Fathom Policy And Procedures Manual

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Page Count: 79

VERSION:

July 5, 2018

Fathom Realty Page 2 of 79

Table of Contents

Section 1:

How to Use Your Manual Effectively

1.1 About this manual

Section 2:

The Fathom Realty Story, Mission Statement & Our Brand

2.1 The Fathom Realty Story

2.2 Mission Statement

2.3 The Fathom Culture

2.4 The Fathom Brand

Section 3:

Policies and Guidelines for Brokerage Activity

3.1 Structure

3.1.1 Teams

3.2 Company Agency Policy

3.3 Company Policy on Dual Agency

3.4 Listings – Obtaining and Servicing

3.4.1 Brokerage Commissions

3.4.2 Types of Listings

3.4.3 Listing Agreement-Form and Information

3.4.4 Exceptions of Listing Agreement

3.4.5 Length of Listing Agreement

3.4.6 The Listing Contract with the Owner

3.4.7 Accuracy of Listing Information

3.4.8 Seller Net Proceeds Calculations

3.4.9 Cancellation or Withdrawal of Listing

3.4.10 Office Procedure - New Listings

3.4.11 Property Inspection Tours

3.4.12 Signs

3.4.13 Sales Associate Rights to a Listing

3.4.14 Joint Listings with another Company Associate

3.4.15 Competition with Another Company Associate

3.4.16 Seller Property Disclosure Statements

3.5 Buyer Representation Agreements - Obtaining and Servicing

3.5.1 Buyer Representation Intermediary Notice Forms and Information

3.5.2 Mandatory Buyer Agency Events

3.5.3 Length of Term

3.5.4 Cancellation

3.5.5 Reserve Properties

3.5.6 Submission to Office

3.5.7 Cancellation or Withdrawal

3.5.8 Other Buyer’s Agents

3.5.9 Fees

3.6 Other Brokerage Activities

3.6.1 Broker Price Opinions (Comparative Market Analyses)

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3.6.2 Office Procedures to Safeguard the Confidentiality of Information

