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Nextage Lone Star Realty POLICY AND PROCEDURE MANUAL Revisions January 2013 The Leadership of Nextage Lone Star Realty believes that our clients and agents will be best served if we set out in writing our philosophy of doing business, our company policies which will mirror our philosophy, and the procedures to be used in carrying out those policies. Because of these reasons, and because we know that our agents and associates will need guidelines and direction, we have adopted our Policies and Procedures Manual as the resource tool for all agents and associates. This manual is not a contract, express or implied, guaranteeing employment or affiliation of independent contractors for any specific duration. Although we hope that your relationship with us will be long-term, either you or the company may terminate this relationship at any time, for any reason, with cause and due notice. While we have attempted to provide detailed guidelines in this manual, there will be times when matters must be determined by management decision, guided by the philosophies of fairness, integrity and good communication. This is a living document. When changes are made to the document, leadership will provide you with a new page for the manual and will ask you to return the page that was substituted with your signature, which will indicate to the leadership that you have been notified of the change in policy. We hope that you will become well acquainted with the manual, and refer to it often.

Our Mission: To embrace a culture that champions opportunity for our agents while providing the education, systems and leadership that promote financial success and personal development. Our Vision: We will build a community that is a customer focused real estate company, which embodies “excellence� through united efforts. Our goal is to make a difference in the lives that we touch and provide0 an0 environment that leads to a balanced and fulfilled life without limits. Thank you for being in business with us, Nextage Lone Star Realty Leadership Team


TABLE OF CONTENTS

1.0 0AGENCY POLICY 1.1 Agency Policy Requirements 2.O 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 2.10 2.11 2.12 2.13 2.14

LISTINGS 0 ................................................................................................................................ Brokerage Commissions Types of Listings Listing Agreement-Form and Information Exceptions of Listing Agreement Length of Listing Agreement The Listing Contract with the Owner Cancellations or Withdrawal of Listing Office Procedure - New Listings MLS & Co-op Relations Property Inspection Tours Signs Sales Associate Rights to a Listing Joint Listings with another Company Associate Competition with Another Company Associate

3.0 0BUYER REPRESENTATION AGREEMENTS 3.1 Buyer Representation Agreements, Obtaining and Servicing 3.2 Buyer Representation Forms and Information 3.3 Length of Term 3.4 Cancellation 3.5 Reserve Properties 3.6 Submission to Office 3.7 Cancellations or Withdrawal 3.8 Other Buyer’s Agents 3.9 Fees 4.0 4.1 4.2 4.3 4.4 4.5

0SHOWINGS, OPEN HOUSES AND Showings - 0Company Listings Showings -0 MLS or Co-op Listing

PROSPECTS

Prospect Protection Vacations, Absenteeism Open House Prospects

5.0 OBTAINING AND PRESENTING THE PURCHASE AGREEMENT 5.1 Disclosure of Sellers Agency Relationship 5.2 The Purchase Agreement 5.3 Earnest Money


5.4 Real Estate Taxes 5.5 Buyer's Signatures 5.6 Appointment to Present Purchase Agreement 5.7 What Offers are to be presented 5.8 Presenting the Offer 5.9 Acceptance of Counter-Offer 5.10 Purchase Agreement 5.11 Cancellation of a Purchase Agreement 5.12 Rejected Offer 6.0 CLOSING PROCEDURES 6.1 Completion of the Sales Information 6.2 Title Opinions 6.3 Assumption Papers 6.4 Inspections 6.5 Amortization Schedules 6.6 Final Closing Documents 6.7 Down Payment 6.8 Commission Payment 6.9 Early Possession Agreement 6.10 Attendance at Closing 7.0 ORGANIZATIONAL AND ADMINISTRATIVE PROCEDURES 7.1 Terms of Association 7.2 Conditions of Association 7.3 Conduct of Associates 7.4 Long Distance and other Phone Use 7.5 Limitation of Authorization to Sales Associates 7.6 Responsibilities of Sales Associates 7.7 Automobile Liability Insurance 7.8 Termination 7.9 Errors and Omission Insurance 7.10 Agent Expenses 7.11 Office Conduct 7.12 Complaint Policies 7.13 Internet Policies 8.0 8.1 8.2 8.3 8.4 8.5 8.6 8.7 8.8 8.8

COMMISSIONS AND FEES0 Commission Scales Commission Payable CAP structure Adjustment in Commission Beneficial Commissions Rental and Leasing Fees Referral Fees - Appraisal Fees Transaction fee Bonuses


8.9 Deferred Commission 8.10 Right of First to Adjust Realtor Fees and/or Settle Claims, Disputes or Litigation 8.11 Inter-Company Disputes 8.12 Outside Broker Dispute 9.0 PURCHASE0 AND SALE OF PROPERTY FOR PERSONAL ACCOUNT 9.1 General Information 9.2 Sale of Personally Owned Real Estate 10.0 0ADVERTISING 10.1 Classified Advertising and 0 Television 0Advertising 10.2 Signs 10.3 Specialty Advertising 10.4 Million Dollar Recognition 10.5 New Agent Company Photo 10.6 Bulk Mail 11.0 11.1 11.2 11.3 11.4

RELOCATION AND REFERRALS Introduction Purpose Relocation Department Director Agent Standards for Participation in Relocation

12.0 12.1 12.2 12.3 12.4 12.5 12.6 12.7

PERSONAL ASSISTANTS Introduction Independent Contractor or Employee Sample Policy Contracts Required Duties of Unlicensed Assistant Duties Prohibited by Unlicensed Assistant Office Policies Pertain to Assistants

13.0 13.1 13.2 13.3

SEXUAL HARRASMENT Definition Position Statement Procedures

14.0 14.1 14.2 14.3 14.4

ARBITRATION AND ETHICS HEARINGS Cost Unpaid Commissions Ethics Hearings Costs of the Hearing Results

15.0 GOVERNMENT REGULATIONS TO BE FOLLOWED 15.1 Fair Housing 15.2 Do-Not-Call Policy


16.0 ASSOCIATION AFFILIATION 16.1 Code of Ethics- NAR 16.2 MLS 16.3 Local Board of REALTORS By-Laws Forms and Addendums: Credit Card Authorization Form CAP Management Form- Individual CAP Management From-Team CAP Management Form – Partnership

1.0 Agency Relationships Company Agency Policies As per state license law, Texas Real Estate Commission (TREC) and the National Association of REALTORS® Code Of Ethics (NAR), all companies must have a written agency policy. Prior to listing a home for sale, listing a buyer through a buyer representation agreement or working with a consumer in the transaction on a specific property, the agent must disclose to the party the company’s agency policy and how that policy will affect the parties to the transaction. Sec. 1101.558 of The Texas Real Estate Act: (c) A license holder shall provide to a party to a real estate transaction at the time of the first substantive dialogue with the party the written statement prescribed by Subsection (d) (IABS TAR 2501) 1.1

The Company Agency Policy of Nextage Lone Star Realty At Nextage Lone Star Realty, the company policy is that our clients come first. We are a full service real estate company that represents both buyers and sellers. It is our philosophy that each side of a transaction should be represented fairly and equally. With that in mind, the following policy applies: 1.The designated Broker will appoint all in house sales. represent both sides of a transaction.

No agent may

2.If the designated Broker owns the listing, both sides of the transaction will be appointed. 0

3.If appointments are made, any information received prior to the appointment is privileged information and cannot be shared with the


parties. Opinions, or advice can be given with restrictions pertaining to the privileged information. 0

2.0 LISTING - OBTAINING AND SERVICING 2.1

BROKERAGE COMMISSIONS AND ANTI TRUST POLICY When discussing Brokerage Commissions with the public you are quoting the Company commission only. The commission rate for the sale, rental, or management of real property shall be determined between each individual broker, agent and their client, not by the Texas Board of REALTORS® or a fee determined by a group of real estate brokers.

a) Anti-Trust Policy: There is never to be any discussion with a cooperating broker or sales associate or the general public, regarding commission rates, pricing structures, marketing practices or the fee structure or business practices of a competitor. The only fee that you may quote to a consumer is the fee that the company charges. If a consumer asks if this is the “normal” fee, inform the consumer that there is not a “normal” fee. Our fee is based upon the services that the company provides. Give the list of those services to the consumer, be it buyer or seller, in order to explain the company policy on fees. If the consumer asks you to comment on another company’s fee policy, you MUST state that you have no information on any other company’s fee structure and that you can only discuss your company’s fee. Avoid discussion with employees and Sales Associates of competing firms regarding the commission policy of the Company that could be construed to be agreements or conspiracies to fix, establish prices, or otherwise retrain competition in violation of state and federal anti-trust laws. If you find yourself in the presence of such a conversation excuse yourself immediately and report the incident to the Broker.

b) The preferred company policy for commission is a minimum of 3% for each side of a transaction In the event you need to lower the commission or renegotiate a commission after the sale is in process, you must get the approval of the Director of Business Development (DBD) and/or the Broker. If a Seller or Buyer asks you to reduce your fee, you MUST tell them that our fee is not negotiable without the consent of the DBD/Broker. Should you reduce the fee, the portion of the commission due the office will remain the same, and the fee of the agent will be reduced by the fee reduction unless written authorization from the DBD and/or the Broker has been obtained.

0

2.2 TYPES OF LISTINGS


a) Exclusive Right to Sell i. This is the full right to represent the owner in any sale of the property. This is the type of listing that the company requires to be taken. ii. There is a Residential Real Estate Listing Agreement – Exclusive Right to Sell (TAR 1101) that is to be signed by the sellers (owners of record must sign). Be sure to check with the recorder or Title Company to assure you that all of the titleholders have signed the listing as the sellers. The absence of even one of the owners could invalidate the listing agreement. We strongly recommend a minimum term of 90 days.

b) Exclusive Agency or Net Listings i.

These types of listings cannot be taken without the written approval of either the DBD or the Designated Broker.

0

2.3

LISTING AGREEMENT - FORM AND INFORMATION

a) The listing associate is to secure all information and prepare the Multiple Listing Service (MLS) listing form. MLS requires that all information furnished be complete and accurate. As the person providing information to the MLS, you are therefore responsible for the accuracy and completeness of the information. It is imperative to pay attention to the taxes, special assessments and pending special assessments, as they are critical. Flood plain or flood plain fringe area and zoning information should be noted if applicable. All information must be updated when renewing a listing or as new information becomes available. Inaccuracy in information provided and any penalty charged for misinformation or timeliness of the submission to the MLS shall be the responsibility of the listing associate.

b) Personal property is an important part of a sale. A clearly written understanding eliminates most disputes when you list the property. A Non-Realty Item Addendum To Contract (TAR-1924) is to be used. It is recommended that the Agent: I. Supply the Seller with an MLS Agent Full Report II. Have the Seller sign the Agent Full Report approving the information. III. Any discrepancies of information should be corrected immediately.

c) Fill out a property profile sheet, which can be found at http:// www.abor.com under Property Forms (left column of home page).


d) Possession date and terms are to be specific.

e) In cases of Power of Attorney, obtain a copy to ensure the validity and expiration dates. No agent 0is allowed to act as a POA for his or her client.

f) When taking a listing make sure you have completed and/or obtained all of the necessary paperwork required for the file. These files should be uploaded into the Virtual File System within 7 days. i. Listing Agreement a. Residential Listing - Exclusive Right to Sell (TAR-1101) b. Farm and Ranch Listing – Exclusive Right to Sell (TAR-1201) c. Commercial Listing – Exclusive Right to Sell (TAR-1301) ii.Seller’s Disclosure (TAR-1406) iii.Information About Brokerage Services (TAR-2501) iv.Survey & T-47 (If available)

g) Provide the seller with the Seller’s Property Disclosure Form and have them complete it. As and agent representing a seller, you are never, under any circumstance, to physically assist the client in the completion of the Seller’s Property Disclosure Form. Review the form with the Seller to make sure that all of the blanks have been filled in. If the property is subject to an exception to the Disclosure Statement, such as an estate, or new home construction, then indicate that on the form and get the seller’s signature. Any changes to the property that would cause a necessary change to the already completed form must be done immediately by completing a new Seller’s Property Disclosure Form. Upload the Seller’s Disclosure Form, Survey, and notarized T-47 into the MLS so that those agents showing the property can access it.

h) The US Department of HUD requires that every seller of residential property built prior to 1978 disclose to the potential buyer/tenant the possibility for or the existence of lead based paint on the property. If the property being listed was built prior to l978 make sure that the form (TAR-1906) is completed as instructed with the seller’s signature and initials.

i) In accordance with the NAR Code of Ethics, the amount of compensation being paid to the co-operating brokerage company who is acting in the capacity of a buyer’s agent shall be disclosed in writing on the listing agreement or Registration Agreement Between Brokers (TAR-2404).

j) Where applicable and to the extent of availability, all agents with Nextage Lone Star Realty will use Texas Association of REALTORS (TAR) forms.


2.4

RESERVED BUYER EXCEPTIONS TO LISTING AGREEMENT

The owner may claim an unspecified number of his prospects as reserved buyers to the agreement. It is the policy of the Company that exceptions may be for a maximum of 14 days. Fill out the Named Exclusions Addendum to Listings (TAR-1402).

2.5

LENGTH OF LISTING AGREEMENT It is preferred by the Company that listing agreements be for a period of 180 days, however, not less than 90 days. Make every effort to obtain a listing of this length, thereby increasing your opportunity to sell the property. Prior to the expiration of the listing agreement, the seller shall be given a list of the prospects (name and address) that were shown and interested in the property. The seller shall be made aware that if any of the prospects purchase the property directly from the seller, that the fee will be considered to be earned and will be due upon closing of the property. The list shall be sent via registered mail with a receipt kept in the file. The protection period for the prospects is recommended to be 120 days.

2.6

THE LISTING CONTRACT WITH THE OWNER

a) Fully explain the terms of the listing agreement to all owners. Make certain it is understood.

b) The owner(s) and you, as an associate of the Company, sign the listing agreement. Any change of the agreement is to be initialed by the owner and the agent. The owners are given a copy of all signed paperwork.

c) If the seller is paying a bonus, the specific conditions for earning the bonus must be put on the listing contract or addendum to the listing agreement.

2.7

TERMINATION OF LISTING

a) A withdrawal from the MLS shall terminate a listing as of a certain date. It shall be withdrawn from the MLS, and lockbox and signs shall be removed from the property. Prospects who have seen the property, according to the terms of the listing agreement, remain our prospects. With this exception, the owner is otherwise free to dispose of the property in any manner following an approved cancellation. i.

The designated Broker must approve a termination of listing.


ii. Both seller(s) and the designated Broker must sign the Termination of Listing Agreement (TAR-1904). You should furnish the owner with a list of your prospects in writing prior to the cancellation. iii. The designated Broker 0only may execute withdrawals in the MLS. If withdrawn, no agent within the listing office can add this property to the MLS for 30 days without written authorization from the Broker. iv. It is recommended that agents require a termination fee. 2.8

OFFICE PROCEDURE – MLS SUBMISSION OF NEW LISTINGS

a) The listing forms are to be thoroughly completed for every exclusive listing and are to be submitted to the MLS within 48 hours, unless otherwise instructed by the seller.

b) Late or missing information fees or penalties charged by MLS are the responsibility of the listing sales associate.

c) Sales by MLS, REALTOR® brokers of our listings will be allowed. Real estate companies selling a listing of this Company's will be paid per the fee stated in the MLS compensation entered for each listing. The fees paid to the co-operating brokerage companies could vary.

0

2.9

SIGNS

a) A "For Sale" sign is a most important selling tool. That sign finds buyers that want the location and like the exterior of the home. After the entire listing package has been placed in the Company’s virtual file system, "For Sale" signs will be placed on the listed property within 24 hours. It is the agent’s responsibility to maintain signs in a clean and orderly manner while displayed. It is the listing agent’s responsibility to add their name rider and sale pending signs. A listing agent's name rider on the "For Sale" sign will create added calls to the listing agent when calling for information of the property. It will increase your sales to see the "For Sale" sign. A brochure box is highly recommended on each listing.

b) It is vitally important that you conform to the communities’ ordinances and sign policy on each listing that you take. It is the sole responsibility of the agent to research all ordinances and sign policies. If you violate the sign ordinance, any fine shall be your responsibility, not the Company’s.


c) Arrows and directional signs may or may not be allowed to be placed on public property, depending on local ordinances. It is the agent’s sole responsibility to research all ordinances and sign policies before placing any signs on public property. Public property includes highways, parks, playgrounds, and parking areas on residential streets. You must have the property owner’s permission to place signs on private property.

d) In the event an individual sign must be designed, painted and erected for special purpose listings, such as commercial, industrial, and vacant land0 development, the signs must have the Company's approval as to the design. •The sign must be removed from the listed property within two days of closing or expiration of the listing. Agents are responsible for returning all Company owned signs to the office prior to closing or upon expiration of listing. The cost of unreturned signs will be deducted from commissions.

2.10 SALES ASSOCIATE RIGHTS TO A LISTING

a) If a seller wishes to change listing agents, the designated Broker will be consulted and a new agent assigned to the listing. Remember, you cannot cancel or withdraw the listing without the consent of the designated Broker. It is in the Company’s best interest to try to change listing agent(s) if the seller is unhappy with the original listing agent. The original listing agent, as long as they are still associated with the Company, may receive a referral fee of up to 30% of the listing commission depending upon the circumstances of the case.

b) When a Company listing expires, the original listing associate forfeits all rights to the listing, including but not limited to, the referral fee.

