DRRC November 2004

RELOCATION MANAGEMENT PERSPECTIVERELOCATION MANAGEMENT PERSPECTIVE

Debbie Robinson, CRP, GMS

Vice President, Director - RealtySouth Relocation

The Squeeze on Service Fees

DRRC November 2004

Managing Customer Expectations

Role of Relocation Department: The Relocation Department is Responsible for all Relocation

Efforts Within a Company Train Coordinators in Department and the Agents Within the

Company That Will Be Working With Our Transferees Develop and Maintain Relationship with Companies Who

Can Provide Additional Source of Income and Business for Agents

Collect and Provide Area Information for Agents and Newcomers

Track and Analyze Relocation Business for the Company Meet the Expectations of our Clients Be the Source of Knowledge for Our Clients and Customers

DRRC November 2004

Associated Cost Components • MARKETING

Printing Cost

Advertising

Newcomer Information

Promotional Material

• TECHNOLOGY

Online policy

Personal file online

Expense reimbursement

IDX Monitoring • OVERHEAD

Salaries/Benefits

Locations / Lease

Communications / ITTraining Cost

• MEMBERSHIP FEESLocalERC Nat’l / RegionalReal Estate3rd Party Network

• TRANSACTIONALListing Referral Fees

Destination Referral FeesInventory ManagementProperty Management

DRRC November 2004

Agent Requirement and Investment

• 5 – 7 years experience • Full time• Relocation certified• Compete for the listing

– One Step Process– Two Step Process

• Complete ERC form in 24 - 48 hours • Extensive follow-up – weekly reports• Technology savvy• Do open houses, virtual tours, info boxes

Audience Challenge:

What is the average number of man hours

(agent investment) in a 60-90 day

property listing???

DRRC November 2004

The Financial Impact To Serve this Segment

LISTING TRANSACTION (BASED ON $250,000 LISTING TRANSACTION)

Commission (3%) $7,500 $7,500

35% Referral Fee (to 3rd party companies) $2,625 VS. Non-Relo $ 0

$4,875 $7,500

Agent Split (60%) $2,925 $4,500

Company Dollar $1,950 $3,000

To Agent Office (10%) $ 195 $ 300

Company Dollar $1,755 $2,700

Operating Expense - $1,645 -$1,645

Before Taxes $ 110 $1,055

Taxes $ 49 $ 475

PROFIT $ 61 $ 480

Please note that many of our transactions are less than $250,000, so the profit would be even less.

DRRC November 2004

Sources of Income

• SOURCES OF INCOME

Broker to BrokerThird PartyDirect Client Business ReferralsOutgoing ReferralsAffinity ProgramHousehold Goods MovesSettling In ServicesAgent Lead ProgramsREOIDX LeadsMortgage AssistanceAgent TrainingPolicy WritingTitle

DRRC November 2004

SOURCES AVAILABLE ON RELOCATION REFERRALS?

SOURCES OF INCOME BROKER vs. 3rd PARTY

Broker to Broker Yes NoThird Party Yes YesDirect Client Referrals Yes n/aOutgoing Referrals Yes NoAffinity Program Yes No/SometimesHousehold Goods Moves Yes NoSettling In Services Yes No/SometimesAgent Lead Programs Yes ???REO Yes NoIDX Leads Yes NoMortgage Assistance Yes No/SometimesAgent Training Yes NoPolicy Writing Yes NoTitle Yes No/Sometimes

DRRC November 2004

WHERE ARE WE HEADED IN THE FUTURE?

• If the client’s tax benefit were to be taken away by the IRS for the BVO/Amended program – this could result in more lump-sum packages being offered to the transferee vs. the BVO program. The taxes would be the responsibility of the transferee or higher cost to corporation

• Quality of service would be greatly impacted - $0 fees are raising much concern in this area to the bottom dollar..

• Agent/Company Split continue to increase due to referral fee and their cost of sales….agent getting more.

• Could we be headed in the future to higher referral fees based on the cost of doing business? Can we retain and attract top agent talent? At what cost?

• Will we be forced to decline this business segment (3rd party) in the future and seek more profitable business opportunities to survive and thrive!