3.6.3 Overview of HUD Bidding Procedures

Section 4.0

Showings, Open Houses, and Prospects

4.1 Showing of Listing

4.2 Prospect Protection

4.3 Safety for Agents

Section 5.0

Obtaining and Presenting the Purchase Contract

5.1 Disclosure of Sellers Agency Relationship

5.2 The Purchase Agreement

5.3 Multiple Offers

5.4 Timing of Presentation

5.5 Deposits & Earnest Money

5.6 Real Estate Taxes

5.7 Buyer's Signatures

5.8 Appointment to Present Purchase Agreement

5.9 What Offers are to be Presented

5.10 Presenting the Offer

5.11 Acceptance of Counter-Offer

5.12 Purchase Agreement

5.13 Cancellation of a Purchase Agreement

5.14 Rejected Offer

Section 6.0

Closing Procedures

6.1 Completion of the Sales Information

6.2 Option and Earnest Money Delivery

6.3 Inspections

6.4 Final Closing Documents

6.5 Wire Fraud

6.6 Down Payment

6.7 Commission Payment

6.8 Team Commission Disbursement

6.9 Early Possession Agreement

6.10 Attendance at Closing

6.11 Uploading Final HUD

Section 7.0

Leases

7.1 General overview

7.2 Explanation of Permitted Leasing Functions

7.3 Internal Accounting of Lease Transactions

7.4 Forms

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Section 8.0

Organizational and Administrative Procedures

8.1 Terms of Association

8.2 Conditions of Association

8.3 Conduct of Associates

8.4 Limitation of Authorization to Sales Associates

8.5 Responsibilities of Sales Associates

8.6 Conflicts of Interest

8.7 Fair Housing Declaration

8.8 Automobile Liability Insurance

8.9 Termination

8.10 Errors and Omission Insurance

8.11 Complaint Handling Procedures

8.12 Internet & Social Media Guidelines

8.13 Personal Agent Websites & Email

8.14 Vacation/Absentee Agents

8.15 Affiliated Business Disclosures

8.16 Concealed Weapons

Section 9.0

Commission

9.1 Commission Split

9.1.1 Teams

9.2 Commissions Payable

9.3 Adjustment in Commission

9.4 Rental and Leasing Fees

9.5 Referral Fees

9.6 Bonuses

9.7 Deferred Commission

9.8 Right of Company to Adjust Realtor Fees and/or Settle Claims, Disputes or

Litigation with the Public

9.9 Inter-Company Disputes

9.10 Outside Broker Dispute

9.11 Conducting Business in Multiple Fathom Markets

Section 10.0

Advertising

10.1 Advertising Policy

10.2 Signs

10.3 Fair Housing Advertising Policy

Section 11.0

Personal Assistants

11.1 Introduction

11.2 Independent Contractor or Employee

11.3 Sample Policy

11.4 Contracts Required

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11.5 Duties of Unlicensed Assistant

11.6 Duties Prohibited by Unlicensed Assistant

11.7 Office Policies Pertain to Assistants

Section 12.0

Sexual Harrasment

12.1 Definition

12.2 Position Statement

12.3 Procedures

Section 13.0

Arbitration and Ethics Hearings

13.1 Cost

13.2 Unpaid Commissions

13.3 Ethics Hearings

13.4 Costs of the Hearing Results

13.5 Confidentiality

Section 14.0

Government Regulations To Be Followed

14.1 Fair Housing

14.2 Do-Not-Call Policy

14.3 RESPA

14.4 Lead-Based Paint

14.5 Anti-Trust

Section 15.0

Risk Reduction

15.1 Risk Reduction

Section 16.0

Association Affiliation

16.1 Code of Ethics

16.2 MLS

16.3 Local Board of REALTORS By-Laws

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Section 1:

How to Use Your Manual Effectively

1.1 About this manual

Welcome to Fathom Realty! We would like to invite you to read and become familiar with the

contents of this policy manual and employee handbook. The information presented in this

handbook covers company policies, benefits, and procedures that will guide and assist you in

performing your duties. Our goal in creating this handbook is to equip you to perform to the

best of your ability and help you realize your potential as one of our valued team members.

The policies, procedures, and programs outlined in this handbook are designed to serve as

guidelines for company policies, benefits and activities. They are not intended to create a

contractual relationship and are subject to change at Fathom Realty’s discretion, with or without

notice. While the policies and procedures outlined in this manual should answer most of the

general questions you have about your job or the company’s programs, it cannot cover every

situation that might arise. If you have questions about these guidelines, or need further

information on anything related to your job, please consult with your local leadership team.

Please read this handbook carefully and refer to it frequently. We encourage you to familiarize

yourself with its contents as soon as possible because it is important that you are fully informed

and understand our policies and procedures completely.

Once again, we welcome you to Fathom Realty and we wish you much success in your new

position.

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Section 2:

The Fathom Realty Story, Mission Statement & Our Brand

2.1 The Fathom Realty Story

In 2007, the real estate market was experiencing a massive economic downturn; real estate

agents were seeing fewer sales at lower prices and as a result, many agents were forced out of

the industry while the others realized a smaller income potential. The downturn exposed needs

that the industry has been slow to address. With those needs in mind, Josh Harley launched

Fathom Realty in January 2008 and set the stage to usher in the future of real estate.

Fathom Realty was inspired from the following truths: no matter what they claim, the large

established brokerages do not generate real estate leads for their agents; a client chooses their

real estate agent because of who they are, not who they work for; if an agent reduces their

overhead, they will have more money to invest in their business and family; a beautiful office is

overhead that does not generate income; technology is constantly becoming better, cheaper

and more accessible to agents; 100% of nothing is still nothing, a brokerage must offer more

than just 100% commission to their agents; brokerages can still offer tremendous value to

agents but that value is not worth what it used to be; too many industry leaders have used

agents to improve their position instead of using their position to improve their agents.

Fathom Realty leverages innovation and cutting-edge technology to profitably offer a 100%

commission-based model to our agents along with the highest level of support, training, and

sense of community through servant leadership.

The word Fathom means, “to come to understand”. Fathom Realty’s goal is to ignite a paradigm

shift within the real estate industry and is poised to be the catalyst which ignites the long

overdue shift from a brokerage-centric industry to one that is client and agent-centric.