2.11 JOINT LISTING WITH ANOTHER COMPANY ASSOCIATE

a) It is the responsibility of the associate jointly listing a property to make their own arrangements, setting forth their working agreement in writing. The understanding will include advertising and open house rights, sign calls, all prospects and listings obtained through the listed property.

b) If there is not a written understanding among the associates and a dispute arises, the Company will consider commissions to be paid out and prospects and listings obtained as a result of the joint listing to be 50/50 between the associates. Any advertising costs incurred will be that of the agent initiating the cost; open house rights are shared


equally; sign calls will be rotated to the available agent at the time of the call. 2.12 COMPETITION WITH ANOTHER COMPANY ASSOCIATE

a) If in attempting to list a property, the owners state their intention to list with a fellow associate, you are to agree with the owners, indicate they have made a good choice, and leave. It is prohibited to continue to pursue the listing under these circumstances. Inform the named fellow associate of the owner's intention to list with that associate.

3.0 BUYER REPRESENTATION AGREEMENT SECTION 3.1

INTRODUCTION Nextage Lone Star Realty sales associates are encouraged to earn their Accerdited Buyer’s Representation Designation from National Association of REALTORS®. Newly licensed sales associates will be required to work with either the designated Broker or a ‘mentor’ agent through the completion of three transactions as a buyer’s representative. The ‘mentor’ will be entitled to a fee of 25% for their assistance in completing the transaction. This agreement between the agents must be in writing.

3.2

BUYER REPRESENTATION AGREEMENTS –OBTAINING AND SERVICING a) Types of listings

1. Exclusive: The buyer agrees to purchase a property only through the Brokerage Company. This applies to properties listed, whether in the MLS or otherwise, which would include properties that are FSBO, builder’s properties, or any unlisted property. The Exclusive Buyer Representation Agreement should always be used.

3.3

Buyer Representation Agreements- Form and Information 1. Residential Buyer/Tenant Representation Agreement (TAR-1501) must be used to represent the buyer or tenant. 2. Fully explain the Buyer Representation Agreement to the Buyer(s) and obtain all necessary signatures. All parties in the transaction MUST sign the agreement, i.e. husband and wife, partnerships, or any other legal entity. The only exception to this would be if the buyer, due to cultural customs, will not allow one of the spouses to sign the agreement. The party who will be making application for the loan and qualifies to purchase the property must sign the agreement. i. When taking a buyer listing, make sure you have completed all of the


necessary paperwork below and as required for the file and furnish copies of all signed paperwork to the buyer. • IBS (TAR-2501) • Buyer/Tenant Representation Agreement (TAR-1501) 3.4

Length of Agreement Terms of the agreement will vary from buyer to buyer. However a minimum period of 90 days is recommended in order to purchase and close the transaction. Keep in mind that all agreements can be extended with the consent of the parties.

3.5

Cancellation of the Agreement ONLY the Broker may cancel the agreement. If a buyer wishes to cancel their agreement with the Brokerage Company, explain to them that they will need to speak to the Broker in order to accomplish that. It will be the policy of the Brokerage Company to try to assign the buyer to a different agent if they are unhappy with their current arrangement. It will always be the policy of Nextage Lone Star Realty to try to save the client.

3.6

Reserved Properties

3.7

Submission to the Office

3.8

Withdrawal

Reserved Properties: If a buyer has been previously negotiating on a property prior to signing the Buyer Representation Agreement and wants to exclude that property from their agreement, management will allow the exclusion for a period of 7 days. After that time, Nextage Lone Star Realty will be compensated if the Buyer purchases that property.

The complete file for the Buyer must be turned into Nextage Lone Star Realty within 48 hours of signing the Buyer Representation Agreement. The Agent may keep one set of all forms for their working file.

If the Buyer Representation Agreement is canceled, it is the obligation of the Buyer’s agent to furnish a list of all possible properties under consideration that were presented by Nextage Lone Star Realty and to protect that list of properties with a 180 day period. If the Buyer lists with a different Brokerage Company, the protected property list is null and void.


3.9

Other Buyer’s Agents If a Buyer that you come in contact with says they are working with a fellow associate, the fact that they do or do not have an agency agreement will not pertain (the buyer is working with who they say they are working with.) It is especially critical therefore, to ask if the buyer is working with another agent in our firm, or has signed a Buyer Representation Agreement with another company. If the buyer has signed an Exclusive Buyer Representation Agreement with another brokerage firm, you may not pursue that buyer, except at their request as per the NAR Code Of Ethics.

3.10 Commissions | Disbursement Authorization All compensation shall be made payable to the Company and placed in the transaction system via BACK AGENT. All transaction and/or termination fees will be handled as pass-through income and paid through the brokerage. All fees paid by the buyer must be reported on the HUD closing statement. Furthermore, bonuses are considered commission and will be handled according to the Company compensation plan.

4.0

SHOWINGS, OPEN HOUSES AND PROSPECTS

4.1 SHOWINGS OF COMPANY LISTINGS, MLS OR CO-OP COMPANY'S LISTING

a) All showings of occupied properties are to be by appointment or at the direction of the seller. If the seller authorizes showings through the MLS by call first and if no answer go ahead and show, then that must be in writing from the seller.

b) If you arrive at a home and your buyer does not want to inspect the interior, it is common courtesy to go to the door and inform the owner, in person or in a note, that the prospect has chosen not to inspect the home. If the seller is not at home, leave the note and your business card in a prominent place in the home.

c) So that the owner is aware of your identity, leave your business card at every showing. •It is always in your best interest to be courteous to all property owners. Do not make any remarks or give opinions about price, conditions or the listing agent. Extend all the courtesies you would hope your owners would receive from other associates.


4.2

PROSPECT PROTECTION

a) A buyer who currently has a property listed with the Company will be the listing agent’s prospect until their property is sold and closed or the listing expires, unless the buyer specifically requests to be released from the obligation to work with their listing agent on the buying side.

b) Sign calls and/or ad calls are to be directed first to any agent in the office at the time of the call and second to the next agent in the rotation for sign calls.

4.3

VACATIONS / ABSENTEEISM a) You will want to arrange for a fellow associate to take care of your business when you are unavailable. All arrangements between agents as to the handling of buyers, seller and the resulting commission division, will be in writing prior to the consummation of the transaction. The details of that written arrangement are entirely between you and the appointed sales associate. A copy of your arrangement will be given to the Director of Business Development. If no arrangements are made the Company policy will be: 

Agent B shows homes for Agent A and the client buys a home, Agent A will share 25% of commission with Agent B.

If Agent B lists a home for Agent A, Agent B will receive 25% of listing commission.

It is important to cover for your associates in order to keep the client at Nextage Lone Star Realty. Agents are much more willing to help out in a professional manner if they are being compensated for their time.

b) When floor agent or open house agent has initial contact with new prospect, agent is to inquire if "you are currently working with anyone with our firm?" If prospect is an active prospect or seller of another Nextage Lone Star Realty agent, our agent is to act appropriately and contact other agent.

4.4

OPEN HOUSE PROSPECTS

OUR COMPANY POLICIES:


a) Cooperation is a win-win situation for the sellers, buyers and the Nextage Lone Star Realty Sales Associate. Therefore, the following are recommended guidelines for handling situations for Nextage Lone Star Realty open houses with prospects entering and viewing the open house. i.

Any Nextage Lone Star Realty agent may show your open house to a prospect without an appointment, accompanying the prospect through the home. If a sale results from the showing of that prospect, the full sales commission goes to that showing Sales Associate.

ii.

If a Nextage Lone Star Realty agent contacts the prospect in advance of the open house and notifies the open house Sales Associate that the prospect (by name) will be coming to the open house, unaccompanied by the Nextage Lone Star Realty agent, that Sales Associate shall receive 100% of the sales commission, in the event a purchase agreement is written by the referring agent which is accepted by the seller.

iii.

If in the event a Nextage L o n e S t a r Realty S a l e s Associat e has b e e n working with a prospect and has shown t h e prospect homes, develope d rapport, encoura ged the prospect to allow the Sales Associat


e to arrange for the prospect to be shown homes of any interest, a n d prospect s t i l l enters a Nextage L o n e S t a r Realty o p e n house of another Nextage L o n e S t a r Realty S a l e s Associat e , without previous notificati on, the Nextage L o n e S t a r Realty S a l e s Associat e who had been working with the prospect w i l l receive 100% of the sales commiss


ion. The Nextage L o n e S t a r Realty S a l e s Associat e who had been working with the prospect m u s t accompli sh the purchase agreeme nt and follow up. In t h e interest o f professi o n a l courtesy, the open house S a l e s Associat e will contact the other Nextage L o n e S t a r Realty S a l e s Associat e and report t h a t prospect did come through the open house,


w a s intereste d in it and that the Sales Associat e should follow up with t h e prospect iv.

If a Nextage Lone Star Realty agent hosts an open house on behalf of another company listing agent, a written agreement between the parties must be provided to the DBD/Broker in advance of the open house, to identify how prospects will be handled as a direct of the open house efforts. In the absence of an agreement between the associates, any prospect who has attended the open house will become the prospect of the hosting agent and there will be no referral fee or split commission with the listing agent.

5.0

OBTAINING AND PRESENTING THE PURCHASE

AGREEMENT

DISCLOSURE OF SELLERS AGENCY RELATIONSHIP Prior to writing or presenting an offer to purchase a property, remember to fully disclose the agency relationship that you are in at the time. If 0an Intermediary Relationship exists be sure to get the parties consent to act in that position prior to writing and presenting the offer for or to the parties by using the Intermediary Relationship Notice (TAR-1409).

5.2

THE PURCHASE AGREEMENT a)The purchase agreement is the contract that sets forth the intent of both the buyers and sellers. It establishes the basis upon which the listing and sales agent, mortgage companies and attorneys process the sale. Be sure to use the correct form. a. 1-4 Family Residential Contract (Resale) (TAR-1601) b. New Home Contract (Incomplete Construction) (TAR-1603) c. New Home Contract (Complete Construction) (TAR-1604) d. Residential Condominium Contract (Resale) (TAR-1605) e. New Resid. Condo. Contract (Completed Construction) (TAR-1608) f. New Resid. Condo. Contract (Incomplete Construction) (TAR-1609) g. Unimproved Property Contract (TAR-1607) h. Farm and Ranch Contract (TAR-1701)


i. Commercial Contract - Improved Property (TAR-1801) j. Commercial Contract _ Unimproved Property (TAR-1802)

b) All purchase agreement addendums must be signed by all parties. They must be attached to the original purchase agreement.

c) The lack of a complete understanding of all terms of the purchase agreement creates many of our later problems. Make certain all parties to agreement review the entire contract and make every effort to see that they understand the offer.

d) Personal property inclusions and exclusions create problems also. Be exact and complete. The purchase agreement supersedes the listing agreement and the seller's statement of condition. If any fixture is not included specify that exclusion on the purchase agreement. Remember, all personal property included in the sale must be clearly defined in the purchase agreement using the Non Realty Items Addendum (TAR-1924).

5.3

EARNEST MONEY

a) The purpose of the earnest money is to commit the buyer to the purchase. The more earnest money that is presented, the stronger the buyer's commitment is to complete the transaction. The company recommends a minimum of 1% of the sales as earnest money.

b) Have earnest money checks or money orders payable to the Title/ Escrow Company. Never accept cash for earnest money.

c) If the amount of earnest money exceeds the down payment the excess will be returned to the buyer or applied to the closing.

d) State regulations require that deposit of earnest money checks is to be done no later than the next business day after acceptance of the offer.

e) If in the event an earnest money check is returned non-sufficient funds or other cause, the agent must notify the seller and brokers on both sides of the transaction immediately in writing of the returned check.

f)

Any and all earnest money can be disbursed from the title company only at the closing of the sale, or at the cancellation of agreement by the buyer and seller; all parties must sign a Release of Earnest Money (TAR-1904) before the title company can release the funds back to the buyer. Disbursement can also be done by court order.


g) Earnest money on a sale with a first right of refusal contingency must be deposited immediately after all parties sign the purchase agreement. You cannot wait until the contingency is removed.

h) Improper handling of earnest money may be grounds for immediate dismissal of an agent. Improper handling could include failing to deposit earnest money by the specified time or falsely representing that the earnest money has been deposited.

5.4

REAL ESTATE TAXES

a) It is recommended that the Sales Associate explain to the buyers about the Homestead Tax Reduction and Elderly tax freeze, if appropriate.

b) Property valuations may change when a property is sold. DO NOT MAKE REPRESENTATIONS AS TO FUTURE TAXES OR SPECIAL ASSESSMENTS. It is impossible to guess the future actions of the taxing authority.

c) It is recommended that sale associate verify00the seller's homestead property tax classification with the county. Some taxes that are listed on the MLS sheets don’t represent an owner occupied status.

5.5

BUYERS SIGNATURES

a) There may be an occasion when you are able to receive only the signature of one buyer. In this event, the contract should include the available buyers name and “or assignees.” This eliminates the need to get additional signatures. However, make sure that the party who can actually contract (qualify for the loan) is the party who has signed the contract.

b) All changes and corrections must be initialed by all parties signing the purchase agreement; never sign or initial on behalf of the buyer or seller, even when either party has instructed you to.

c) Fax signatures may be sought; however actual signatures are required as soon as possible. Electronic signatures can be used for contracting the agreement as long as the document is coming from the buyer’s email address.

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5.6

APPOINTMENT TO PRESENT THE PURCHASE AGREEMENT

a) Offer on MLS Listing

1. All offers should be typed or printed legibly and earnest money to be made payable to the title company. A copy of the earnest money


check will be made and retained for office files. Black out the account number and routing number on the copy prior to placing in the file.

2. The listing agent/broker should be contacted immediately for presentation to the seller. In accordance with MLS rule 2.3 you will request to be present when the offer is presented.

3. In the event that you cannot contact the listing agent or their representative within the time frame of the purchase agreement, clear all personal presentations to the seller through your broker and subsequently through the listing broker or MLS chairman. Follow the rules of the MLS always.

b) Offer on Company Listing

1. All offers should be typed or printed legibly and earnest money to be made payable to the title company.

2. The listing agent should be contacted immediately for presentation to the seller. In accordance with MLS rule 2.3 you may request to be present when the offer is presented.

3. In the event that you cannot contact the listing agent within the time frame of the purchase agreement, clear all personal presentations to the seller through your broker.

5.7

WHAT OFFERS ARE TO BE PRESENTED

a) Nextage Lone Star Realty Rules and Regulations require all written offers on a property to be presented immediately. It is suggested that the purchase agreement be accompanied by an earnest money check.

b) Oral offers have no validity in real estate transactions and if presented verbally, notify all parties that the offer is not binding until it is in writing. They are unenforceable. Purchase agreements will not be valid until all parties have signed and initialed any changes on the purchase agreement and addendums.

c) In the event there are offers from more than one buyer, all of the offers deserve equal consideration regardless of the sequence in which they were received. All offers should be presented at the same time if possible. The seller’s agent does not have the authority to disclose to the buyer’s agents or buyers that there are multiple offers without0 written authorization from the seller. Upon0 authorization, the listing agent will notify the buyer’s agents of the multiple offer situations and discuss how those offers are going to be presented. Each of the


buyer’s agents should have the opportunity to present their buyer’s offer. If the offers are from buyers that the listing agent represents as well this is a potential conflict of interest , the Broker must be contacted for possible presentation of those offers and/or appointment. (we state earlier that this isn’t allowed so let’s duplicate the verbiage)

d) In the event there is an outstanding counter-offer on a home, a new offer must be presented if received prior to the acceptance of the counter-offer by the first buyer. The acceptance of the new offer should be contingent upon the cancellation of the existing counteroffer.

5.8

PRESENTING THE OFFER

a) The listing associate has the right to present the offer. associate may be asked to present the offer.

b) As listing agent, your primary legal responsibility is to represent the seller. Be certain to meet that responsibility. Don't let those few "little details" slide. They may create legal and financial problems for you and our seller later.

c) Prepare a "Seller's Estimate Closing Statement" and go over it with the seller. A copy of a signed “Sellers Estimate Proceeds” must be in the company file in case another associate is covering your closing. Be certain the facts are correct to the best of your ability.

5.9

ACCEPTANCE OF COUNTER-OFFER

a) An offer may be accepted, rejected or countered by the seller.

1. If the offer is accepted without change, have the seller sign it. The original purchase agreement, addendums, and the earnest money is held (earnest $ is never held?) by the listing firm. The seller receives a copy. The selling agent delivers a copy to the buyer and keeps a copy.

2. If the offer is changed it becomes a counter-offer. In the case of a counter-offer the seller should sign the agreement and the counteroffer. The counter-offer is only a sale when it is signed by the buyer and delivered to the seller or their agent. Copies should be distributed as in 1 above.

3. Never take the verbal assurance of another agent that something "will be O.K.” with the buyer. Don't bother to change the agreement." Get the change made on the purchase agreement

The selling


counter-offer form with signatures, initials, dates, and times; if you do not, you may be legally and financially responsible.

4. When an offer is rejected, all forms and earnest money checks are to be returned to the sales agent and copies will be given to the office manager.

b) Never sign or initial papers on the behalf of the buyer and seller, even when you have been so instructed to by either party. Never make any changes after the purchase agreements have been signed by the buyers and the sellers, except with specific instructions to make changes by buyers and sellers and have buyers or sellers initial the changes made. These changes should be dated if different than the offer acceptance date.

