates can be stored in numerous ways, i.e., in the relocation department, in the branch office, or at a corporate headquarters. In the event that you are audited the certificates need to be available.

7 Cartus Associate Broker Network Handbook, Section IX Copyright © 2008 by Cartus Corporation. All rights reserved.

REPORTING: Â The reporting vehicles available are: Broker Center Forms Library report listed as MWOB, the name of the report is Cartus Diversity Supplier Utilization. This form needs to be e-mailed or faxed to: Tom Davis, Cartus, 40 Apple Ridge Road, Danbury, CT 06810, 203-205-6564 (F). Please insure that the monthly report is complete with your company name, address, city and state. Â When you pay a qualifying supplier you will report those dollars on the Cartus Diversity Supplier Utilization monthly report form. Â Report any commission paid to a qualified agent on the Cartus Diversity Supplier Utilization monthly report form. Do not enter the entire commission paid to the brokerage, just the amount of commission paid to the agent. Â If you prefer, you can lump sum the dollars paid to agents by your company by category. See attached. Â Reports are due the first week of each month. Â If there were no dollars paid to Diversity Suppliers for that month, you are still required submit a report indicating the same. See Exhibit F: Diversity Supplier Utilization Broker Dollars Report See Exhibit G: Minority and Women-Owned Business Certificate

Inventory Management Guidelines – Sold to Closing During the negotiation process, be prepared to supply the following information: Â Buyer Profile – Any and all information available based on Agency relationship. Â Remind selling agent that it will take time to secure client approval of offers on the property. Offers secured over the weekend may or may not be presented to the client until the next business day. Â All counters must be subject to corporate approval. Â Pre-qualification using PHH Mortgage. Â Use of Cartus's State Contract, if applicable. Â All disclosure statements must be signed and returned with the contracts. Â Negotiate closing dates within thirty (30) days. 8 Cartus Associate Broker Network Handbook, Section IX Copyright © 2008 by Cartus Corporation. All rights reserved.

 No contract can be accepted and processed without the above information.  Must use Regional Closing Office (RCO). RCO will assume responsibility for any negotiations necessary after an offer has been accepted.  Pre-closing walk through must be completed three days prior to settlement date.  All pre-closing issues must be addressed prior to going to the closing table. Agent should secure bids as necessary.  Early occupancy is not permitted.  Cartus Services does not allow funds to be escrowed at closing.  Bills must be reviewed with RCO 72 hours prior to closing.  Final billing statement must be submitted at the time of closing, including originals of all bills and estimates for bills not yet in hand.

9 Cartus Associate Broker Network Handbook, Section IX Copyright © 2008 by Cartus Corporation. All rights reserved.

UNIRISC, Inc Procedure-Vacant Home Insurance UNIRISC INSURANCE CLAIMS PROCESS AND EMERGENCY PROCEDURES 1. In the event of an Emergency the Broker makes emergency repairs to secure property to prevent further damage or loss. Examples of emergencies include but are not limited to: a. Roof damage, arrange to have roof tarped and protected immediately to stop further damage, b. Vandalism-locks broken need immediate replacement to secure property or c. Pipes burst and flood home. (Immediately stop source of water and eradicate excess water from home) 2. For extreme emergencies after hours please contact Jim McCue at (201) 370-5242 or Denice Valluzzi at (845) 641-7486. 3. Broker completes all six sections of insurance claim form with all available information. Sample of form is attached. Based on extent of damage broker may also contact UNIRISC to discuss immediate needs 4. Broker sends completed insurance claim form via e-mail to [email protected]. In the event of e-mail issues the form can be sent via fax to Denice Valluzzi at 201.967.7110. The form can also be found on the Broker Center Forms Library 5. Broker simultaneously sends copy of completed claim form to Cartus Client Inventory Specialist (CIS) for inventory homes or the Closing Coordinator for amended sales. Broker keeps copy for file. 6. UNIRISC will determine if claims is a covered loss per the insurance policy. They will notify the Broker and Client Inventory Specialist or Closing Coordinator of those claims outside of policy coverage. 7. In the event the claim is not a covered loss the broker should contact the appropriate Client Inventory Specialist or Closing Coordinator to determine next steps. 8. If a covered loss UNIRISC, Inc. will acknowledge receipt of claim to appropriate CIS/CC via the Claim Notification Form within 1 business day of receipt of claim from broker. If no acknowledgement is received, Cartus should contact UNIRISC, Inc. to follow up on status. Denice Valluzzi Claims Administration UNIRISC, Inc. 205 Robin Road Paramus, NJ 07652 Phone: 201.967.7810 ext. 17 FAX: 201.967.7110 10 Cartus Associate Broker Network Handbook, Section IX Copyright © 2008 by Cartus Corporation. All rights reserved.