2.2 Mission Statement

Fathom Realty was built on biblical principals and exists to serve our agents and clients through

unparalleled support, superior innovation, and next generation technology. With servant’s

hearts, we believe in giving 100% to our agents and achieving 100% satisfaction from our clients.

2.3 The Fathom Culture

Fathom’s values can be summed up in 3 letters: HIS

HELP: To improve the communities we live in.

INNOVATE: To meet the evolving needs of our associates and clients.

SERVE: Our people always, expecting nothing in return.

2.4 The Fathom Brand

Licensed agents under Fathom Realty have a limited license to use the Fathom Realty service

mark on his/her marketing materials, yards signs, business cards, letterhead and other business

forms. Our policy is that agents shall obtain the prior approval by Broker and Fathom Realty

regarding such use of the Fathom Realty service mark.

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Brands are personalities, but they aren’t created... they are built. As Fathom Realty grows, it is

essential that the company maintain a consistent brand identity across the United States. Our

goal is to establish a uniform “look and feel” by defining brand standards.

1. Learn to love the logo – it’s the only one we’ve got. Don’t add things to it, take things from it,

or stretch it out of proportion. Several variations of the full corporate logo in both horizontal

and vertical orientations are available for your use and accessible for download on the Fathom

Wiki. The Fathom Realty logo as shown below will appear on all items as they are produced,

such as:

oSigns

oBusiness cards

oProducts

oStationary

oBrochures

oNewsletters

oWebsites

oAdvertisements

oBillboards

oSocial media business pages/sites

oAgent websites

oOnline banners/ads

oAll other marketing created for the purpose of promoting the Fathom Realty agent as a

real estate agent/broker/salesperson OR for the purpose of marketing properties listed

by Fathom Realty.

2. Color Settings

When recreating the red and gray color for the Fathom Realty logo, below are the correct

settings:

RED

CMYK for Print: C=0, M=100, Y=100, K=15

RGB for Web and Print: R=196, G=0, B=0

HTML Color Code for Web: #c40000

GRAY

CMYK for Print: C=0, M=0, Y=0, K=85

RGB for Web and Print: R=38, G=38, B=38

HTML Color Code for Web: #262626

3. The Fathom Realty on Signs

Any successful listing agent will tell you, listings produce more listings and your yard sign plays a

big part in that generating force as well as in establishing your brand. It’s your first impression

for other potential home sellers in the neighborhood. The Fathom Realty policy is that 20% of

the sign must be Fathom Red or Fathom Red Gradient and that the Fathom Logo must be no

smaller than 3" x 11.5" on the horizontal logo and 6" x 8" on the vertical logo. While we strive to

maintain consistency in the brand, the intent is not to be too restrictive. We have developed a

set of sign templates to balance individual branding without compromising the Fathom

corporate brand. You can find those on the Fathom Wiki.

4.  The Fathom Realty logo on billboards, banners, and larger signs.

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The portion of the logo must equate to the proportion that it is on a standard 18" x 24" yard

sign. As stated above, the minimum sizing of the Fathom logo on a yard sign as: 3″ x 11.5″

with the horizontal logo and 6″ x 8″ with the vertical logo. This would mean that the logo on

an 18' x 24' billboard would need to be 3 'x 11.5' for the horizontal logo or 6' x 8' when using the

vertical logo. Equivalent conversions would apply to any large advertising materials/signage

generated by the Fathom Agent.

5. State/City/Area/Neighborhood requirements. Some state real estate commissions have very

specific requirements for what information must be clearly displayed on all real estate

advertising/signs. For example, some states require that the Broker’s contact information be

included on all yard signs. Further, specific towns/cities/neighborhoods have sign stipulations

regarding content, look and feel, and size limitations. While Fathom Realty has designed

templates to be both visually attractive and accommodate a broad variety of known

requirements, it is the Agent’s responsibility to ensure that signs are in compliance with all Firm,

MLS, Commission, State, city/area, and HOA/neighborhood requirements. We have provided all

logos, branding materials on the Fathom Wiki to ensure that your sign company can create

custom signs that will comply with all requirements. Please ensure that you review all

requirements prior to having your real estate signs made.