5.10 PURCHASE AGREEMENTS The sale begins and ends with the Purchase Agreement. If the Purchase Agreement is not complete or it is not completely understood by both Buyer and Seller, the chances of a good closing are very remote. Write legibly, type where possible. Re-read the Purchase Agreement, be sure it states, without a doubt, what the client intends. 0 Your sale will be closed according to the terms in your Purchase Agreement. When accepted, the Purchase Agreement becomes a binding contract. Should terms or stipulations be changed in the Purchase Agreement, the listing agent must have an addendum showing the change with times and dates, signed by the Buyer and Seller, in the file prior to closing.

a. All accepted Purchase Agreements must have the following information pertaining to buyer and seller: 1. Present address 2. Phone Number 3. Social Security Number of buyer and seller (if possible) 4. E-mail or Web site (if possible)

b. Purchase Agreements must also have the following necessary information: property address, legal description, sale price,0 date for securing financing, closing and possession dates, sale price on assumptions, inspections, etc.

c. If an offer must be sent out of town for "signatures", a copy of offer with acceptance fax or electronic signatures may be substituted.

5.11 CANCELLATION OF A PURCHASE AGREEMENT


a) A written offer, including the clause "null and void and the earnest money is to be returned to the buyer," may not legally cancel a purchase agreement. A purchase agreement will be legally canceled by a written agreement to cancel between the buyer and seller or by a court order. Associates are required to have a cancellation agreement signed in the event of an agreement being declared "null and void." Use of TAR1902 is required to be used to terminate a contract.

b) A Release of Earnest Money form0 is to be used when an agreement is canceled (TAR 1904). When it is completed, turn it in to the Brokers and they will notify the title company to disburse funds according to the agreed terms of the cancellation agreement. This form is to be signed by the buyer, seller, listing agent and broker.

c) Always discuss any pending cancellations with your broker. d)Earnest money will not be refunded or disbursed until it has been verified that the earnest money check has cleared the buyer's bank. This may take ten or more business days. Upon verification of check clearing the buyer's bank, the earnest money will be disbursed as the cancellation documents instruct the distribution.

5.12 Rejected Offer If the seller rejects an offer or a counter offer rejected by either the buyer or the seller, make sure to write REJECTED on the offer or counter offer. Have the party initial and date the REJECTED area well as the notation of REJECTED or Void across the face of the contract. Rejected offers on Company listings must be turned into the office and retained for one year. If a contract results, the rejected offers on the Company listings must be kept in the transaction file for five years. 6.0

CLOSING PROCEDURES

6.1

COMPLETION OF SALES INFORMATION

a) Allow enough time to close the transaction. Allow time to have an inspection done, financing obtained, a title opinion rendered, to clear title and to prepare the closing papers. If there are delays because of counter-offers, getting out of town signatures, etc. change your closing date and be sure to notify all parties of the change in writing and signed by all parties. Be sure to monitor the contingency deadlines carefully and if a delay is possible contact all parties well in advance so that appropriate accommodations can be made.

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b) The agent then follows each transaction and maintains contact with the lender through the approval or rejection of the loan application.

c) The agent will notify the listing agent when the loan is approved and provide a final loan commitment. That commitment should only be subject to the appraisal of the property.

d) In the event an appraisal is low, the agent will be informed by the lender and will be expected to negotiate between buyer and seller. If negotiation is possible, the new offer will be resubmitted to the loan company for approval. If renegotiation is impossible, listing agent should be informed so various charges incurred may be paid and property may be put "back-on-market."

e) In the event a loan is rejected, the listing agent will be informed. He will be given the opportunity to work out any new avenues of financing, credit, etc. that may be available. All rejections will be discussed with the agent BEFORE they are dropped and the earnest money is refunded and various charges are paid.

f) On sales that have "fallen through" release forms are required. The agent will obtain all necessary signatures prior to the release of earnest money.

6.2

TITLE OPINION The sales agent will coordinate the ordering of title insurance with the title company. The sales agent will0 instruct the Title Company to forward a copy of the opinion to you, the sales agent, as well as the buyer. Upon receipt, the agent is then responsible to put it in the company list file.

6.3

ASSUMPTION PAPERS This company will not accept any assumption transactions without the seller being released of full liability. If the seller indicates that they will stay on the loan, a release of liability will be needed from the seller on a form prepared by the company attorney. When an assumption Purchase Agreement is accepted the associate will call the lender to see if the Buyer must be approved. ASSUMPTION PAPERS CAN BE PREPARED ONLY AFTER BUYER’S LOAN APPROVAL.


a)The sales agent will have the responsibility to order and receive assumption papers timely in accordance with the scheduled closing dates. b)The name of the lender and the LOAN NUMBER must be on the worksheet. Most lenders will not issue assumption papers until they are given a loan number. c)The agent will review all aspects of the transaction with one of the Brokers. 6.4

INSPECTIONS THE BUYER, IF DESIRED BY THE CLIENT, SHOULD ORDER TERMITE AND ALL OTHER INSPECTIONS. Only licensed and properly bonded companies should be offered as choices. The buyer should choose his or her own criteria for an inspector. The agent will provide the buyer a list of inspectors that are licensed and bonded. If the buyer chooses not to get an inspection, they must sign the decline of home inspection form.

6.5

AMORTIZATION SCHEDULES Amortization schedules can be approved for the Buyer and Seller on all contract sales. Both buyer and seller should date and sign final copy at closing.

6.6

FINAL CLOSING DOCUMENTS Closing documents such as deeds, contracts, affidavits, declarations, 1099s etc. will be secured by the sales agent for signatures. Included will be an actual closing statement for the buyer and seller, prepared by the closing company. All signed closing documents must be in the closing file at time of disbursement of all funds. Filing and disbursement cannot be made until all funds are collected from buyer and/or seller. ONLY QUALIFIED CLOSING COMPANIES WILL BE USED TO CLOSE A TRANSACTION.

6.7

DOWN PAYMENT Transactions cannot be filed or recorded nor any funds disbursed until such time as a personal check has cleared the bank account. Most title companies today will require certified funds. Make sure your buyer has


that amount from the title company in time to get the certified funds to close. Post-dated checks CANNOT be accepted and will be returned to associates. Checks cannot be held. All checks will be deposited the day they are received or the next banking day. In the event there is a shortage of funds necessary to settle the transactions, the closing agent may hold the transaction and insist all funds be collected before filing. The lender or closing agent will take care of the filing process in the event a new loan is being secured. When the lender's processing is complete, they will call the sales agent. 6.8

COMMISSION PAYMENT Upon receipt of all closing documents, proceeds, and reporting of the sale to MLS, commission checks are written. Nextage Lone Star Realty commission checks will be completed by the office manager no later than 24 hours following the transaction closing. In order to receive your commission check, you must have submitted all required closing documents to the Back Agent transaction system. You will be notified through the system of ANY documentation required for closing. If all required documents have been uploaded you will receive a message letting you know that your commission check is ready for pick up. Nextage Lone Star Realty allows agents in good standing to have the option of “table funding” and requires all agents to follow the same procedure for the uploading of documents to Back Agent. If 0 an agent is missing documents, the office manager/Broker will notify the agent of the missing items and0 this could then delay your “table funding” payment. Missing documents will result in the Disbursement Authorization to be held until all documents are received. Nextage Lone Star Realty reserves the right to revoke “table funding”

privileges from agents who are not in compliance or who have repeatedly missed documentation or abused the privilege. Agents must be current on all office and technology fees in order to remain in good standing. 6.9

EARLY POSSESSION BY AGREEMENT

a) Do not give possession of a property to a buyer without a properly executed Buyers Temporary Residential Lease (TAR1911). We must have the signed approval of the seller and buyer. Both should make


sure they have proper insurance coverage on the real property and their personal property within the real property.

b) Any money deposited under an early possession agreement shall be funds payable directly to the seller.

c) The moving of furniture or other possessions into a property prior to closing of a sale must be approved in writing by both the buyer and seller. The written agreement shall include that the seller is not responsible for the buyer's property. The buyer should have an insurance policy as above.

6.10 ATTENDANCE AT CLOSINGS

a) The sales agent will be aware of their closings. Attendance is encouraged, as it is excellent public relations. It is best to stay in the background. The client appreciates your assistance. In the event you see that something is not in accordance with the purchase agreement, you should politely call this to the attention of the closer. The sales agent will have the responsibility to order and receive closing papers in order to verify correctness, especially buyer closing figures and seller net proceeds.

b) Upon receipt, the sales agent will review the closing statement with the client. 7.0

ORGANIZATIONAL AND ADMINISTRATIVE PROCEDURES

7.1

TERMS OF ASSOCIATION All personnel acting in a sales capacity are "Independent Contractors." You are self-employed and are responsible for your own records and payment of State and Federal Income Taxes and self-employment tax. You will receive a 1099 tax statement from the Company at the end of each year showing the total commissions paid to you. Additionally, if you have received any residual income from your down-line, you will receive a 1099 from Nextage Realty International LLC, (NRI), the franchisor. You must sign an Independent Contractor agreement annually.

7.2

CONDITIONS TO ASSOCIATION

a) State Law requires that all associates selling or renting real estate be tested and licensed by the State. You are responsible for keeping your license current by referencing renewal dates and education


requirements to renew. The agent is responsible for the fee for renewing his or her own license.

b) The Company is a REALTOR® firm. We require that you immediately become a member in the LOCAL, STATE AND NATIONAL BOARD OF REALTORS® AND SUBSCRIBE TO THE CODE OF ETHICS OF THE NATIONAL ASSOCIATION OF REALTORS®. The fee to belong to those associations is at the expense of the sales associate.

c) Newly licensed agents that are within their first year of real estate are required by Nextage Lone Star Realty to begin the process of obtaining their GRI designation. Each of the three modules of the designation will award you 30 hours of your SAE requirement. The cost of this designation is at the agent’s expense.

d) ALL agents sponsored by Nextage Lone Star Realty will attend the Broker’s Responsibility course within one year of accepting the terms and conditions of this manual. The cost of this course is at the agent’s expense. The purpose of this requirement is to inform every associate of their role in the compliance of the brokerage and the responsibilities the brokerage has to the associate. This course in no way makes an associate responsible for broker duties.

7.3

CONDUCT OF ASSOCIATES In order to succeed in working with the public, you will want to present yourself in a professional manner.

a) Live by the mission and vision, always b) Abide by all laws, rules and regulations in accordance with Texas Real

Estate Laws c) Abide by the National Association of REALTORS® Code of Ethics0

7.4

OFFICE CONDUCT a). The front reception area is the most important area in our office. At any given moment, a client or other REALTOR® could walk in. We have trained our support staff to always portray a PROFESSIONAL IMAGE while in this area. Not only must we consider walk-in traffic, but we must also be aware of phone calls coming into the office – the client on the other end of the line may hear what is being said in the background. Some of the things we consider inappropriate are: loud talking, talking with a negative “tone” in your voice, cursing, addressing a complaint to another co-worker when others are present or could be present at any moment. We believe such confrontations must not occur. We would like everyone to address ANY complaints, comments or frustrations solely to the Director of Business Development.


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b) The Dress code for Nextage Lone Star Realty agents and staff is outlined below: ** Nextage Lone Star Realty recommends that agent partners dress within the Nextage branded colors of blue and red when attending public, real estate and training events/functions. Women: Pant or skirt suit Dress skirt or dress slacks with coordinated blouse and/or sweater Business professional “dress” Blazer with dress skirt or dress slacks and blouse or sweater Dress shoes or dress sandals Nextage branded clothing Men: Dress slacks, dress shirt, and tie Suit, dress shirt, and tie Sport coat, coordinated dress slacks, dress shirt, and tie Dress shoes and dress socks are required with all of the above. Nextage branded clothing. Nextage Lone Star Realty 0considers the following unacceptable forms of dress for conducting real estate business and does not allow the following in the office or at event where the public is attending.  Spandex, lycra, or transparent clothing  Cutoffs or ragged clothing  Clothing with inappropriate words and pictures  Strapless tops of any kinds  Jeans- unless there is a specific event  Tennis shoes  T-shirts with explicit wording or offensive language  Sweat shirts, sweat pants, or sweat suits  For women, shirts or blouses that are inappropriately revealing0  Tank Tops without proper overlaying jacket or blouse 7.5

LIMITATION OF AUTHORIZATION TO SALES ASSOCIATES The Company is not and shall not be liable for any expenses or obligations incurred by associates, unless a specific written authorization is granted by the Director of Business Development and/or Broker prior to the obligation being entered into.

7.6

RESPONSIBILITIES OF SALES ASSOCIATES


As an "Independent Contractor," accurate representation of all facts is your responsibility. A lack of accuracy will be at your expense. You will also be responsible for any losses sustained by reason of your errors or omissions in connection with your preparation of documents in real estate transactions. The Broker is explicitly responsible for the supervision and control of all the activities conducted on behalf of the sales associates as necessary to secure full compliance with the Real Estate Law, including but not limited to the supervision of salespersons in the performance of acts for which a real estate license is required. They are also similarly charged with the responsibility to supervise and control all activities performed by their employees and agents in their name during the course of a transaction for which a real estate license is required, whether or not the activities performed require a real estate license, such as those of an assistant. To assist brokers to properly carry out their duty to supervise and control activities conducted on their behalf during the course of a licensed transaction, it is important for the broker to know and identify those activities which do and do not require a real estate license. This knowledge assists the broker to use licensed persons when required, and to extend and provide the necessary supervision and control over licensed and non-licensed activities as required by law and good business practices. Broker knowledge and consent is a prerequisite to the performance of these unlicensed activities, since without these elements there can be no reasonable assurance that the activities performed will be limited. These "Guidelines", when strictly followed, will assist licensees and their employees to comply with the license requirements of the Real Estate Law. They present specific scenarios, which allow brokers to organize their business practices in a manner that will contribute to compliance with Real Estate Law. Brokers should be aware that it does not take very much to go from unlicensed to licensed activity. 7.7

AUTOMOBILE LIABILITY INSURANCE As an "Independent Contractor" - you are responsible for sufficient insurance coverage. State law requires that you have insurance coverage on your automobile. We require that you carry at lease a minimum of $250,000 - $500,000 Bodily Injury or a $300,000 single limits. Please check to make certain you have proper coverage for your own protection. The Company is not responsible for accidents. The Company should always have current copy of your automobile insurance policy and be named as an additional insured.

7.18 COMPANY COACHING AND TRAINING


a) The primary responsibility of the Director of Business Development (DBD) is to coach and train agents to their highest levels. The coaching is provided to the agents with no additional costs, as long as the Agent remains in good standing. A gents are expected to interface with the DBD and follow accountability standards of the program; those are set with the DBD on a person-to-person basis without discrimination.

The coaching schedule is as follows:

GCI level: (?) GCI Level: GCI Level:

5million and up

4 sessions – one on one weekly

3-5 million 2 million and below

3 sessions- one on one weekly 2 sessions-one on one plus

Zero production

Rising stars program

1 group call

GCI Level:

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All newly licensed agents will participate in0 the Rising stars program, which is a 10 week course covering the basics of real estate in a classroom setting. The course fee is $800.00’0 however new agents may “apply” for a scholarship (either full or partial) and all graduates of the rising stars program will be subject to a $300.00 coaching fee upon completion of their first transaction.

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b) Weekly Productivity Meetings | Business Development Business Development | Productivity 0meetings are held every Tuesday from 8:30 am to 10:00 am. Agent participation in these meetings is crucial and Nextage Lone Star Realty leadership encourages all agents to attend.

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7.9

TERMINATION

a) When leaving the Company you must return all property given or assigned to you including: Policy Manuals, training material, keys to the office, MLS key lockboxes, signs, supplies and library materials.

b) All unsold listings may leave with the listing agent.0

c) All commission payouts shall be subject to provisions to those in place. You are entitled to receive commissions on booked transactions that close after your date of termination. If you are unable to perform the


necessary tasks to close the transaction, the Company reserves the right to assign another associate the closing responsibility and compensate them up to 30% of your portion of the commission. (What about the CAP if they are on an 80/20?)

d) The Company shall be liable only for actual commissions received.

e) The Company shall withhold from the commissions otherwise due and owing any income advances, advertising overages, MLS charges, or other money owed the Company by the associate. e)There will be no bonus commissions, trips, incentives, etc. paid to an agent once they are no longer licensed with the Company. f)Severance is not effective under the licensing laws until the Department receives the notice of severance and the Sales Associates’ license. g)In the case of Buyer Representation agreements in place at the time of the termination of the relationship, the company shall retain the buyers who have signed a buyer representation with the company. If there is no written agreement in place, the buyer is able to decide whether to work with the Company or the agent who represented them previously.

7.10 ERRORS AND OMISSIONS INSURANCE The Company has Errors and Omission insurance through Travelers Casualty and Surety Company of America. The policy is a $1,000,000 aggregate policy with a $2,500 deductible for agent. The agent is welcome to also obtain individual Errors and Omissions Insurance at their expense. Under circumstances where the E & O insurance is called upon to cover the damage in a lawsuit or otherwise, the sales associate will be responsible for paying the deductible. There may be circumstances where E & O insurance may not provide coverage, i.e., fraud, commercial environmental issues, or a transaction where the Sales Associate acted as the principal. In those cases the sales associate will be responsible for the expenses that occur from the case. 7.11 AGENT EXPENSES a) Nextage Lone Star Realty supports individual agent branding; therefore all expense as it relates to the marketing and operations of an agent’s real estate business are their responsibility. b) Nextage Realty International has an agent technology fee that is required for all agents joining the brokerage. 0Nextage Realty


International mandates the $125.00 fee and the Company does not have the authority to waive the fee. The renewal technology fee is due0 on the anniversary date of the associate joining the Company and is $80.00 as of January 1, 2013. c) As of February0 1, 2013 all agents are assessed a Nextage Lone Star Realty monthly office technology fee of $49.00. The fee is due by0 the 20th of each0 month. The office asks all agents place a credit card on file to automatically debit the fee; however it is within the providence of the agent to pay the fees via check or cash. d) Any office fees not paid by the 21st of the month will be assessed a $25.00 late fee 0 e) Every time an agent receives a commission check, any outstanding balance they may have with the company will be deducted. f)If an associate is responsible for equipment rental such as desk costs, computers and software, fax documents, copies, they will be billed on a monthly basis. The fees are due by the 20th of each month. Any additional costs due to be paid by the agent shall be billed in the same manner.