9. UNIRISC will determine whether to send and adjuster to view the claim or to proceed with obtaining estimates. If no adjuster is required UNIRISC will contact the Broker to discuss the most efficient method for obtaining bids (the broker through local relationships or UNIRISC through a network of repair companies) Estimates over $1,000 will require 2 bids. No repair work is to be initiated until authorized by Cartus. (please see Emergency Procedures below for exceptions). 10. Broker should take photos immediately (at time damage is discovered) and sent to UNIRISC, Inc. Photos should show complete extent of damage. 11. UNIRISC completes Approval Notice (claims adjustment) and submits to appropriate Cartus CIS or CC outlining claims adjudication. 12. CIS/CC works with Broker and or UNIRISC to initiate repairs if applicable 13. UNIRISC, Inc. will update Cartus contact and broker on claim status 20 days after initial claim report and each 14 days thereafter until claim resolution. 14. UNIRISC will provide monthly claims reporting to Cartus per the agreed upon format.

11 Cartus Associate Broker Network Handbook, Section IX Copyright © 2008 by Cartus Corporation. All rights reserved.

UNIRISC RISK SERVICES INSURANCE CLAIM NOTIFICATION Date:

File Number:

Cartus Employee Name

Region:

Phone Number:

Fax Number:

Broker Firm: Address: City, State, Zip Agent Name:

Vendor No, If known:

Phone Number:

Fax Number:

Agent’s Email Address:

Location of Loss Address: City, State, Zip Status of Home

Sold

Unsold

Sale Pending Date:

Date of Loss: Name of Police/Fire Dept. Reported To:

Case No.:

Description of Loss and Damage

Estimate Repair Costs (if known): Comments:

Fax To:

UNIRISC, INC. 205 Robin Road, Suite 230, Paramus, NJ 07652 Phone: (201) 967-7810 / Fax: (201) 967-7110 E-mail: [email protected] 12

Cartus Associate Broker Network Handbook, Section IX Copyright © 2008 by Cartus Corporation. All rights reserved.

PROTECTION OF VACANT DWELLINGS: The problem of protection on an Inventory property can be divided into two major segments.  Protection from the invader who threatens to take or destroy it.  Protection from the vulnerability of fire and nature’s forces. Many elaborate and expensive techniques have been developed over the years to protect vacant properties. However, there is much that can be done to deter unwelcome visitors and minimize losses from vandalism and forces of nature. Often this can be accomplished at a minimal cost or at no cost at all and at the same time serve as a marketing asset. In planning for the protection of any property, the main objective is to establish counter measures that will:  prevent losses from occurring  minimize losses from nature’s forces The accomplishment of this objective hinges on a high degree of personal commitment on the part of the local real estate broker. It is the duty of the broker as the manager of the property to direct and control all activities necessary for the protection of the property. Additionally, the brokers should satisfy themselves that such protection has been carried out to a high degree of control and quality. The mere delegation of such tasks to others is not in itself a guarantee. To this end the broker must have a personal knowledge of what is required to be done and the best way it can be accomplished. This is particularly true of the work that may be performed by service contractors. In other areas of control the broker should:  Conduct periodic inspection visits to the premises. The frequency of the visits must be on a weekly basis unless local conditions dictate daily visits. The inspection should be staggered so as not to set a pattern of time. Inspections must be done during the period from the sale of the home until it is closed to avoid last minute claims just before closing.  Advise neighbors of the vacancy. Give them the names and phone numbers at which the broker can be contacted in the event of an emergency or an observed trespass.  Notify police so that they may give particular attention to the property in the course of their normal rounds. If a community civilian patrol exists, they should also be notified. It is not possible for a checklist to cover every eventuality because of the numerous unique situations that will be encountered. The checklist should therefore be considered as a minimum standard and not construed as a final criterion.