Section 3:

Policies and Guidelines for Regions & Districts

3.1 Company Structure

Fathom Realty prides itself on offering career paths for agents who are interested in serving in

leadership positions within the company. The company is comprised of numerous regions and

districts across the United State. Each region is led by a Regional Director and District Directors

oversee groups of agents in territories that are comprised of a MLS area or in some markets,

multiple MLS areas.

Fathom Realty Organizational Chart



(forthcoming

…

)

3.1.1 Teams

Fathom Realty encourages agents to form teams. One agent will serve as the Team Leader. The

maximum allowable team size is 6 agents. Requests for larger teams must be reviewed and

approved on a case-by-case basis.

3.2 Company Agency Policy

Issues involving agency relationships are governed by different state laws and each Market

Center must remain in compliance with the laws of its state. Our firm’s policy is for agents to

disclose agency at the time of first substantial contact with a customer. Each Market Center will

have its own written agency guidelines and/or follow those written guidelines which may be

available through its state or local Association/Board of REALTORS®. As state laws governing

agency change, each Market Center shall amend their existing policy to comply with the new

law(s).

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Fathom Realty subscribes to the principles and standards expressed in the National Association

of Realtors (NAR) Code of Ethics regarding the treatment and service provided to our clients,

customers, and the public.

Local leadership will establish agency policies specific to their office, but Fathom Realty agents

will be permitted to operate in the capacity of Seller Agency, Buyer Agency, and Disclosed Dual

(Designated Dual) Agency.

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. In certain states, disclosed agency must be made in writing prior to the submission

of a written offer.

3.3 Company Policy on Dual Agency

Fathom Realty and its agents act as agents or subagents of the seller and, as such, will usually

treat buyers as customers. However, should the buyer fall into any of the categories listed

below, Fathom Realty and its agents shall act as the buyer's agent. Further, should such a buyer

client purchase a company listing, Fathom Realty and its agents shall be dual agents

representing both the seller and buyer. Thus, either seller or buyer may be either a Client or a

Customer as determined by this policy.

Criteria for Determining Buyer Status

Buyer Client is one of the following: Self, Buyer who wants anonymity, Relative, Close Friend,

Business associate/partner, or Buyer who wants representation.

Buyer Customer is any buyer not on list above, an open house attendee, or a telephone contact,

or internet lead.

Summary of Real Estate Agent's Duties to a Client (Principal) Under Real Estate License Law &

Commission Rules. While these duties may vary slightly from state-to-state, the standard of duty

for all Fathom agents include the following:

a) Duty to avoid any willful or negligent misrepresentation or omission of a material

fact to a principal (or any other party to a transaction). This includes a duty to

disclose all material facts about which the real estate agent has knowledge or

should reasonably have acquired knowledge.

b) Duty to avoid making false promises that are of a character likely to influence,

induce or persuade a party to a transaction.

c) Duty to avoid any undisclosed conflict of interest.

d) Duty to properly account for funds held in trust for the principal.

e) Duty to act competently in the performance of services.

f) Duty to avoid improper conduct and to be honest in all dealings with the parties.

g) Duty to promptly deliver all offers and contracts to a party to the transaction.

h) Duty to disclose to the principal any commissions, referral fees, kickbacks and

similar payments from third parties.

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Summary



of Agent Duties to a Customer (non-client) Under Real Estate License Law &

Commission Rules:

a) In any real estate transaction the real estate agent has the duty to apply "honesty and

fairness". Under common law the real estate agent is required to refrain from unfair and

deceptive trade practices and not misrepresent or fail to disclose a material fact as

prohibited by the North Carolina Real Estate License Law.

b) Facts that a Fathom Realty agent must disclose to customers/third parties are defined as

follows -

1. Facts directly related to the property - things which may have an impact to the value

of the property.

2. Facts related to the client's ability to complete the transaction.

3. Anything of special importance to a party.

State laws may vary, but Fathom’s description of agent duties should be used as a minimum

standard for all Fathom Realty agents. Please refer to the Market Center Dual Agency Policy for

specifics on when and what type of Dual Agency is allowed and whether it requires the

Managing Broker's approval. As a company policy, Fathom Realty Agents are not allowed to

represent both sides in any commercial transactions – sales or leases.

In some states, agents may NOT serve in the capacity of Dual Agent (representing both the

buyer and seller) in which the agent has a personal interest in the property (as the seller). In all

instances of potential conflict between Fathom policy and state laws, state law supercede.