7.12 COMPLAINT POLICIES a) Complaint against another real estate affiliated business. i.

No phone calls are to be made or letters written by sales associates to reprimand or complain about the actions or services provided by any real estate affiliated institutions or businesses. This would also include any real estate firm.

ii. Any such justifiable reprimand or complaint will be first discussed with the Director of Business Development and Broker and such letter or call will be made or sent with DBD and/or Broker input & consent. b) Complaints received. i.

If 0letter or email receives a complaint, the correspondence 0is to be forwarded to the Broker for review and will follow the same procedure at that point as it would for telephone complaint.

ii.

If a complaint is received by phone from a client, the member of the support staff tries to obtain as much information as possible if the DBD or Broker is not available. If the DBD or Broker is available, the call is immediately transferred to them. The DBD or Broker also makes an


effort to obtain as much information as possible about the complaint. The DBD/Broker at that point will try to set up an appointment to meet with the caller at their home (with the client/customer if applicable). After the meeting, the DBD/Broker will have a meeting with the sales associate involved to get their side of the story. Depending upon the complaint/problem, the DBD/Broker will try to resolve the situation by coming up with a solution after hearing both sides. If the parties involved in the complaint/problem do not agree to this solution, it is referred to the mediation at the Board level. If an acceptable resolution cannot be mediated, then the parties have the right to pursue other options. c) The sales associate must agree to cooperate and comply with any order as per the NAR Code of Ethics. d) If, unfortunately, a lawsuit is filed, and the sales associate’s conduct is determined to be at fault, the associate will be responsible for the judgments, damages, losses, costs, expenses, etc. incurred by the Company in the defense of the lawsuit. They shall also be responsible for those costs even if they win. The Company shall be consulted regarding the defense of the case. e)If it is determined that the errors in the transaction are as a result of non-compliance of the policies/agreement it may be cause for suspension or termination from the company. f) In disputes between agents within the Company, any written agreement that was created will prevail. (i.e.: there is a written agreement for an agent to handle another agent’s business while on vacation.) 7.13 The Nextage Lone Star Realty computer network allows access to resources and services through Internet connectivity. All Internet users are expected to be familiar with and to comply with this policy. The Company is committed to preventing the occurrence of inappropriate, unethical, or unlawful behavior by any of the users of its computing systems and telecommunications networks. The scope of this policy includes the following information: Internet services Resource usage Expectation of privacy Corporate image Contacts for usage issues and questions Periodic reviews The scope of these policies focus on issues associated with the Company’s host computers, PCs, routers, terminal servers, and other devices that


support access to the Internet. Violations of the Internet Usage Policy will be documented and can lead to revocation of system privileges and even termination with the company. The company may also be required by law to report certain illegal activities to the proper enforcement agencies. By signing the acknowledgement of receipt of the company’s policy and procedures manual, the agent acknowledges that they have read and understand the internet policy of Nextage Lone Star Realty. a) Usage Threats: The Internet connectivity presents the company with new risks that must be addressed to safeguard the facility’s vital information assets. These risks include inappropriate use of resources. This would apply when a company computer is being used for personal use, i.e. surfing the web, checking the stock market, and using the computer for illegal use. b) Acceptable User Services will include: i. ii.

iii. iv.

Email0 sending and receiving of email messages to/from the Internet Navigation-www services as necessary for business purposes. Full access to the Internet; limited access from the Internet to dedicated company public web servers only. File Transfer Protocol (FTP). Send data/files and receive inbound data/files, as necessary for business purposes. Management reserves the right to add or delete services as business needs change or conditions warrant. All other services, not listed, will be considered unauthorized access to/from the Internet and will not be allowed.

c) Termination of affiliation with the company will cause the removal of privileges, including the use of the email address of the company that an agent might have. The domain name and all email addresses linked to the company remain the ownership of the company and not the agent. d) Usage Policies: Internet usage is granted for the SOLE purpose of supporting business activities necessary to carry out job functions. Acceptable use of the Internet for performing job functions might include: communication between the associates and employees of the company, IT technical support downloading software upgrades and patches, review of possible vender web sites for product information, reference regulatory or technical information, and research. e) All users of the Internet should be aware that the company network creates an audit log reflecting web usage, sites visited and length of time at a site. This log is periodically reviewed. Prohibited usage


would include acquisition, storage, and dissemination of data which illegal, pornographic, or which negatively depicts race, sex or creed is specifically prohibited. Also included would be accessing company information that is not within the scope of one’s work, misusing, disclosing without proper authorization, or altering customer/client information. Deliberate pointing or hyper-linking of company Web sites to other Internet www sites whose content may be inconsistent with the aims or policies of the company, anything that would lead to civil liability or otherwise violate any regulations, local, state, national or international law would be a violation of the policy. Assume that all materials on the Internet are copyright and/or patented unless specific notices state otherwise and the use, transmission, duplication, or voluntary receipt of material that infringes on those copyrights are forbidden. Management reserves the right to examine E-mail, personal file directories, web access, and other information stored on company computers, at any time and without notice. This examination ensures compliance with internal policies and assists with the management of company information systems. f) The Transmission of any proprietary, confidential, or otherwise sensitive information without proper controls is a basis for termination of affiliation with Nextage Lone Star Realty as is the creation, posting, transmission, or voluntary receipt of any unlawful, offensive, libelous, threatening, harassing material, including but not limited to comments based on race, national origin, sex, sexual orientation, age, disability, religion, political beliefs or any form of gambling. g) No one shall with a company email address (i.e.: johnsmith@NextageRealty.com) forward any chain letters, cartoons, jokes, etc. or participate in any on-line contest or promotion. h) No one with a company email address shall download any shareware programs or files for use without authorization in advance from Management. i) EMAIL Confidentiality: Users should be aware that E-mail is NOT a confidential means of communication. The company cannot guarantee that electronic communications will be private. Emails can be forwarded, intercepted, printed, and stored by others. Users should also be aware that once E-mail is transmitted it might be altered. Deleting an email from an individual workstation will not eliminate it from the systems across which it has been transmitted. A further caution is to remember this before emailing comments that may come back to haunt you! EMAIL must have the correct company information in the signature box. Upon joining Nextage


Lone Star Realty agents must submit to the Director of Business Development a copy of the signature box that you use for business for approval. j) Maintaining Corporate Image is very important. When using company resources to access and use the Internet, users must realize they represent the Company. Whenever agents state an affiliation to the company, they must also clearly indicate that the options expressed are my own and not necessarily those of the company. Questions may be addressed to management. The management must approve any posting of materials. This includes company material, which has been placed on mailing lists, public news groups or social media groups. k) EMAIL messages that relate to a real estate transaction need to be kept, whether saved to a disc, blind-copied to the broker, printed, or stored in a web-based transaction management site. It is imperative that ALL emails are saved in case the transaction is ever in dispute. l) Personal Websites: It is imperative that all licensees’ websites have the company’s logo and contact information in the format approved by the management. The Director of Business Development must approve all websites especially as it relates to links to 3rd party providers, such as inspectors, etc. The REALTOR® logo must be used in accordance with the policies of the National Association of REALTORS®. The website must have an email privacy statement approved by the company. m)The listings and marketing information should be updated and managed, especially listing shared with other sites. Photo shop may not be used to alter photos on the websites or in the MLS that would give a deceptive picture of the property. Unauthorized framing of content is a serious issue. Permission must be obtained from the other website before framing. n) Social Media: Facebook, LinkedIn, blogging, etc. present an issue for the brokerage company and the licensees. One of the main concerns is the information that is sent out to those sites. While it would be great to list all of the issues that could surface from the use of these sites, it is important to note that if the brokerage expects that the licensees who work for them will use common sense when ‘socializing on the net’. Most importantly, blogging must be accurate and not use material that is copyrighted. The management may monitor those blogs on a regular basis.


o) Domain names: The purchase of domain names must abide by the SOP-12-12: REALTORS® shall not: 1) use URLs or domain names that present less than a true picture, or 2) register URLs or domain names which, if used, would present less than a true picture. If you have a domain name, which would violate this SOP, you MUST notify the brokerage immediately and take a corrective measure. URLs may not begin with Nextage as this implies direct affiliation with the Franchisor. p) Seller’s Permission: The seller must sign the consent form to allow the brokerage to advertise their property on the Internet. They must consent to which pictures are being used in the promotion of their property, including both still photos and virtual tours. The seller must also be informed as to the company’s policy on IDX and that their properties may or may not be featured on other company’s websites. q) ANTI-VIRUS software: All computers MUST have active anti-virus software, whether they are owned by the brokerage or by the agent. A virus sent through our server could be devastating to the company’s information. r) Email marketing: As in faxing, the licensees need to have a system by which a consumer can opt out from receiving emails, advertisements, and other forms of marketing through the internet. This would include e-newsletters and other promotions. 8.0

COMMISSION

8.1

COMMISSION SCALES Providing a most competitive commission scale to our sales associates along with the finest in services, staff facilities and reputation is always our foremost desire at Nextage Lone Star Realty. Each agent will have their commission splits identified in their independent contractor’s agreement. These commission splits are between the licensees and the brokerage and should be kept confidential. Nextage Lone Star Realty offers its agent the following commission splits in accordance with the CAP as outline in section 8.3, policy NLSR 1000A. 70-30 for agent under $999,999 in Volume in a fiscal year 70-30 for agents who have under $2M in Volume earned in a fiscal year see below 80-20 for agents who have earned 2M plus in Volume in a fiscal year


The Director of Business Development, acting in accordance with the policy, will determine a commission split based on verifiable income and award splits accordingly. The DBD may/may not reduce an agents or teams commission|cap based on production levels.

8.2

COMMISSIONS PAYABLE

a) The Listing and Selling Commission percentage referred to herein shall apply only to the real estate commission received by the Company in connection with the sale or lease of real property by the sales associate. The commission shall be determined after any and all adjustments.

b) On all Company listings, the listing and/or selling agent(s) will be paid on the gross commission collected from the seller, less any adjustments.

c) On sales of co-op listings, the agent's commission will be figured on what the Company receives.

d) In the event there is more than one listing or one selling agent, the commission on that side of the transaction will be divided as the agents have agreed in writing and each agent will be paid that percentage of their commission bracket. In the absence of a written agreement, the commission will be on a 50/50 basis. e)Only licensed sales associates can be paid a commission. Unlicensed Assistants cannot be paid a commission and only can be paid salaries. f) If the commission check is for some reason a personal check written by a seller or buyer, the commission will not be paid to the sales associate until the check has cleared the bank.

8.3

Policy NSRL 1000A CAP SYSTEM Effective January 1, 2013

The CAP system is being instituted to encourage our agent partners to build a business beyond your own production by utilizing the NRI’s revenue sharing system. Nextage Lone Star Realty has established the following program to set a limit on the amount of deductions taken annually from an agent’s Net Commission earned. The limit amount is referred to as a CAP. Once an agent’s deductions have reached the annual CAP, the agent will receive 100% of the Net Commission earned on every transaction for the remainder of the CAP anniversary year. Nextage Lone Star Realty reserves the right to either lower or raise the CAP with a 60day written notice to all of its agent partners.


NET COMMISSION INCOME is herein known as the dollar amount owed to the agent after the franchise fee and transaction fee are paid to Nextage Lone Star Realty. There is NO CAP on the transaction fee at this time.

The CAP according to status: STATUS: Individual agent: Individual is described as a single agent conducting business under his/her own name with no team affiliation. Team affiliations for the purpose of this document do not refer to the Nextage model of down line or revenue sharing. Individual agents acting as a sole entity will be afforded a $22,000 cap in their anniversary year. CAP is paid based on the NCI commission after transaction fee and 6.5 % franchise fee is paid to Nextage Lone Star Realty. Once an individual has reached the $22,000 CAP in their anniversary year, the GCI commission spilt is now 100 % to the individual agent until the end of the anniversary year. Agents who are on a 80/20 commission split and do not CAP in an anniversary year automatically revert to the 70/30 or 75/25 from above commission split in the following year. STATUS: Team- TRADITIONAL MODEL Teams for the purpose of this policy are described as one or more persons acting under one entity for the purpose of selling real estate as a branded name. (i.e.: The Diana Keyes Real Estate group.) It is not indicative of the “team” reference in the Nextage model of “Revenue Sharing.” Teams are lead by one soul individual herein referred to as the RAINMAKER. All teams are required to have a “team agreement” in place that is approved by the Director of Business Development. Teams are afforded the following CAP in the anniversary year. CAP is paid based on the NCI after transaction fee and 6.5 % franchise fee is paid to Nextage Lone Star Realty. Once an team has reached the CAP in their anniversary year, the GCI commission spilt is now 100 % to the individual agent until the end of the anniversary year.

Agents who are on an 80/20 commission split and do not CAP in an anniversary year automatically revert to the 70/30 or75/25 from above (?) commission split in the following year. Rainmaker:

$22,000 (80/20 commission split)


One team member Second team member Third team member Each additional member Transaction coordinator Executive Assistant

$33,000 $44,000 $55,000 add $11,000 no cap - no compete no cap - no compete

The Director of Business Development reserves the right to negotiate with verifiable teams the CAP based on the previous years GCI. Teams for the purpose of this policy are described as one or more persons acting under one entity for the purpose of selling real estate as a branded name. All team CAPS and team structures are reviewed bi-annually with the DBD, in order to remain in integrity and assure that the proper CAP numbers are in place. ** All team members would have an additional split with the Rainmaker with a team agreement in place. All agreements will be on file with the Office/Compliance manger and/or the Director of Business Development of Nextage Lone Star Realty. ** STATUS: Partnership- TRADITONAL MODEL A partnership is when one or more individuals split production equally amongst themselves. (i.e.: The Keyes-Covelli Real Estate Group.) All partnerships are required to have a “team agreement” in place that is approved by the Director of Business Development. Partners in accordance with the Nextage model of “revenue sharing” are not allowed to “stack“ in a down line. Partnerships are afforded the following CAP in the anniversary year. CAP is paid based on the NCI commission after transaction fee and 6.5 % franchise fee are paid to Nextage Lone Star Realty. Partnerships who are on an 80/20 commission split and do not CAP in an anniversary year automatically revert to the 70/30 or 75/25 from above commission split in the following year.

Partner(s) A: Herein known as Partner A

$33,000 CAP

(80/20 commission

split) B: Herein known as Partner B Partner A

All

STATUS: Married / Domestic Partners:

production

funnels

through


Married and Domestic Partners are afforded the following CAP. C AP is paid based on the primary commission after transaction fee and 6.5 % franchise fee is paid to Nextage Lone Star Realty. Couples share one $22,000 dollar CAP with all production through one partner. Domestic Partners must prove as defined by law that there is a legal document supporting the Domestic partnership; marriage certificate, insurance papers, civil union document, etc. will be acceptable proof. 0

8.4

ADJUSTMENT IN COMMISSION

a) Prior to any adjustment in the commission, the adjustment must be approved by the Broker and/or the Director of Business Development, or the adjustment will be deducted fully from associate's portion of the commission.

b) On a co-op sale, when a commission adjustment is necessary, you must obtain the approval of the Broker and/or Director of Business Development and the written approval of the co-operating company. The approved written adjustment must be provided to the closing agent of the transaction.

8.5

BENEFICIAL COMMISSIONS A beneficial commission occurs when, for example, the sales associate might be leaving their commission in the transaction in order to become a principal in the transaction. Arrangements must be made with the Broker in these cases.

8.6

RENTAL AND LEASING FEES The net brokerage fee received by the Company in connection with the lease or rental of property will be split with the associate according to the commission schedule. A leasing fee will be paid for a renewal or extension of a lease, provided said extension or renewal option is in the original lease.

8.7

REFERRAL FEES - APPRAISAL FEES Referral fees (not corporate service referrals) and appraisal fees will be split in accordance with the associate’s commission schedule. No bonus level applies. The agent will pay referral fees paid out to other Brokerage Companies from the Brokerage Company, not directly.


8.8 TRANSCATION FEES Nextage Lone Star Realty assesses a transaction fee for all closing contracts; the fee schedule is outlined below. Nextage Lone Star Realty reserves the right to change the transaction fee amount at anytime with a 30 day written notice to all of the agents. The President or Director of Business Development can waive the transaction fee for any “transaction”. 2013)

The current transaction fee model (as of January 1, Leases under $800.00 Leases $800-$1999.99 Leases $2000.00 and over Home/Land Sales up to $1999 Home/Land Sales $2000 and over

$25.00 $50.00 $125.00 $125.00 $250.00

8.8a TECHNOLOGY/CONSORTIUM FEE: As of February0 1, 2013 Nextage Lone Star Realty will be implementing a technology fee to all agents. The fee of $49.00 is due on or before the 20th of the month. Payment0 of a technology fee after the 21st are assessed a $25.00 late fee. Agents are encouraged to place a credit/debit card on file and have payments automatically debited from the account on the 20th of the month. Nextage Lone Star Realty reserves the right to change the amount with a 60 day written notice to all agents. 8.8

BONUSES All bonuses paid by sellers are to be paid to the Company and will be paid through Nextage Lone Star Realty and are subject to all commission/cap policies. If the bonus is paid separately it will not incur an additional transaction fee.