13 Cartus Associate Broker Network Handbook, Section IX Copyright © 2008 by Cartus Corporation. All rights reserved.

Protection Checklist PROTECTION OF THE PROPERTY REQUIREMENTS  Weekly physical inspections of the property and premises from list to close of escrow and settlement.  Notify neighbors, ask them to keep an eye on the property and to contact you immediately if necessary.  Pick up any newspapers or deliveries. Clear with post office to stop any deliveries.  Make sure all windows and doors are locked.  Disconnect or unplug automatic garage door opener, remove garage door controls from property.  Padlock exterior fuseboxes  Winterize interior if applicable; cover all exterior pipes and outlets.  Make sure pools are not accessible.  Remove all gasoline, paint cans or other flammable materials. Dispose of in a legally and environmentally correct way.

PROMOTING APPEARANCE OF OCCUPANCY Â Having shades, blinds or coverings on windows. Â Maintain landscaping. Â Winter months--snow removal and sanding. Â Dispose of excess household goods. Â Make sure all exterior lighting is operational. On a rotational basis, leave on various lights. Â Interior cleaning. Try to have various service providers go to the property on different days of the week.

LOOK! PAY ATTENTION FOR SIGNS OF AN INTRUDER(S)  Check for signs of damaged shrubs or flowers  Cracked glass panes 14 Cartus Associate Broker Network Handbook, Section IX Copyright © 2008 by Cartus Corporation. All rights reserved.

 Torn or misaligned screens  Visible tampering of doors or windows

HIRE PROFESSIONALS FOR:  Heating boiler operation or shut down  Gas main lines or valves  Electric circuits and fuses  Wells  Fuel tanks  Septic tanks  Pumps

INSURANCE CLAIM PROCESS 1. Loss occurs. 2. Notify the Client Inventory Specialist immediately. 3. Broker secures property to prevent further damage or loss. Broker makes emergency repairs as warranted. 4. Broker completes all six sections of insurance claim form with all available information. Sample of form is attached. Based on extent of damage broker may also contact UNIRISC to discuss immediate needs 5. Broker sends completed insurance claim form via e-mail to [email protected]. In the event of email issues the form can be sent via fax to Denice Valluzzi at 201.967.7110. The form can also be found on the Broker Center Forms Library

6. Broker simultaneously sends copy of completed claim form to Cartus CIM or Consultant assigned to file. Broker keeps copy for file. 7. Broker contacts supplier(s) to obtain bid(s) for repairs. Estimates over $1,000 require 2 bids. No repair work is to be initiated until authorized by Cartus. 8. Broker should take photos immediately (at time damage is discovered) and sent to UNIRISC, Inc. Photos should show complete extent of damage. 15 Cartus Associate Broker Network Handbook, Section IX Copyright © 2008 by Cartus Corporation. All rights reserved.

9. UNIRISC completes Approval Notice (claims adjustment) and submits to appropriate Cartus CIS or CC outlining claims adjudication. 10. In the event the claim is not a covered loss the broker should contact the appropriate Client Inventory Specialist or Closing Coordinator to determine next steps. 11. If a covered loss UNIRISC, Inc. will acknowledge receipt of claim to appropriate CIS/CC via the Claim Notification Form within 1 business day of receipt of claim from broker. If no acknowledgement is received, Cartus should contact UNIRISC, Inc. to follow up on status. Denice Valluzzi Claims Administration UNIRISC, Inc. 205 Robin Road Paramus, NJ 07652 Phone: 201.967.7810 ext. 17 FAX: 201.967.7110

16 Cartus Associate Broker Network Handbook, Section IX Copyright © 2008 by Cartus Corporation. All rights reserved.