3.4 Listings – Obtaining & Servicing

3.4.1 Brokerage Commissions & 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 Board of

REALTORS® or a predetermined fee set by a group of real estate brokers.

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 you, as the independent agent determine the company

should charge on that transaction. If a consumer asks if this is the “normal” fee, inform the

consumer that there is not a “normal” fee. The 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 engaged in such

a conversation excuse yourself immediately and report the incident to the Broker.

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Commissions are set by the independent contract agent on a transaction-by-transaction basis.

Individual agents will determine commissions for all residential and commercial listings,

purchases, and leases.

In the event you need to lower the commission or renegotiate a commission after the sales is in

process, the authority is delegated to the individual agent. You, the Agent, are responsible to

pay all fees in full as set forth in the Schedule A (to the Agent Agreement) even if you elect to

discount the fees collected from a client/customer for a limited service listing or offer otherwise

agreed upon discounts to the client/customer.

3.4.2 Types of Listings

Exclusive Right to Sell

1. This is the full right to represent the owner in any sale of the property and is the

type of listing that the company prefers.

2. There is a standard listing agreement form that is to be signed by the sellers (all

owners of record must sign). Be sure to check with the recorder or title

company to assure yourself that all of the title holders 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 listing term of 90 days, 180

days is preferred.

Non-Exclusive Agency Listing

1. This type of listing is not recommended. (Seller has right to sell property with

no commission paid.) This type of listing cannot be taken without the written

consent of the Broker/Manager.

2. A Broker-to-Broker (One-Time Showing) Agreement is used when an

unrepresented seller (FSBO) or the Buyer client agrees to pay a sales

commission to the agent.

3.4.3 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 exclusive responsibility of the listing associate.

b) Personal property is an important part of a sale. A clearly written list of what is to

convey with the sale helps eliminate disputes.

Example: water softeners, mirrors, gas lights, barbeque grill, propane tanks (rented or owned),

or anything the owner is not leaving that may be thought normally included should

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be listed as reserved items and be indicated as such on all advertisements and MLS

data information sources.

c) Review the listing data for accuracy after it has been uploaded to the MLS. Any

errors should be immediately corrected to ensure accurate information is made

available to prospective buyers and agents.

d) Possession date and terms are to be specified.

e) In cases involving Power(s) of Attorney, obtain a copy to ensure the validity and

expiration dates.

f) When taking a listing make sure you have completed all of the necessary

paperwork required for the file per the real estate commission. Including but not

limited to: Information About Brokerage Services, Listing Agreement, Sellers

Disclosure, and other pertinent Addenda.

g) The Seller’s Property Disclosure Form must be completed by the sellers in their own

hand. 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, foreclosure, 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 form onto the MLS

so that it can be accessed by those agents showing the property.

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 Lead-Based Paint Disclosure form is completed as

instructed with the seller’s signature and initial. Check marks are not acceptable.

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 (or transaction broker) shall be disclosed in writing on the listing agreement

or addendum to the agreement. Non-MLS agent compensation must be fully

disclosed in writing as well.

3.4.4 Exceptions of 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 30 days.

Write the names of the exception buyers on a separate page attached to the listing agreement.

The exception prospect time period must have a specific deadline date.

3.4.5 Length of Listing Agreement

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It is preferred by the Company that listing agreements be for a minimum period of 180 + days,

however, not less than 60 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 mail or email with a receipt kept in the file. The protection period for the prospects is

recommended to be 90 days.

3.4.6 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 a representative of the Company, sign the listing

agreement. Any change of the agreement is to be initialed by the owner, the

agent, and uploaded to the Broker. The owners are given one copy along with a

copy of all paperwork provided to the seller at the time of the listing, such as the

Seller’s Property Disclosure and Lead Based Paint form (if applicable).

c) If the seller is paying a bonus, the specific conditions for earning the bonus must be

made in writing on the listing contract or addendum to the listing agreement.

d) In accordance with state laws, written listing agreements must be signed by all

sellers. In addition, this company desires that listing agreements be enforceable in

every possible situation to ensure that the company and agent will be paid under

the terms of the listing agreement. Because of these factors, agents must secure

listing agreements with the proper signatures before the listing will be promoted or

advertised in any way. Agents should be especially aware in the several situations

below.