8.9

DEFERRED COMMISSIONS Prior management approval is required in all cases. Deferred commissions are definitely not encouraged.

a) When all or part of the commission is received on an installment basis, the associate will be paid on the agent’s earning bracket prevailing at the time of closing.

b) The decision to defer a commission, in whole or in part usually becomes a factor in putting a sale together. For this reason, the listing/selling agents, sales manager, and sellers as applicable, should be involved in drawing up the deferred commission agreement or have


an attorney prepare a promissory note which will be recorded. schedule of payments should be included in that document.0

A

8.10 RIGHT OF COMPANY TO ADJUST COMMISSIONS AND/OR SETTLE CLAIMS, DISPUTES OR LITIGATION WITH THE PUBLIC

a) Prior to closing, all commissions paid or due are subject to negotiating to settle claims, disputes, or litigation.

b) After closing the Company has sole discretion as to actions taken regarding claims, disputes or litigation.

c) The sales associate agrees to immediately inform his/her broker of all pending or possible disputes, mediation, grievances, or litigation with the public and/or other brokers.

d) The Company Attorney will be used and cost shall be split between the Company and the sales associate at the associate's commission percentage prevailing at time of sale.

8.11 INTER-COMPANY DISPUTES

a) If two or more sales associates of the Company have a dispute, it is recommended that the sales associates discuss the problem with each other.

b) If necessary, all parties to the problem should meet with the Broker and/or Director of Business Development and discuss the possible solutions to the problem in an attempt to resolve the situation. Discussion among other staff or agents “seeking their advice� is inappropriate and will not be tolerated.

c) If necessary, management will resolve the dispute with a final decision given to all parties.

d) It is recommended that the public should not be involved in the event of disputes between sales associates. Register any disputes with the Broker and/or Director of Business Development. If an agreeable solution cannot be reached, the associate may request arbitration/ mediation. If the sales associate takes a separate action outside the policies, that sales associate will be responsible for any expense incurred.

8.12 OUTSIDE BROKER DISPUTES

a) In the event of disputes with other companies, the Broker is to be notified immediately. In the case of a dispute that cannot be


negotiated satisfactorily between the companies involved, the case will be submitted to the Arbitration Committee of the BOARD of REALTORS®. All disputes must have management approval prior to submission to the Board. Discussion among other staff or agents “seeking their advice” is inappropriate and will not be tolerated.

b) With the advent of mediation services, the Company would reserve the option of mediation instead of the Arbitration Committee of the BOARD of REALTORS®.

9.0

PURCHASE AND SALE OF PROPERTY FOR PERSONAL ACCOUNT

9.1

GENERAL INFORMATION

a) For the purpose of commission divisions on all in-house transactions, 50% of the commission shall be considered generated by the listing function and 50% by the sale function.

b) Commissions received when the company negates all or a portion of the commission shall not be included in calculating commission brackets.

c) All commissions shall be figured and collected on the adjusted payout, with the Company portion being added to any associate portion and shown as commission income. The Company shall then disburse to the associate that portion of the commission that it has agreed to pay and retain the adjusted amount.

d) If you enlisted the assistance of another associate with your purchase or sale, that associate will have a claim on a portion of the commission, unless the assisting associate, in writing, waives their claim. In the absence of a written agreement, a 30% referral fee will be paid to the assisting agent upon closing of the transaction.

e) Insert the following clause in your purchase agreements: (Insert name) is a licensed associate of Nextage Lone Star Realty purchasing (or selling) for his own account. The purchase price may or may not reflect market value.

9.2

SALE OF PERSONALLY OWNED REAL ESTATE

a) Any associate wishing to sell properties they own will list those properties with Nextage Lone Star Realty.


b) Associates purchasing any type of listed property will share with the company at their commission percentage any commissions earned on the purchase.

c) After one year with the company, associates wishing to sell listed properties they own or purchase property for personal use will be allowed one personal transaction annually without owing a commission to the company.

10.0 ADVERTISING 10.1 Marketing|Branding a) Nextage Realty International and Nextage Lone Star Realty encourage agents to brand themselves using a variety of marketing vehicles. It is the agent’s responsibility to market their business and brand their name. 10.2 SIGNS

a) All signs need to reflect the Nextage Lone Star Realty brand and should be approved by the Director of Business Development or Office Manager prior to ordering. Nextage Realty International follows a certain protocol and has approved vendors for the resource of ordering signs.

b) Sale Pending riders advertises your success. Please use them after all contingencies (including financing) are removed. It is also advisable to leave your name rider up while the sale is pending.

c) Personal name sign riders are important for directing calls. They may be put only on your own listings. The sign remains your responsibility and cost.

d) No associate may remove another associate's name rider from a property.

All listings under the Nextage Lone Star Realty brokerage name are required to have correct and approved signage in place within 24 hours of signing the listing agreement, unless prohibited by neighborhood or otherwise instructed by the seller.

10.3 SPECIALTY ADVERTISING

a) After receipt of management approval, all specialty advertising is at the associate's expense.


b) When individual names are used for approved classified ads, it is the agent's cost to run the ad. All. classified ads will include Company affiliation

10.4 NEW AGENT COMPANY PHOTO The Company requests that you schedule a photo session for recognition ads. The office manager will advise you of your options. 10.5 BULK MAIL AND NEWSLETTERS / POSTCARDS*

a) Bulk mailings are the sole responsibility of the agent, including production and mailing expenses.

11.0 REFERRALS 11.1 INTRODUCTION The Director of Business Development has the responsibility of making sure that every referral receives the best possible service our company can provide. It is extremely important that an assigned referral receives immediate and top priority. The sales associate assigned a referral must be ready, willing and able to devote the necessary effort for a closed transaction.

a) Director of Business Development RESPONSIBILITY: Assign referrals to associates who meet the Nextage Lone Star Realty criteria. Sales associates are to notify the DBD of ALL referrals received from ALL real estate broker firms (?).

b) AGENT QUALIFICATIONS: All agents must meet our minimum qualifications per section 11.4 of this Manual.0

c) ASSIGNMENT OF REFERRALS: Since referrals are our office farm, the Director of Business Development will use its discretion in placing the referral. Any time service is not being met according to the agreed commitment to office standards, the DBD or Office Compliance manager reserve the right to remove the assigned agent and place the referral with another agent.

d) When a call comes into the office from another Broker with a referral, the associate taking the call will forward that call to the Director of Business Development. If the DBD is unavailable, a message is to be taken and immediately turned in to the Office Compliance manager. If the call came to the associate as a personal referral, it will stay with the agent unless it is determined that the situation is not in the client’s best interest.


e) The attached criteria for sales associates to be eligible for incoming referrals will be the means of consideration for assignment. These criteria have been developed in an effort to strive for experienced, professional, productive, committed, and positive agents to work with relocation clients.

11.4 AGENT STANDARDS FOR PARTICIPATION IN REFERRALS CRITERIA – These are standards that are to be maintained by our relocation agents.

INCOMING REFERRALS: 1. Must be a full-time active associate, with regular attendance at sales meetings. 2. Must maintain professional business image – first impressions are lasting and important.

a. b. c.

Dress in professional business attire. Have a clean car inside and out. Have a positive and cooperative attitude.

3. Must be committed to servicing referrals with a positive and cooperative attitude. This may be on very short notice and on weekends, if necessary. 4. Must regularly tour office inventory. 5. Must be willing to give area tours to prospective transferees. 6. Must be willing to give no-obligation market analysis for a seller, if needed Referrals are matched as closely as possible to an agent by personality, service area and expertise in applicable marketplace.

.1 INTRODUCTION 12.0 PERSONAL ASSISTANTS Personal assistants fall under two (2) categories: licensed and unlicensed. The abilities of the assistants are totally dependent upon whether the assistant is licensed or unlicensed. According to the NAR 2001 Membership Profile, 45 % of members have personal assistants


who are independent contractors. Because most real estate professionals work as independent contractors, it’s tempting to put your assistant in the same category. One important thing to consider is that real estate practitioners are classified as “statutory independent contractors” by the IRS if they meet 3 criteria – licensure, compensation based on sales or output, and a written agreement with the person for whom the service is performed. .2

ANAYLZE WHETHER YOUR ASSISTANT IS AN INDEPENDENT CONTRACTOR Do not assume that the personal assistant who holds a real estate license can automatically qualify as independent contractor. The IRS has set up 20 criteria to determine if your assistant can be qualified as an independent contractor. If your assistant can answer yes to any of the following they are probably an employee. a) Are you required to comply with instructions on when, where, and how to perform work? b) Is training provided? c) Are your services integrated into the general business operations? d) Must you render the service personally? e) Does the person for whom you work hire, supervise, and pay other people to assist you with work? f) Are there set work hours? g) Do you have a continuing relationship for the person for whom you work? h) Must you devote substantially full time to work? i) Is the work performed on the employer’s premises? j) Must you perform services in a set sequence? k) Must you submit oral or written reports regularly to the person that you work for? l) Are you paid by the hour, week, or month? m) Are your travel and business expenses paid for? n) Do you supply the tools, materials, and equipment needed to perform the work? o) Can you be discharged at will? p) Can you terminate the relationship without incurring liability? q) Do you invest in facilities used to perform the work, such as an office? r) Can you realize both profit and loss? s) Can you work for more than one company at a time? t) Can you make services available to the general public? Keep in mind that just because you sign an agreement with personal assistants stating that they are independent contractors doesn’t mean that the IRS will agree with you. For more information on rules for determining if a worker of an employee, download the Employer’s Supplemental Tax


Guide. You can also submit your job description to the IRS for a ruling using Form SS-8. If you determine that the assistant is an independent contractor, the assistant must sign an Independent Contractor Agreement.

12.3 SAMPLE ASSISTANT POLICY A sample personal assistant policy can be found in Don’t Risk It! A Broker’s Guide to Risk Management, published by the National Association of Realtors. Also check with your state Real Estate Commission Rules and Regulations to affirm what a licensed vs. unlicensed assistant can or cannot do. 12.4

CONTRACTS REQUIRED All agents who have assistants must have contracts in place between the agent and the personal assistant. Outline the topics to be covered in the contract. Consider which contracts are appropriate. A copy of the contract must be given to the broker. a) Agreement for licensed assistant between the licensee and assistant b) Agreement for unlicensed assistant between the licensee and assistant c) Agreement between broker and affiliated licensee for the use of a licensed assistant d) Agreement between broker and affiliated licensee for use of unlicensed assistant e) Agreement between the broker and the licensed assistant f) Agreement between the broker and the unlicensed assistant Consider the following terms regardless of the type of contract. 1. Capacity of the assistant...i.e. licensed vs. non-licensed 2. Work the assistant is authorized to perform per license law of your state 3. Work the assistant is not authorized to perform per license law of your state 4. Commencement term and termination terms of the agreement 5. Relationship between the licensee and assistant 6. Compensation means 7. Confidentiality clause 8. Can the agreement be assigned 9. The fact that the entire agreement supersedes any and all agreement 10.The fact that the laws of the state govern the actions of the licensee. 11.Disclaimer stating the unless provided in writing the licensee and assistant are not employees of the broker. 12.Reporting requirements as per taxes‌. you is responsible for such reporting?


13.Liability for the acts of the assistant 12.5 TYPICAL DUTIES OF AN UNLICENSED ASSISTANT 1. Deliver documents and pick up keys 2. Answer the telephone and forward calls 3.

Secure public informati on from courthou se, utility compani es, etc.

4. Provide courier services 5. Schedule appointments with other offices, existing clients, or customers 6. Place signs on property 7. Type forms for approval by licensee and supervising broker 8. Write ads for approval of licensee and supervising broker, and place classified advertising 9. Assemble documents for closing 10.Hand out objective, written information on a listing 11.Transmit listings and changes to a multiple listing service 12.Follow up on loan commitments after a contract has been negotiated 13.Assemble documents for closing 14.Have keys made for company listings 15.Record and deposit earnest money and other trust funds 16.Order items of routine repair as directed by licensee and/or supervising broker 12.6 DUTIES THAT 1. 2. 3. 4.

5.

6. 7.

CANNOT BE PERFORMED BY UNLICENSEDASSISTANS Host open houses, kiosks, home show booths or fairs. Show property Answer any questions on listings, title, financing, closing, etc. Discuss or explain a contract, agreement, listing or other real estate document with anyone outside the brokerage company Be paid on the basis of real estate activity, such as a percentage of commission, or any amount based on listings or sales. Negotiate or agree to any commission, commission split or referral fee on behalf of a licensee. Solicit by telephone or in person potential sellers, purchasers, tenants or landlords


8. Give additional information not included in prepared written promotional material that has been distributed to the public 9. Represent themselves as an real estate agent 12.7 OFFICE POLICIES All office policies and rules must apply to personal assistants just as they apply to the licensee. Assistants must attend all office meetings. All assistants shall comply with any office training, ie. Risk management training.

13.1 Definition 13.0 SEXUAL HARASSMENT POLICY STATEMENT Equal Employment Opportunity Commission defines Sexual Harassment as “unwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature” when acquiescence is a condition of getting or keeping a job, a promotion, or a pay increase (quid pro quo harassment) or when it substantially interferes with employees’ ability to do their work (harassment that creates a hostile work environment). .3

POSITION STATEMENT Sexual harassment in any format listed above will not be tolerated by Nextage Lone Star Realty – sexual harassment is illegal. Racial, religious, and ethnic harassment will not be tolerated by Nextage Lone Star Realty. It is also illegal. For this reason, you must make sure that you do not engage in such harassment or in any behavior that could be interrupted as harassment by your co-workers. Because harassment is a serious offense, Nextage Lone Star Realty will deal with these issues in the strictest of terms, which may include termination if you are found to have engaged in such conduct.

.4

PROCEDURES If you believe you have been harassed, notify The Director of Business Development or Office Compliance Manager immediately. Though a written complaint is not required, you must provide details about the dates, times, places, and witnesses to the harassment. All complaints will be investigated promptly. The identity of the employee making the complaint as well as the identity of the individual accused of sexual, ethnic, racial, or religious harassment will be kept confidential. Information regarding the charge of sexual harassment and the investigation of that charge will not be made known to


anyone who is not directly involved either as a party, a witness, or a member of the investigating team. Witnesses will be interviewed to elicit their observation and other relevant information. The alleged harasser will be interviewed as well. If the person concedes to the conduct, no further investigation may be needed. Throughout the investigation of the alleged charge all parties will keep all information completely confidential and not discuss the situation with anyone other than the DBD or Broker. If your complaint of harassment is found to be totally and completely without basis, appropriate measures may be taken against you. This should not discourage you from making a complaint if you believe you have been a victim of sexual, racial, religious or ethnic harassment. If the complaint of harassment is found to be valid the company attorney will be contacted to assist in the actions of the Broker. The following steps are the customary steps the brokerage will follow: If sexual harassment DID occur: a) An appropriate penalty should be imposed that could include disciplining, suspending, or firing the harasser. b) Corrective action should be documented and the complainant informed that action was taken c) If the individuals continue to work together, the complainant should also be instructed to report recurring or continuing harassment, and a supervisory employee should monitor the situation If sexual harassment DID NOT occur: a) If an investigation proves inconclusive or no harassment is found, confidential letters should be issued to both the complainant and the alleged harasser informing them of the results of the investigation. b) The alleged harasser should be told that any retaliation against the complaining employee might be the basis for possible disciplinary action against him or her. c) If a determination is made that the complaint was clearly frivolous the complainant may face disciplinary action.

14.1 Cost: The cost of the arbitration-filing fee will be the agent’s responsibility 14.14.2 Any ARBITRATION ANDcommissions ETHICS HEARINGS non-paid that are in dispute will be held by the Brokerage Company until an agreement has been reached.


i.

Ethics Hearing: If a Nextage Lone Star Realty agent is determined to have practiced unethical actions, this may be ground for suspension or termination.

ii.

In both a defendant and complainant situation, arbitration and ethics hearing costs such as awards, legal fees, etc. will be paid by the agent unless the broker is proven to have some liability in which case the fees will be split between the parties.