SPOUSAL SIGNATURES: A spouse must ALWAYS sign a listing agreement unless certain

conditions exist, as follows:

1. A waiver of marital rights given by the nonsigning spouse exists and a copy is provided

to this company.

2. A quitclaim deed made to the signing spouse has been executed and recorded by the

spouse not signing and a copy is provided to this company,

3. A prenuptial agreement waiving the nonsigning spouse's rights exists, a copy of the

prenuptial agreement has been given to this company and legal counsel for the

company has consulted with a title company to determine the validity of the prenuptial

agreement.

Most often, these questions come up when the property is titled only in the "selling" spouse's

name and the "nonselling" spouse claims that he/she has no interest in the property. Typical

situations are a widowed person who has remarried or a divorced person who has remarried.

The spouse not on the title may or may not have a marital interest according to state law. If they

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do have a marital interest they should sign the listing agreement unless one of the three

exceptions noted above exists.

PROPERTY IN ESTATE: When property is in an estate, ALL heirs AND spouses must sign. If a

Personal Representative (Executor) has been named, it is possible that the Personal

Representative has authority to sell the property. The agent must secure a copy of the part of

the will or court decree that empowers the Personal Representative to sell property. The power

of sale granted the Personal Representative by a will may not be acceptable to a title company

until the time to file a will contest has expired, which is six months after the first publication of

notice of Letters of Administration being issued. Management or legal counsel of this company

will consult with a title company to determine if the power to sell in the will is acceptable.

TRUSTEES: If a property is held by a trust, the trustee will normally be empowered to sell.

However, the agent must secure a copy of the part of the trust which empowers the trustee to

sell because some trusts require the signatures of more than one trustee to sell as in the case of

an individual and corporate trustee (bank). The trustee's spouse does not sign the listing

agreement because the trustee is acting in a representative capacity.

SELLER INCAPACITATED: If a seller is a minor or not mentally competent to sell, a guardian must

be appointed by the Probate Court and the guardian must obtain a court order to sell the

property. Until such time, the property cannot be sold even if a child, sister, niece, nephew, etc.

is also on the title. Also, if a property is jointly owned in this fashion, the spouse of the "second

signer" (child, sister, niece, nephew, etc.) must also sign the listing contract. It is possible that a

properly drawn Durable Power of Attorney may provide a means to sell this type of property.

However, before relying on the Durable Power of Attorney, a title company should be consulted

to determine whether the company will insure the title based on the existing Durable Power of

Attorney. Also, refer to the paragraph on Powers of Attorney, below.

DIVORCES: A person is NOT legally divorced until a court so orders. A person "in the process of

divorce" cannot sign the listing agreement alone. The spouse must also sign, regardless of

whether the spouse is living on the premises or the couple has a "legal separation." Once

divorced, the person may sign alone. However, if the county records continue to show the

property in both names, the agent must secure a copy of that part of the divorce decree which

awards the property to the signing spouse for this company’s files.

POWERSOFATTORNEY: A PowerofAttorney is acceptable for signature on a listing contract.

However, not all powers-of-attorney authorize the sale of real estate. A copy authorizing the

sale of real estate must be secured for the files of this company.

3.4.7 Accuracy of Listing Information

Several "traps" of liability exist in taking a listing. These are covered below. Each agent should

take careful note of these hazard areas and be particularly diligent in handling these issues.

a. ROOM COUNTS: Agents must be careful to accurately represent the number of rooms,

bedrooms and bathrooms in a property. Generally, questions of whether an area constitutes a

room, bedroom or bathroom are resolved by determining whether an appraiser would count

Fathom Realty Page 16 of 79

the area as such. For example, basement rooms that are below grade are not generally

considered rooms, bedrooms or bathrooms for appraisal purposes. Another example is that a

room normally must have a closet to be considered a bedroom. Also, "walk-through" rooms are

not usually considered separate bedrooms. These ambiguous areas can be denoted by a symbol

such as a "+" sign after the room count (e.g. 8+ rooms, 4+ bedrooms) or highlighted in remarks

for the property or other descriptive information.