Fair Housing 15.0 GOVERNMENT REGULATIONS TO BE FOLLOWED Nextage Lone Star Realty will not tolerate any violations to the Fair Housing Law. Breaking those laws will be cause for immediate termination of the association. a) Agents agree to:  Provide service without regard to race, color, religion, national origin, sex, handicap, familial status, or sexual orientation. Many states and localities have additional protected classes. Make sure you check for those.  Keep informed as to changes of the law  Be inclusive in all advertising  Inform clients of rights with printed materials and conversations  Document efforts to provide professional service  Refuse to tolerate non-compliance  Learn about people who might be considered different by attending classes on working with multi cultural clients, for example  Take a positive approach to fair housing and follow spirit and letter of the law  Be aware of discriminatory lending practices and report them  To abide by the attached Fair Housing Laws found in the appendix Do-Not-Call Compliance Procedures Overview: In response to the Federal Communications Commission Report and Order Adopted on June 26, 2003 addressing the Rules and Regulations Implementing the Telephone Consumer Protection Act of 1991, Nextage Lone Star Realty will implement office procedures designed to demonstrate and ensure a good faith effort to comply with the national do-not-call rules.  Purpose: o By adoption and utilization of these compliance procedures, as well as all other necessary steps, Nextage Lone Star Realty will


benefit from the “safe harbor” provisions of the national donot-call rules, and will therefore not be liable for violations of the rule, which are the result of error. o Required Procedures: All individuals, employees, and affiliates telemarketing on behalf of the company or individual listed above shall comply with the national do-not-call rules and additional office procedures listed below:  All agents, when making a solicitation call, shall comply with the National do-not-call rules beginning October 1, 2003.  The National do-not-call list itself will be available at www.donotcall.gov. Or www.FTC.gov. All agents shall maintain a record listing the do-not-call numbers. Furthermore, all agents shall “scrub” (update) that record at least once every month.  Agents shall check the record before making any solicitation call.  Agents shall not call any telephone number contained on the record, unless they fit within one of the exceptions listed below. This applies to all calls, including those within and outside of Texas.  Agents may call any telephone number not listed on the record, but if the individual called asks to be placed on the “company” do-notcall list, agents shall honor their request, place their number on the record, and refrain from calling them in the future.  Agents shall allow the phone to ring for 15 seconds or four rings before disconnecting any unanswered call.  Agents shall transmit caller ID information for each call and shall not block the caller ID information.  Agents shall obtain express written permission before sending faxed advertisements.  Agents may call individuals whose number is recorded on the list if the agent has an “established business relationship” with them. The “established business relationship” exception allows agents to contact any client with whom they are currently conducting business, and extends for a period of 18 months from the consummation of their last transaction. It also allows agents to contact those who have made an application or “inquiry” with them for a period of 3 months following their inquiry.  The established business relationship exception extends to all affiliated companies, employees or agents of the company if they are offering a service related to the type of service the company originally rendered.  Agents may call individuals whose number is recorded on the list if that agent has received explicit written permission to do so. The written permission shall be signed, and shall include the telephone number to which calls may be placed.  Agents may call individuals with whom they have a “personal relationship,” which means those “personally known” to them such


 

 

as family members, friends, and acquaintances. Note: in the case of a referral, it is not sufficient that the individual referred have a relationship with the referring source; the exception only applies to the marketer individually and his or her personal relationships. If agents call anyone under one of these exceptions, and the recipient of the call asks to be placed on the company do-not-call list, then that agent shall honor their request, place the number on the company do-not-call list, and refrain from calling them in the future. Agents shall read the national do-not-call rules once each year. Agents shall comply with all sections and requirements contained in the national do-not-call rules, including those not listed in these procedures. Agents shall participate in training on these procedures and the national do-not-call rules when offered by the company. Agents shall make a good faith effort to comply with the national do-not-call rules at all times.

RESPA Real Estate brokers and agents must comply with the Real Estate Settlement Procedures Act, (RESPA). Violators of RESPA will not be tolerated at Nextage Lone Star Realty anyone found violating the rules would be terminated. The following actions are allowed:  

Allows a title agent to provide, during an open house, a modest food tray in connection with marketing information Allows a home inspection company to sponsor association events when the representative from the company also attends Allows you to jointly advertise with a mortgage broker if you pay a share of the costs in proportion with your prominence in the ad Allows a lender to pay you fair market value to rent a desk, copy machine and phone line in your office to pre-qualify applicants Allows a hazard insurance company to give you marketing materials such as notepads, pens and desk blotters which promote the hazard insurance company’s name Allows a title agent to pay for your dinner when business is discussed, provided that such dinners are not a regular occurrence.

For additional information about RESPA laws, visit: www.realtor.org/RESPA


16. 1 16.0 CodeASSOCIATION Of Ethics of theAFFILIATION National Association of REALTORS Code of Ethics and Standards of Practice of the NATIONAL ASSOCIATION OF REALTORS ® Effective January 1, 2012 Duties to Clients and Customers Duties to the Public Duties to REALTORS® Where the word REALTORS® is used in this Code and Preamble, it shall be deemed to include REALTOR-ASSOCIATE®s. While the Code of Ethics establishes obligations that may be higher than those mandated by law, in any instance where the Code of Ethics and the law conflict, the obligations of the law must take precedence. Preamble Under all is the land. Upon its wise utilization and widely allocated ownership depend the survival and growth of free institutions and of our civilization. REALTORS® should recognize that the interests of the nation and its citizens require the highest and best use of the land and the widest distribution of land ownership. They require the creation of adequate housing, the building of functioning cities, the development of productive industries and farms, and the preservation of a healthful environment. Such interests impose obligations beyond those of ordinary commerce. They impose grave social responsibility and a patriotic duty to which REALTORS® should dedicate themselves, and for which they should be diligent in preparing themselves. REALTORS®, therefore, are zealous to maintain and improve the standards of their calling and share with their fellow REALTORS® a common responsibility for its integrity and honor. In recognition and appreciation of their obligations to clients, customers, the public, and each other, REALTORS® continuously strive to become and remain informed on issues affecting real estate and, as knowledgeable professionals, they willingly share the fruit of their experience and study with others. They identify and take steps, through enforcement of this Code of Ethics and by assisting appropriate regulatory bodies, to eliminate practices which may damage the public or which might discredit or bring dishonor to the real estate profession. REALTORS® having direct personal knowledge of conduct that may violate the Code of Ethics involving misappropriation of client or customer funds or property, willful discrimination, or fraud resulting in substantial economic harm, bring such matters to the attention of the appropriate Board or Association of REALTORS®. (Amended 1/00)


Realizing that cooperation with other real estate professionals promotes the best interests of those who utilize their services, REALTORS® urge exclusive representation of clients; do not attempt to gain any unfair advantage over their competitors; and they refrain from making unsolicited comments about other practitioners. In instances where their opinion is sought, or where REALTORS® believe that comment is necessary, their opinion is offered in an objective, professional manner, uninfluenced by any personal motivation or potential advantage or gain. The term REALTOR® has come to connote competency, fairness, and high integrity resulting from adherence to a lofty ideal of moral conduct in business relations. No inducement of profit and no instruction from clients ever can justify departure from this ideal. In the interpretation of this obligation, REALTORS® can take no safer guide than that which has been handed down through the centuries, embodied in the Golden Rule, “Whatsoever ye would that others should do to you, do ye even so to them.” Accepting this standard as their own, REALTORS® pledge to observe its spirit in all of their activities whether conducted personally, through associates or others, or via technological means, and to conduct their business in accordance with the tenets set forth below. (Amended 1/07)

Duties to Clients and Customers Article 1 When representing a buyer, seller, landlord, tenant, or other client as an agent, REALTORS® pledge themselves to protect and promote the interests of their client. This obligation to the client is primary, but it does not relieve REALTORS® of their obligation to treat all parties honestly. When serving a buyer, seller, landlord, tenant or other party in a non-agency capacity, REALTORS® remain obligated to treat all parties honestly. (Amended 1/01) Standard of Practice 1-1 •

REALTORS®, when acting as principals in a real estate transaction, remain obligated by the duties imposed by the Code of Ethics. (Amended 1/93)

Standard of Practice 1-2 • The duties imposed by the Code of Ethics encompass all real estate-related activities and transactions whether conducted in person, electronically, or through any other means. •

The duties the Code of Ethics imposes are applicable whether REALTORS®


are acting as agents or in legally recognized non-agency capacities except that any duty imposed exclusively on agents by law or regulation shall not be imposed by this Code of Ethics on REALTORS® acting in non-agency capacities. As used in this Code of Ethics, “client” means the person(s) or entity(ies) with whom a REALTOR® or a REALTOR®’s firm has an agency or legally recognized non-agency relationship; “customer” means a party to a real estate transaction who receives information, services, or benefits but has no contractual relationship with the REALTOR® or the REALTOR®’s firm; “prospect” means a purchaser, seller, tenant, or landlord who is not subject to a representation relationship with the REALTOR® or REALTOR®’s firm; “agent” means a real estate licensee (including brokers and sales associates) acting in an agency relationship as defined by state law or regulation; and “broker” means a real estate licensee (including brokers and sales associates) acting as an agent or in a legally recognized non-agency capacity. (Adopted 1/95, Amended 1/07) Standard of Practice 1-3 • REALTORS®, in attempting to secure a listing, shall not deliberately mislead the owner as to market value. Standard of Practice 1-4 • REALTORS®, when seeking to become a buyer/tenant representative, shall not mislead buyers or tenants as to savings or other benefits that might be realized through use of the REALTOR®’s services. (Amended 1/93) Standard of Practice 1-5 • REALTORS® may represent the seller/landlord and buyer/tenant in the same transaction only after full disclosure to and with informed consent of both parties. (Adopted 1/93) Standard of Practice 1-6 • REALTORS® shall submit offers and counter-offers objectively and as quickly as possible. (Adopted 1/93, Amended 1/95) Standard of Practice 1-7 • When acting as listing brokers, REALTORS® shall continue to submit to the seller/landlord all offers and counter-offers until closing or execution of a lease unless the seller/landlord has waived this obligation in writing. REALTORS® shall not be obligated to continue to market the property after an offer has been accepted by the seller/landlord. REALTORS® shall recommend that sellers/landlords obtain the advice of legal counsel prior to acceptance of a subsequent offer except where the acceptance is contingent on the termination of the pre-existing purchase contract or lease. (Amended 1/93) Standard of Practice 1-8


REALTORS®, acting as agents or brokers of buyers/tenants, shall submit to buyers/tenants all offers and counter-offers until acceptance but have no obligation to continue to show properties to their clients after an offer has been accepted unless otherwise agreed in writing. REALTORS®, acting as agents or brokers of buyers/tenants, shall recommend that buyers/tenants obtain the advice of legal counsel if there is a question as to whether a preexisting contract has been terminated. (Adopted 1/93, Amended 1/99)

Standard of Practice 1-9 • The obligation of REALTORS® to preserve confidential information (as defined by state law) provided by their clients in the course of any agency relationship or non-agency relationship recognized by law continues after termination of agency relationships or any non-agency relationships recognized by law. REALTORS® shall not knowingly, during or following the termination of professional relationships with their clients: a. reveal confidential information of clients; or b. use confidential information of clients to the disadvantage of clients; or c. Use confidential information of clients for the REALTOR®’s advantage or the advantage of third parties unless: i. Clients consent after full disclosure; or ii. REALTORS® are required by court order; or iii. It is the intention of a client to commit a crime and the information is necessary to prevent the crime; or iv. It is necessary to defend a REALTOR® or the REALTOR®’s employees or associates against an accusation of wrongful conduct. •

Information concerning latent material defects is not considered confidential information under this Code of Ethics. (Adopted 1/93, Amended 1/01)

Standard of Practice 1-10 • REALTORS® shall, consistent with the terms and conditions of their real estate licensure and their property management agreement, competently manage the property of clients with due regard for the rights, safety and health of tenants and others lawfully on the premises. (Adopted 1/95, Amended 1/00) Standard of Practice 1-11 • REALTORS® who are employed to maintain or manage a client’s property shall exercise due diligence and make reasonable efforts to protect it against reasonably foreseeable contingencies and losses. (Adopted 1/95) Standard of Practice 1-12 • When entering into listing contracts, REALTORS® must advise sellers/ landlords of: 1. The REALTOR®’s company policies regarding cooperation and the amount(s)


of any compensation that will be offered to subagents, buyer/tenant agents, and/or brokers acting in legally recognized non-agency capacities; 2. The fact that buyer/tenant agents or brokers, even if compensated by listing brokers, or by sellers/landlords may represent the interests of buyers/tenants; and 3. Any potential for listing brokers to act as disclosed dual agents, e.g. buyer/ tenant agents. (Adopted 1/93, Renumbered 1/98, Amended 1/03) Standard of Practice 1-13 • When entering into buyer/tenant agreements, REALTORS® must advise potential clients of: 1. The REALTOR®’s company policies regarding cooperation; 1. The amount of compensation to be paid by the client; 2. The potential for additional or offsetting compensation from other brokers, from the seller or landlord, or from other parties; 4. Any potential for the buyer/tenant representative to act as a disclosed dual agent, e.g. listing broker, subagent, landlord’s agent, etc., and 5. The possibility that sellers or sellers' representatives may not treat the existence, terms, or conditions of offers as confidential unless confidentiality is required by law, regulation, or by any confidentiality agreement between the parties. (Adopted 1/93, Renumbered 1/98, Amended 1/06) Standard of Practice 1-14 • Fees for preparing appraisals or other valuations shall not be contingent upon the amount of the appraisal or valuation. (Adopted 1/02) Standard of Practice 1-15 • REALTORS®, in response to inquiries from buyers or cooperating brokers shall, with the sellers’ approval, disclose the existence of offers on the property. Where disclosure is authorized, REALTORS® shall also disclose, if asked, whether offers were obtained by the listing licensee, another licensee in the listing firm, or by a cooperating broker. (Adopted 1/03, Amended 1/09) Standard of Practice 1-16 • REALTORS® shall not use, or permit or enable others to use, listed or managed property on terms or conditions other than those authorized by the owner or seller. (Adopted 1/12) Article 2 REALTORS® shall avoid exaggeration, misrepresentation, or concealment of pertinent facts relating to the property or the transaction. REALTORS® shall not, however, be obligated to discover latent defects in the property, to advise on matters outside the scope of their real estate license, or to


disclose facts which are confidential under the scope of agency or nonagency relationships as defined by state law. (Amended 1/00) •

Standard of Practice 2-1REALTORS® shall only be obligated to discover and disclose adverse factors reasonably apparent to someone with expertise in those areas required by their real estate licensing authority. Article 2 does not impose upon the REALTOR® the obligation of expertise in other professional or technical disciplines. (Amended 1/96)

Standard of Practice 2-2 • (Renumbered as Standard of Practice 1-12 1/98) Standard of Practice 2-3 • (Renumbered as Standard of Practice 1-13 1/98) Standard of Practice 2-4 • REALTORS® shall not be parties to the naming of a false consideration in any document, unless it be the naming of an obviously nominal consideration. Standard of Practice 2-5 • Factors defined as “non-material” by law or regulation or which are expressly referenced in law or regulation as not being subject to disclosure are considered not “pertinent” for purposes of Article 2. (Adopted 1/93) Article 3 REALTORS® shall cooperate with other brokers except when cooperation is not in the client’s best interest. The obligation to cooperate does not include the obligation to share commissions, fees, or to otherwise compensate another broker. (Amended 1/95) Standard of Practice 3-1 •

REALTORS®, acting as exclusive agents or brokers of sellers/ landlords, establish the terms and conditions of offers to cooperate. Unless expressly indicated in offers to cooperate, cooperating brokers may not assume that the offer of cooperation includes an offer of compensation. Cooperating brokers, if any, shall ascertain terms of compensation, before beginning efforts to accept the offer of cooperation. (Amended 1/99)

Standard of Practice 3-2 • To be effective, any change in compensation offered for cooperative services must be communicated to the other REALTOR® prior to the time that REALTOR® submits an offer to purchase/lease the property. (Amended 1/10) Standard of Practice 3-3 • Standard of Practice 3-2 does not preclude the listing broker and


cooperating broker from entering into an agreement to change cooperative compensation. (Adopted 1/94) Standard of Practice 3-4 • REALTORS®, acting as listing brokers, have an affirmative obligation to disclose the existence of dual or variable rate commission arrangements (i.e., listings where one amount of commission is payable if the listing broker’s firm is the procuring cause of sale/lease and a different amount of commission is payable if the sale/lease results through the efforts of the seller/ landlord or a cooperating broker). The listing broker shall, as soon as practical, disclose the existence of such arrangements to potential cooperating brokers and shall, in response to inquiries from cooperating brokers, disclose the differential that would result in a cooperative transaction or in a sale/lease that results through the efforts of the seller/ landlord. If the cooperating broker is a buyer/tenant representative, the buyer/tenant representative must disclose such information to their client before the client makes an offer to purchase or lease. (Amended 1/02) Standard of Practice 3-5 • It is the obligation of subagents to promptly disclose all pertinent facts to the principal’s agent prior to as well as after a purchase or lease agreement is executed. (Amended 1/93) Standard of Practice 3-6 • REALTORS® shall disclose the existence of accepted offers, including offers with unresolved contingencies, to any broker seeking cooperation. (Adopted 5/86, Amended 1/04) Standard of Practice 3-7 • When seeking information from another REALTOR® concerning property under a management or listing agreement, REALTORS® shall disclose their REALTOR® status and whether their interest is personal or on behalf of a client and, if on behalf of a client, their relationship with the client. (Amended 1/11) Standard of Practice 3-8 • REALTORS® shall not misrepresent the availability of access to show or inspect a listed property. (Amended 11/87) Standard of Practice 3-9 • REALTORS® shall not provide access to listed property on terms other than those established by the owner or the listing broker. (Adopted 1/10) Standard of Practice 3-10 • The duty to cooperate established in Article 3 relates to the obligation to share information on listed property, and to make property available to other brokers for showing to prospective purchasers/tenants when it is in


the best interests of sellers/landlords. (Adopted 1/11) Article 4 REALTORS® shall not acquire an interest in or buy or present offers from themselves, any member of their immediate families, their firms or any member thereof, or any entities in which they have any ownership interest, any real property without making their true position known to the owner or the owner’s agent or broker. In selling property they own, or in which they have any interest, REALTORS® shall reveal their ownership or interest in writing to the purchaser or the purchaser’s representative. (Amended 1/00) • Standard of Practice 4-1For the protection of all parties, the disclosures required by Article 4 shall be in writing and provided by REALTORS® prior to the signing of any contract. (Adopted 2/86) Article 5 REALTORS® shall not undertake to provide professional services concerning a property or its value where they have a present or contemplated interest unless such interest is specifically disclosed to all affected parties. Article 6 REALTORS® shall not accept any commission, rebate, or profit on expenditures made for their client, without the client’s knowledge and consent. When recommending real estate products or services (e.g., homeowner’s insurance, warranty programs, mortgage financing, title insurance, etc.), REALTORS® shall disclose to the client or customer to whom the recommendation is made any financial benefits or fees, other than real estate referral fees, the REALTOR® or REALTOR®’s firm may receive as a direct result of such recommendation. (Amended 1/99) Standard of Practice 6-1 • REALTORS® shall not recommend or suggest to a client or a customer the use of services of another organization or business entity in which they have a direct interest without disclosing such interest at the time of the recommendation or suggestion. (Amended 5/88) Article 7 In a transaction, REALTORS® shall not accept compensation from more than one party, even if permitted by law, without disclosure to all parties and the informed consent of the REALTOR®’s client or clients. (Amended 1/93) Article 8 REALTORS® shall keep in a special account in an appropriate financial institution, separated from their own funds, monies coming into their possession in trust for other persons, such as escrows, trust funds, clients’ monies, and other like items. Article 9 REALTORS®, for the protection of all parties, shall assure whenever possible that


all agreements related to real estate transactions including, but not limited to, listing and representation agreements, purchase contracts, and leases are in writing in clear and understandable language expressing the specific terms, conditions, obligations and commitments of the parties. A copy of each agreement shall be furnished to each party to such agreements upon their signing or initialing. (Amended 1/04) Standard of Practice 9-1 • For the protection of all parties, REALTORS® shall use reasonable care to ensure that documents pertaining to the purchase, sale, or lease of real estate are kept current through the use of written extensions or amendments. (Amended 1/93) Standard of Practice 9-2 • When assisting or enabling a client or customer in establishing a contractual relationship (e.g., listing and representation agreements, purchase agreements, leases, etc.) electronically, REALTORS® shall make reasonable efforts to explain the nature and disclose the specific terms of the contractual relationship being established prior to it being agreed to by a contracting party. (Adopted 1/07)

Duties to the Public Article 10 REALTORS® shall not deny equal professional services to any person for reasons of race, color, religion, sex, handicap, familial status, national origin, or sexual orientation. REALTORS® shall not be parties to any plan or agreement to discriminate against a person or persons on the basis of race, color, religion, sex, handicap, familial status, national origin or sexual orientation. (Amended 1/11)REALTORS®, in their real estate employment practices, shall not discriminate against any person or persons on the basis of race, color, religion, sex, handicap, familial status, national origin, or sexual orientation. (Amended 1/11) Standard of Practice 10-1 • When involved in the sale or lease of a residence, REALTORS® shall not volunteer information regarding the racial, religious or ethnic composition of any neighborhood nor shall they engage in any activity which may result in panic selling, however, REALTORS® may provide other demographic information. (Adopted 1/94, Amended 1/06) Standard of Practice 10-2 • When not involved in the sale or lease of a residence, REALTORS® may provide demographic information related to a property, transaction or professional assignment to a party if such demographic information is (a) deemed by the REALTOR® to be needed to assist with or complete, in a manner consistent with Article 10, a real estate transaction or professional assignment and (b) is obtained or derived from a recognized, reliable,


independent, and impartial source. The source of such information and any additions, deletions, modifications, interpretations, or other changes shall be disclosed in reasonable detail. (Adopted 1/05, Renumbered 1/06) Standard of Practice 10-3 • REALTORS® shall not print, display or circulate any statement or advertisement with respect to selling or renting of a property that indicates any preference, limitations or discrimination based on race, color, religion, sex, handicap, familial status, national origin, or sexual orientation. (Adopted 1/94, Renumbered 1/05 and 1/06, Amended 1/11) Standard of Practice 10-4 • As used in Article 10 “real estate employment practices” relates to employees and independent contractors providing real estate-related services and the administrative and clerical staff directly supporting those individuals. (Adopted 1/00, Renumbered 1/05) Article 11 The services which REALTORS® provide to their clients and customers shall conform to the standards of practice and competence which are reasonably expected in the specific real estate disciplines in which they engage; specifically, residential real estate brokerage, real property management, commercial and industrial real estate brokerage, land brokerage, real estate appraisal, real estate counseling, real estate syndication, real estate auction, and international real estate. REALTORS® shall not undertake to provide specialized professional services concerning a type of property or service that is outside their field of competence unless they engage the assistance of one who is competent on such types of property or service, or unless the facts are fully disclosed to the client. Any persons engaged to provide such assistance shall be so identified to the client and their contribution to the assignment should be set forth. (Amended 1/10) Standard of Practice 11-1 • When REALTORS® prepare opinions of real property value or price, other than in pursuit of a listing or to assist a potential purchaser in formulating a purchase offer, such opinions shall include the following unless the party requesting the opinion requires a specific type of report or different data set: 1.Identification of the subject property 2.Date prepared 3.Defined value or price 4.Limiting conditions, including statements of purpose(s) and intended user(s) 5.Any present or contemplated interest, including the possibility of representing the seller/landlord or buyers/tenants 6.Basis for the opinion, including applicable market data 7.If the opinion is not an appraisal, a statement to that effect (Amended 1/10)


Standard of Practice 11-2 • The obligations of the Code of Ethics in respect of real estate disciplines other than appraisal shall be interpreted and applied in accordance with the standards of competence and practice which clients and the public reasonably require to protect their rights and interests considering the complexity of the transaction, the availability of expert assistance, and, where the REALTOR® is an agent or subagent, the obligations of a fiduciary. (Adopted 1/95) Standard of Practice 11-3 • When REALTORS® provide consultive services to clients which involve advice or counsel for a fee (not a commission), such advice shall be rendered in an objective manner and the fee shall not be contingent on the substance of the advice or counsel given. If brokerage or transaction services are to be provided in addition to consultive services, a separate compensation may be paid with prior agreement between the client and REALTOR®. (Adopted 1/96) Standard of Practice 11-4 • The competency required by Article 11 relates to services contracted for between REALTORS® and their clients or customers; the duties expressly imposed by the Code of Ethics; and the duties imposed by law or regulation. (Adopted 1/02) Article 12 REALTORS® shall be honest and truthful in their real estate communications and shall present a true picture in their advertising, marketing, and other representations. REALTORS® shall ensure that their status as real estate professionals is readily apparent in their advertising, marketing, and other representations, and that the recipients of all real estate communications are, or have been, notified that those communications are from a real estate professional. (Amended 1/08) Standard of Practice 12-1 • REALTORS® may use the term “free” and similar terms in their advertising and in other representations provided that all terms governing availability of the offered product or service are clearly disclosed at the same time. (Amended 1/97) Standard of Practice 12-2 • REALTORS® may represent their services as “free” or without cost even if they expect to receive compensation from a source other than their client provided that the potential for the REALTOR® to obtain a benefit from a third party is clearly disclosed at the same time. (Amended 1/97) Standard of Practice 12-3 • The offering of premiums, prizes, merchandise discounts or other


inducements to list, sell, purchase, or lease is not, in itself, unethical even if receipt of the benefit is contingent on listing, selling, purchasing, or leasing through the REALTOR® making the offer. However, REALTORS® must exercise care and candor in any such advertising or other public or private representations so that any party interested in receiving or otherwise benefiting from the REALTOR®’s offer will have clear, thorough, advance understanding of all the terms and conditions of the offer. The offering of any inducements to do business is subject to the limitations and restrictions of state law and the ethical obligations established by any applicable Standard of Practice. (Amended 1/95) Standard of Practice 12-4 • REALTORS® shall not offer for sale/lease or advertise property without authority. When acting as listing brokers or as subagents, REALTORS® shall not quote a price different from that agreed upon with the seller/landlord. (Amended 1/93) Standard of Practice 12-5 • REALTORS® shall not advertise nor permit any person employed by or affiliated with them to advertise real estate services or listed property in any medium (e.g., electronically, print, radio, television, etc.) without disclosing the name of that REALTOR®'s firm in a reasonable and readily apparent manner. This Standard of Practice acknowledges that disclosing the name of the firm may not be practical in electronic displays of limited information (e.g. "thumbnails", text messages, "tweets", etc.). Such displays are exempt from the disclosure requirement established in the Standard of Practice, but only when linked to a display that includes all required disclosures. (Adopted 11/86, Amended 1/11) Standard of Practice 12-6 • REALTORS®, when advertising unlisted real property for sale/lease in which they have an ownership interest, shall disclose their status as both owners/ landlords and as REALTORS® or real estate licensees. (Amended 1/93) Standard of Practice 12-7 • Only REALTORS® who participated in the transaction as the listing broker or cooperating broker (selling broker) may claim to have “sold” the property. Prior to closing, a cooperating broker may post a “sold” sign only with the consent of the listing broker. (Amended 1/96) Standard of Practice 12-8 • The obligation to present a true picture in representations to the public includes information presented, provided, or displayed on REALTORS®’ websites. REALTORS® shall use reasonable efforts to ensure that information on their websites is current. When it becomes apparent that information on a REALTOR®’s website is no longer current or accurate, REALTORS® shall promptly take corrective action. (Adopted 1/07)


Standard of Practice 12-9 • REALTOR® firm websites shall disclose the firm’s name and state(s) of licensure in a reasonable and readily apparent manner. •

Websites of REALTORS® and non-member licensees affiliated with a REALTOR® firm shall disclose the firm’s name and that REALTOR®’s or nonmember licensee’s state(s) of licensure in a reasonable and readily apparent manner. (Adopted 1/07)

Standard of Practice 12-10 • REALTORS®’ obligation to present a true picture in their advertising and representations to the public includes the URLs and domain names they use, and prohibits REALTORS® from:

1. 2.

1. Engaging in deceptive or unauthorized framing of real estate brokerage websites; 2. Manipulating (e.g., presenting content developed by others) listing content in any way that produces a deceptive or misleading result; or 3. Deceptively using met tags, keywords or other devices/methods to direct, drive, or divert Internet traffic, or to otherwise mislead consumers. (Adopted 1/07)

Standard of Practice 12-11 • REALTORS® intending to share or sell consumer information gathered via the Internet shall disclose that possibility in a reasonable and readily apparent manner. (Adopted 1/07) Standard of Practice 12-12 REALTORS® shall not: 1.Use URLs or domain names that present less than a true picture, or 2.Register URLs or domain names, which, if used, would present less than a true picture. (Adopted 1/08) Standard of Practice 12-13 • The obligation to present a true picture in advertising, marketing, and representations allows REALTORS® to use and display only professional designations, certifications, and other credentials to which they are legitimately entitled. (Adopted 1/08) Article 13 REALTORS® shall not engage in activities that constitute the unauthorized practice of law and shall recommend that legal counsel be obtained when the interest of any party to the transaction requires it. Article 14


If charged with unethical practice or asked to present evidence or to cooperate in any other way, in any professional standards proceeding or investigation, REALTORS® shall place all pertinent facts before the proper tribunals of the Member Board or affiliated institute, society, or council in which membership is held and shall take no action to disrupt or obstruct such processes. (Amended 1/99) Standard of Practice 14-1 • REALTORS® shall not be subject to disciplinary proceedings in more than one Board of REALTORS® or affiliated institute, society or council in which they hold membership with respect to alleged violations of the Code of Ethics relating to the same transaction or event. (Amended 1/95) Standard of Practice 14-2 • REALTORS® shall not make any unauthorized disclosure or dissemination of the allegations, findings, or decision developed in connection with an ethics hearing or appeal or in connection with an arbitration hearing or procedural review. (Amended 1/92) Standard of Practice 14-3 • REALTORS® shall not obstruct the Board’s investigative or professional standards proceedings by instituting or threatening to institute actions for libel, slander or defamation against any party to a professional standards proceeding or their witnesses based on the filing of an arbitration request, an ethics complaint, or testimony given before any tribunal. (Adopted 11/87, Amended 1/99) Standard of Practice 14-4 • REALTORS® shall not intentionally impede the Board’s investigative or disciplinary proceedings by filing multiple ethics complaints based on the same event or transaction. (Adopted 11/88) Duties to REALTORS® Article 15 REALTORS® shall not knowingly or recklessly make false or misleading statements about other real estate professionals, their businesses, or their business practices. (Amended 1/12) •

Standard of Practice 15-1 REALTORS® shall not knowingly or recklessly file false or unfounded ethics complaints. (Adopted 1/00)

Standard of Practice 15-2 • The obligation to refrain from making false or misleading statements about other real estate professionals, their businesses and their business practices includes the duty to not knowingly or recklessly publish, repeat, retransmit, or republish false or misleading statements made by others. This duty applies whether false or misleading statements are repeated in person, in


writing, by technological means (e.g., the Internet), or by any other means. (Amended 1/12) Standard of Practice 15-3 • The obligation to refrain from making false or misleading statements about other real estate professionals, their businesses, and their business practices includes the duty to publish a clarification about or to remove statements made by others on electronic media the REALTOR® controls once the REALTOR® knows the statement is false or misleading. (Amended 1/12)

Article 16 REALTORS® shall not engage in any practice or take any action inconsistent with exclusive representation or exclusive brokerage relationship agreements that other REALTORS® have with clients. (Amended 1/04)

Standard of Practice 16-1 • Article 16 is not intended to prohibit aggressive or innovative business practices which are otherwise ethical and does not prohibit disagreements with other REALTORS® involving commission, fees, compensation or other forms of payment or expenses. (Adopted 1/93, Amended 1/95) Standard of Practice 16-2 • Article 16 does not preclude REALTORS® from making general announcements to prospects describing their services and the terms of their availability even though some recipients may have entered into agency agreements or other exclusive relationships with another REALTOR®. A general telephone canvass, general mailing or distribution addressed to all prospects in a given geographical area or in a given profession, business, club, or organization, or other classification or group is deemed “general” for purposes of this standard. (Amended 1/04) • Article 16 is intended to recognize as unethical two basic types of solicitations: •

First, telephone or personal solicitations of property owners who have been identified by a real estate sign, multiple listing compilation, or other information service as having exclusively listed their property with another REALTOR®, and

Second, mail or other forms of written solicitations of prospects whose properties are exclusively listed with another REALTOR® when such solicitations are not part of a general mailing but are directed specifically to property owners identified through compilations of current listings, “for sale” or “for rent” signs, or other sources of information required by Article 3 and Multiple Listing Service rules to be made available to other REALTORS® under offers of subagency or cooperation. (Amended 1/04)

Standard of Practice 16-3


Article 16 does not preclude REALTORS® from contacting the client of another broker for the purpose of offering to provide, or entering into a contract to provide, a different type of real estate service unrelated to the type of service currently being provided (e.g., property management as opposed to brokerage) or from offering the same type of service for property not subject to other brokers’ exclusive agreements. However, information received through a Multiple Listing Service or any other offer of cooperation may not be used to target clients of other REALTORS® to whom such offers to provide services may be made. (Amended 1/04)

Standard of Practice 16-4 • REALTORS® shall not solicit a listing which is currently listed exclusively with another broker. However, if the listing broker, when asked by the REALTOR®, refuses to disclose the expiration date and nature of such listing; i.e., an exclusive right to sell, an exclusive agency, open listing, or other form of contractual agreement between the listing broker and the client, the REALTOR® may contact the owner to secure such information and may discuss the terms upon which the REALTOR® might take a future listing or, alternatively, may take a listing to become effective upon expiration of any existing exclusive listing. (Amended 1/94) Standard of Practice 16-5 • REALTORS® shall not solicit buyer/tenant agreements from buyers/ tenants who are subject to exclusive buyer/tenant agreements. However, if asked by a REALTOR®, the broker refuses to disclose the expiration date of the exclusive buyer/tenant agreement, the REALTOR® may contact the buyer/ tenant to secure such information and may discuss the terms upon which the REALTOR® might enter into a future buyer/tenant agreement or, alternatively, may enter into a buyer/tenant agreement to become effective upon the expiration of any existing exclusive buyer/tenant agreement. (Adopted 1/94, Amended 1/98) Standard of Practice 16-6 • When REALTORS® are contacted by the client of another REALTOR® regarding the creation of an exclusive relationship to provide the same type of service, and REALTORS® have not directly or indirectly initiated such discussions, they may discuss the terms upon which they might enter into a future agreement or, alternatively, may enter into an agreement which becomes effective upon expiration of any existing exclusive agreement. (Amended 1/98) Standard of Practice 16-7 • The fact that a prospect has retained a REALTOR® as an exclusive representative or exclusive broker in one or more past transactions does not preclude other REALTORS® from seeking such prospect’s future business. (Amended 1/04)


Standard of Practice 16-8 • The fact that an exclusive agreement has been entered into with a REALTOR® shall not preclude or inhibit any other REALTOR® from entering into a similar agreement after the expiration of the prior agreement. (Amended 1/98) Standard of Practice 16-9 • REALTORS®, prior to entering into a representation agreement, have an affirmative obligation to make reasonable efforts to determine whether the prospect is subject to a current, valid exclusive agreement to provide the same type of real estate service. (Amended 1/04) Standard of Practice 16-10 • REALTORS®, acting as buyer or tenant representatives or brokers, shall disclose that relationship to the seller/landlord’s representative or broker at first contact and shall provide written confirmation of that disclosure to the seller/landlord’s representative or broker not later than execution of a purchase agreement or lease. (Amended 1/04) Standard of Practice 16-11 • On unlisted property, REALTORS® acting as buyer/tenant representatives or brokers shall disclose that relationship to the seller/landlord at first contact for that buyer/tenant and shall provide written confirmation of such disclosure to the seller/landlord not later than execution of any purchase or lease agreement. (Amended 1/04) •