b. ROOM SIZES: An agent will provide square footage estimates in accordance with local

policy. Square footage quotes, if inaccurate, can be extremely dangerous for the agent and the

company.

c. LOT SIZE: Lot size and acreage should only be determined from an accurate survey, the

owner's real estate tax bill or the county tax records. The agent should NOT attempt to measure

lot size on her/his own.

d. TAXES: Taxes should be determined from county tax records or the owner's tax bill, with the

stipulation that reassessment may increase taxes. The agent should not rely on the statements

of the owner as to tax amounts.

e. MODERNIZATION INFORMATION: Often, good selling features about a property are the

updates or upgrades made by the owner. In order to accurately advertise these items, this

company requires that the owner verify any information given to us before it can be used in any

promotional material on the listing.

Items such as "new" roof, "new" air conditioner, "new" furnace, "new" bathroom, "new"

kitchen, etc. are misnomers because of the difficulty in defining what "new" means.

Substantiation of the information means the owner must supply this company with receipts,

canceled checks or other proof of payment of upgraded or rehabbed items. Once provided,

then this company will accurately advertise and promote these good selling features with

language like "New roof, 1999","New furnace, 2000","Kitchen remodeled, 1991". If it is not

possible to substantiate modernized features, they can be advertised or promoted as "Newer"

or "Recent", as in "Newer furnace" or "Recently remodeled bathroom".

3.4.8 Seller Net Proceeds Calculations

It is the policy of this company to calculate estimated net proceeds for sellers as often as

appropriate. The first estimate should be given on the listing call or as soon as possible after

listing the property. Even though some information may not be available, such as exact loan

balances or prepayment penalties, the agent should use all existing information to prepare as

accurate an estimate as possible and note any missing information.

When information becomes available, estimated net proceeds should be recalculated. This is

particularly appropriate when an offer is presented and when each new offer or counteroffer is

received.

Many reasons exist for using seller net calculations. First, it is an important service to a client.

Secondly, it is important for this company to know whether it is likely that there are sufficient

proceeds to pay off the indebtedness on the property and the real estate commission. Finally,

Fathom Realty Page 17 of 79

the company must know whether the seller of the property can deliver marketable title. If the

indebtedness exceeds the listed price, immediate discussions must occur with the seller and the

lenders to determine whether the property can be sold with clear title given the level of

indebtedness.

Note also that, as a possible material limitation on the client’s ability to perform the transaction,

this condition may be considered an adverse material fact to be disclosed to the customer.

Estimated Seller Net Proceeds Calculation forms are available in Zip Forms and/or on the MLS

platform.

3.4.9 Cancellation or Withdrawal of Listing

a) A cancellation or withdrawal, when approved by the Company management shall

terminate a listing as of a certain date or in the case of a withdrawal, it shall be

withdrawn from the MLS but still be an active listing until cancelled or expired.

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.

1. A cancellation or withdrawal of a listing from MLS, may be performed by the

agent, but the Broker must be informed and the transaction cancelled and filed

with the transaction in the transaction management portal.

2. The agent and owner are to be notified in writing of the agreement to cancel

the listing agreement. Upload the written request to the file. You should furnish

the owner with a list of your prospects in writing prior to the cancellation.

3. The listing agent releases all future rights to the property in that the property

may be re-listed by any associate. The original listing agent can reinstate their

rights by relisting the property.

3.4.10 Office Procedure - New Listings

a) Agents will create a new transaction and upload all documents within 48 hours of

signing an agency agreement with a client. Agents are expected to ensure that

documents, dates, and all information related to the transaction are kept up to date

throughout the course of the transaction.

b) The listing forms are to be properly and totally completed on every exclusive listing

and are to be submitted to the MLS and uploaded to the Broker transaction

management system within 48 hours of execution.

c) Late or missing information fees or penalties charged by MLS are the responsibility

of the listing sales associate.

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d) Cooperating brokerage real estate companies who sell a listing of the Company's

will be paid the fee as stated in the MLS. The fee paid to the co-operating brokerage

companies will vary in accordance with the terms agreed upon and put in writing by

the seller client.

3.4.11 Property Inspection Tours

a) Property tours can be an effective marketing tool for listings. Agents can arrange to

have their listings placed on a property tour; which are typically a function of their

local board.