REALTORS® shall make any request for anticipated compensation from the seller/ landlord at first contact. (Amended 1/98)

Standard of Practice 16-12 • REALTORS®, acting as representatives or brokers of sellers/landlords or as subagents of listing brokers, shall disclose that relationship to buyers/ tenants as soon as practicable and shall provide written confirmation of such disclosure to buyers/tenants not later than execution of any purchase or lease agreement. (Amended 1/04) Standard of Practice 16-13 • All dealings concerning property exclusively listed, or with buyer/tenants who are subject to an exclusive agreement shall be carried on with the client’s representative or broker, and not with the client, except with the consent of the client’s representative or broker or except where such dealings are initiated by the client. •

Before providing substantive services (such as writing a purchase offer or presenting a CMA) to prospects, REALTORS® shall ask prospects whether they are a party to any exclusive representation agreement. REALTORS® shall not knowingly provide substantive services concerning a prospective


transaction to prospects who are parties to exclusive representation agreements, except with the consent of the prospects’ exclusive representatives or at the direction of prospects. (Adopted 1/93, Amended 1/04) Standard of Practice 16-14 • REALTORS® are free to enter into contractual relationships or to negotiate with sellers/ landlords, buyers/tenants or others who are not subject to an exclusive agreement but shall not knowingly obligate them to pay more than one commission except with their informed consent. (Amended 1/98) Standard of Practice 16-15 • In cooperative transactions REALTORS® shall compensate cooperating REALTORS® (principal brokers) and shall not compensate nor offer to compensate, directly or indirectly, any of the sales licensees employed by or affiliated with other REALTORS® without the prior express knowledge and consent of the cooperating broker. Standard of Practice 16-16 • REALTORS®, acting as subagents or buyer/tenant representatives or brokers, shall not use the terms of an offer to purchase/lease to attempt to modify the listing broker’s offer of compensation to subagents or buyer/ tenant representatives or brokers nor make the submission of an executed offer to purchase/lease contingent on the listing broker’s agreement to modify the offer of compensation. (Amended 1/04) Standard of Practice 16-17 • REALTORS®, acting as subagents or as buyer/tenant representatives or brokers, shall not attempt to extend a listing broker’s offer of cooperation and/or compensation to other brokers without the consent of the listing broker. (Amended 1/04) Standard of Practice 16-18 • REALTORS® shall not use information obtained from listing brokers through offers to cooperate made through multiple listing services or through other offers of cooperation to refer listing brokers’ clients to other brokers or to create buyer/tenant relationships with listing brokers’ clients, unless such use is authorized by listing brokers. (Amended 1/02) Standard of Practice 16-19 • Signs giving notice of property for sale, rent, lease, or exchange shall not be placed on property without consent of the seller/landlord. (Amended 1/93) Standard of Practice 16-20 • REALTORS®, prior to or after their relationship with their current firm is terminated, shall not induce clients of their current firm to cancel exclusive contractual agreements between the client and that firm. This does not


preclude REALTORS® (principals) from establishing agreements with their associated licensees governing assignability of exclusive agreements. (Adopted 1/98, Amended 1/10) Article 17 In the event of contractual disputes or specific non-contractual disputes as defined in Standard of Practice 17-4 between REALTORS® (principals) associated with different firms, arising out of their relationship as REALTORS®, the REALTORS® shall mediate the dispute if the Board requires its members to mediate. If the dispute is not resolved through mediation, or if mediation is not required, REALTORS® shall submit the dispute to arbitration in accordance with the policies of their Board rather than litigate the matter. In the event clients of REALTORS® wish to mediate or arbitrate contractual disputes arising out of real estate transactions, REALTORS® shall mediate or arbitrate those disputes in accordance with the policies of the Board, provided the clients agree to be bound by any resulting agreement or award. The obligation to participate in mediation or arbitration contemplated by this Article includes the obligation of REALTORS® (principals) to cause their firms to mediate or arbitrate and be bound by any resulting agreement or award. (Amended 1/12) Standard of Practice 17-1 • The filing of litigation and refusal to withdraw from it by REALTORS® in an arbitrable matter constitutes a refusal to arbitrate. (Adopted 2/86) Standard of Practice 17-2 • Article 17 does not require REALTORS® to mediate in those circumstances when all parties to the dispute advise the Board in writing that they choose not to mediate through the Board's facilities. The fact that all parties decline to participate in mediation does not relieve REALTORS® of the duty to arbitrate. •

Article 17 does not require REALTORS® to arbitrate in those circumstances when all parties to the dispute advise the Board in writing that they choose not to arbitrate before the Board. (Amended 1/12)

Standard of Practice 17-3 • REALTORS®, when acting solely as principals in a real estate transaction, are not obligated to arbitrate disputes with other REALTORS® absent a specific written agreement to the contrary. (Adopted 1/96) Standard of Practice 17-4 • Specific non-contractual disputes that are subject to arbitration pursuant to Article 17 are: 1.

Where a listing broker has compensated a cooperating broker and another cooperating broker subsequently claims to be the procuring cause of the sale or


lease. In such cases the complainant may name the first cooperating broker as respondent and arbitration may proceed without the listing broker being named as a respondent. When arbitration occurs between two (or more) cooperating brokers and where the listing broker is not a party, the amount in dispute and the amount of any potential resulting award is limited to the amount paid to the respondent by the listing broker and any amount credited or paid to a party to the transaction at the direction of the respondent. Alternatively, if the complaint is brought against the listing broker, the listing broker may name the first cooperating broker as a third-party respondent. In either instance the decision of the hearing panel as to procuring cause shall be conclusive with respect to all current or subsequent claims of the parties for compensation arising out of the underlying cooperative transaction. (Adopted 1/97, Amended 1/07) 2.

Where a buyer or tenant representative is compensated by the seller or landlord, and not by the listing broker, and the listing broker, as a result, reduces the commission owed by the seller or landlord and, subsequent to such actions, another cooperating broker claims to be the procuring cause of sale or lease. In such cases the complainant may name the first cooperating broker as respondent and arbitration may proceed without the listing broker being named as a respondent. When arbitration occurs between two (or more) cooperating brokers and where the listing broker is not a party, the amount in dispute and the amount of any potential resulting award is limited to the amount paid to the respondent by the seller or landlord and any amount credited or paid to a party to the transaction at the direction of the respondent. Alternatively, if the complaint is brought against the listing broker, the listing broker may name the first cooperating broker as a third-party respondent. In either instance the decision of the hearing panel as to procuring cause shall be conclusive with respect to all current or subsequent claims of the parties for compensation arising out of the underlying cooperative transaction. (Adopted 1/97, Amended 1/07)

3.Where a buyer or tenant representative is compensated by the buyer or tenant and, as a result, the listing broker reduces the commission owed by the seller or landlord and, subsequent to such actions, another cooperating broker claims to be the procuring cause of sale or lease. In such cases the complainant may name the first cooperating broker as respondent and arbitration may proceed without the listing broker being named as a respondent. Alternatively, if the complaint is brought against the listing broker, the listing broker may name the first cooperating broker as a third-party respondent. In either instance the decision of the hearing panel as to procuring cause shall be conclusive with respect to all current or subsequent claims of the parties for compensation arising out of the underlying cooperative transaction. (Adopted 1/97) 4.Where two or more listing brokers claim entitlement to compensation pursuant to open listings with a seller or landlord who agrees to participate in arbitration (or who requests arbitration) and who agrees to be bound by the decision. In


cases where one of the listing brokers has been compensated by the seller or landlord, the other listing broker, as complainant, may name the first listing broker as respondent and arbitration may proceed between the brokers. (Adopted 1/97) 5.Where a buyer or tenant representative is compensated by the seller or landlord, and not by the listing broker, and the listing broker, as a result, reduces the commission owed by the seller or landlord and, subsequent to such actions, claims to be the procuring cause of sale or lease. In such cases arbitration shall be between the listing broker and the buyer or tenant representative and the amount in dispute is limited to the amount of the reduction of commission to which the listing broker agreed. (Adopted 1/05) Standard of Practice 17-5 • The obligation to arbitrate established in Article 17 includes disputes between REALTORS® (principals) in different states in instances where, absent an established inter–association arbitration agreement, the REALTOR® (principal) requesting arbitration agrees to submit to the jurisdiction of, travel to, participate in, and be bound by any resulting award rendered in arbitration conducted by the respondent(s) REALTOR®’s association, in instances where the respondent(s) REALTOR®’s association determines that an arbitral issue exists. (Adopted 1/07) The Code of Ethics was adopted in 1913. Amended at the Annual Convention in 1924, 1928, 1950, 1951, 1952, 1955, 1956, 1961, 1962, 1974, 1982, 1986, 1987, 1989, 1990, 1991, 1992, 1993, 1994, 1995, 1996, 1997, 1998, 1999, 2000, 2001, 2002, 2003, 2004, 2005, 2006, 2007, 2008, 2009, 2010, and 2011. Explanatory Notes The reader should be aware of the following policies which have been approved by the Board of Directors of the National Association: In filing a charge of an alleged violation of the Code of Ethics by a REALTOR®, the charge must read as an alleged violation of one or more Articles of the Code. Standards of Practice may be cited in support of the charge. The Standards of Practice serve to clarify the ethical obligations imposed by the various Articles and supplement, and do not substitute for, the Case Interpretations in Interpretations of the Code of Ethics. Modifications to existing Standards of Practice and additional new Standards of Practice are approved from time to time. Readers are cautioned to ensure that the most recent publications are utilized. Copyright 2012, National Association of REALTORS®, All rights reserved. Form No. 166-288 (1/12)

16.2 MLS Rules and Regulations The rules and regulations shall be strictly adhered to and followed. The sales associate is responsible for learning and applying those rules


throughout every transaction. whenever required.

The appropriate forms shall be used

Attendance at the MLS meetings is encouraged. 0

The local association of REALTORS also has by-laws that must be adhered to. As with the MLS rules and regulations, the adherence to those by-laws is mandatory. Those sales associates not following the MLS rules and regulations or the by-laws of the association are subject to termination. 0

16.3 By-Laws

Nextage Lone Star Realty will abide and follow all the by-laws governed by the Austin Board of REALTORS, those by-laws may be found online at: http://www.abor.com/pdf/bylaws.pdf Nextage Lone Star Realty will abide and follow all the by-laws governed by the Williamson County Board of REALTORS those by-laws may be found online at: http://www.wcaor.org/membership/association_bylaws/ bylaws_of_the_williamson_county_association_of_realtors_inc


0

Office |Technology Fee Credit Authorization Form

Nextage Lone Star Realty 0has a monthly office technology fee of $49.00. The fee is due on the 20th of the month. The following authorization form gives Nextage Lone Star Realty permission to debit your credit/debit card on the 20th of the month:

Name on credit card:__________________________________________ Billing address:______________________________________________ ________________________________, Texas ______________________ Credit card Type:

Visa

Mastercard

American Express

Credit card number: _________________________________________ Expiration Date: ____________________ cvc code: _____________ I grant permission for Nextage Lone Star Realty to debit my credit/debit card on the 20th of the month for all office| technology fees. _____________________


Agents may select one of the following options for payment of the office | technology fee: _______________ I have elected to place my credit/debit card on file and understand that it will be charged on the 20th of the month for any and all office |technology fees owed to Nextage Lone Star Realty. I understand that if for any reason my card is declined Nextage Lone Star Realty may assess a late fee for the transactions. ______________ I have elected to not place a credit card on file and will have a $75.00 cash deposit placed on my office account. I elect to bring cash or check in the total amount of office| technology fees due to the Nextage Lone Star Realty office prior to 5:00 pm on the 20th of each month. Nextage Lone Star Realty reserves the right to assesses a late payment penalty fee of $25.00 to any agent that is not current on the 20th of the month. Nextage Lone Star Realty will not carry over any balance greater than $50.00 in any given time period. _____________ I elect to pay my office fee in one yearly sum of $588.00. 0 0

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ ___________________________ Signature Date: _____________________________________! Director of Business Development !!

! !

_________________ Date:

CAP Commission: Individual Individual agent: Individual is described as a single agent conducting business under his/her own name with no team affiliation. Team affiliations for the purpose of this document do not refer to the Nextage model of down line or revenue sharing. Commission splits are designated on the following production standards: 100,000 GCI and under in a calendar|fiscal year 100,000- 180,000 GCI in a calendar|fiscal year 180,000 and above in a calendar|fiscal year

70-30 commission split 75-25 commission split 80-20 commission split

Individual agents acting as a sole entity will be afforded a $22,000 cap in their anniversary year. CAP is paid based on the NCI commission after transaction fee and 6.5 % franchise fee is paid to Nextage Lone Star Realty. Once an individual has reached the $22,000 CAP in their anniversary year, the GCI commission spilt is now 100% (less the transaction fee) to the individual agent until the end of the anniversary year. Agents who are on an 80/20 commission split and do not CAP in an anniversary year automatically revert to the 70/30 commission split for the following year.


A g e n Name:_____________________________________________________________________ Previous GCI:______________________________________________________________

t

Year

Commission Split:______________________________ CAP: $22,000 per anniversary year

_____________________________________________________________ ________________________________ Agent Name Date

_____________________________________________________________ Director of Business Development

_____________________________________________________________ Broker of Record

_____________________________________________________________ President|Owner Nextage Lone Star Realty

CAP Commission: Rainmaker with Team Teams for the purpose of this policy are described as one or more persons acting under one entity for the purpose of selling real estate as a branded name. i.e.: The Diana Keyes Real Estate group. It is not indicative of the “team” reference in the Nextage model of “ Revenue Sharing” Teams are lead by one soul individual herein referred to as the RAINMAKER. All teams are required to have a “team agreement” in place that is approved by the Director of Business Development. Teams are the afforded the following CAP in the anniversary year. CAP is paid based on the NCI after transaction fee and 6.5 % franchise fee is paid to Nextage Lone Star Realty. Once the team has CAPPED in their anniversary year the GCI commission spilt is now 100 % to the RAINMAKER until the end of the anniversary year.

Rainmaker: One team member Second team member Third team member

22,000 (80/20 commission split) 33,000 44,000 55,000


Each additional member Transaction coordinator Executive Assistant

add 11,000 no cap- no compete no cap- no compete

1. All team members would have an additional split with the Rainmaker with a team agreement in place. All agreement will be on file with the Office/ Compliance manager of Nextage Lone Star Realty** 2. The Director of Business Development reserves the right to modify/change the CAP in accordance with the infrastructure of the team. Teams who add additional members during an Anniversary year will be held accountable to the entire CAP of the new member, even if the team has currently CAPPed. 3. Teams that restructure during an Anniversary year will be subject to a CAP review from the Director of Business Development. 4. CAP review takes into account the previous years GCI and modifies the team CAP in accordance to the production level of the whole team with in the standard of the Nextage International CAP plan. 5. All Production for the CAP purpose will be placed under the name of the Rainmaker, in order to qualify for awards Nextage Lone Star Realty will report the “production� of each individual member of the team to the International office and record accordingly.

Agent _____________________________________________________________________ Position on _______________________________________________________________ Previous GCI:______________________________________________________________

Name:

team:

Year

Commission Split:______________________________

Team Commission Continued: Team CAP (amount to be _________________________________ ________________________________ _________________, ________

verified

every

anniversary

year)

:


Agent Name

Date

_____________________________________________________________ Director of Business Development

_____________________________________________________________ Broker of Record

_____________________________________________________________ President|Owner Nextage Lone Star Realty 0


CAP Commission: Partnership- TRADITONAL MODEL A partnership is when one or more individuals split production equally amongst themselves. Ex: The Keyes-Covelli Real Estate Group. All partnerships are required to have a “team agreement” in place that is approved by the Director of Business Development. Partners in accordance with the Nextage model of “revenue sharing” are not allowed to “stack “ in a down line. Partnerships are the afforded the following CAP in the anniversary year. CAP is paid based on the NCI commission after transaction fee and 6.5 % franchise fee are paid to Nextage Lone Star Realty. Once the Partners have reached the 33,000 CAP in their anniversary year the GCI commission spilt is now 100 % to the Partners until the end of the anniversary year. ** All Partnerships will have a partnership agreement in place. All agreement will be on file with the Office/Compliance manger of Nextage Lone Star Realty** 0

Partner(s) A: Herein known as Partner A B: Herein known as Partner B

33,000 CAP (80/20 commission split All production funnels through Partner A

0

CAP Commission: Married / Domestic Partners: Married and Domestic Partners are afforded the following CAP. CAP is paid based on the primary commission after transaction fee and 6.5 % franchise fee is paid to Nextage Lone Star Realty. Couples share one $22,000 dollar CAP with all production through one partner. Domestic Partners must prove as defined by law that there is a “legal” document supporting the Domestic partnership; i.e. marriage certificate, insurance papers, civil union documents. 0Agent _____________________________________________________________________

Name:

Commission Split: ______________________________ Partner A _________________________________________ B__________________________________________ Team CAP (amount to be _________________________________

verified

_____________________________________________ _________________, ________ Agent Name

every

Partner

anniversary

year):

Date

Director of Business ____________________________________________________________

Development:


Broker of Record: _______________________________________________________________________________ President|Owner Nextage Lone __________________________________________________

B B r o k e r o f r e c o r d , s n o j e o j f a s ; m f s a a w f

Star

Realty:


Nextage P&P manual