3.4.12 Signs

a) A clean, bright "For Sale" sign is a most important selling tool. That sign finds

buyers that want the location and like the exterior of the home. Templates are

available in the Fathom Agent Box. Agents are permitted to modify the templates

and color schemes, but at a minimum the company logo must appear on the sign

and can be as small as 5% of the total sign to allow for adequate agent branding.

Further, the Fathom logo as a portion of an individual agent’s branding must be

included and the size must be a minimum of 20% of the individual brand logo. 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 TEXT rider and sale

pending signs.

b) On For Sale and Open House signs it is vitally important that you conform to the

communities’ ordinances and sign policy on each listing. If you violate a sign

ordinance, any fine shall be your responsibility, not the company’s.

c) Verify with local ordinances, but arrows and directional signs typically cannot be

placed on public property. To use them you must put them on private property

with the property owner's permission. Public property includes highways, parks,

playgrounds, and parking areas on residential streets.

d) In the event an individual sign must be designed, painted and erected for special

purpose listings, such as commercial, industrial, vacant land, or to conform to an

HOA, the graphics available in Agent Box will be used and the creation of a new sign

will be at the agent’s expense.

e) Condominium and town house association by-laws may prohibit the use of "For

Sale" signs on the premises. When listing this type of property check the sign

policy. Agents are to abide by their policies regarding the placements and use of

signs.

f) The sign must be removed from the listed property promptly upon closing or

expiration of the listing.

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3.4.13 Sales Associate Rights to a Listing

If a seller wishes to change listing agents, the Broker will assign a new agent to the listing. An

agent cannot cancel or withdraw a listing without Broker approval. It is in the Company’s best

interest to try to change listing agents if the seller is unhappy with the original listing agent. The

original listing agent MAY receive a negotiated referral fee of the listing commission at the

discretion of the Broker.

3.4.14 Joint Listings with another Company Associate

a) It is the responsibility of the associates 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 or a dispute arises, the

Company will consider commissions and prospects on a 50/50 basis and the Broker

will use their discretion to resolve the dispute.

3.4.15 Competition with Another Company Associate

If in attempting to list a property, the owners state their intention to list with a fellow associate,

we strongly recommend that you agree with the owners, support that they have made a good

choice and leave. Keep in mind the Code of Ethics Article 15.

3.5 Buyer Representation Agreements - Obtaining and Servicing

3.5.1 Buyer Representation Intermediary Notice Forms and Information

Types of Buyer Representation Agreements

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.

2. Non-Exclusive: The buyer has the right to purchase a property through the agent

of their choice or directly from an owner. The only time a fee would be due the

Brokerage Company is when the buyer purchases a property that has been

contracted through the Brokerage Company (commonly known as procuring

cause).

Intermediary Notice/Designated-Dual Agency

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1. Only state Bar Association approved agreements may be used to represent the

buyer. Agents are not permitted to make changes to the state bar

association-approved forms; an attorney must make any changes.

2. The Buyer Agent must 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 party who will be making application for the loan and qualifies to

purchase the property must sign the agreement.

3. When presenting a Buyer Representation Agreement ensure that all necessary

paperwork has been completed and filed as required by the local and state

governing entities.

3.5.2 Mandatory & Strongly Recommended Buyer Agency Events

MANDATORY BUYER AGENCY EVENTS

It is the policy of this company that any agent working in the following circumstances MUST act

as a buyer's agent and may not act as a subagent of the seller.

1. The agent is buying property for her or himself. In this case, the agent must reveal his status

as a licensee in the personal transaction (includes the purchase, sale, exchange, rental,

lease, or auction of real estate.) The agent meets this requirement by disclosing in

UNDERLINED CAPITAL LETTERS on the first page of the contract his status as a real

estate licensee.

2. The agent is working with the agent's immediate family, that is, mother, father, brother,

sister, children, any of their spouses or any business owned fully or partially by any of

these persons.

STRONGLY RECOMMENDED BUYER AGENCY EVENTS

It is the policy of this company that any agent working in any of the following circumstances is

strongly urged to work as a buyer's agent.

1. The agent is working with any relative by blood or marriage not in the agent's immediate

family as defined above.

2. The agent is working with a close friend, business associate or long term past customer or

client.

3. The agent is working with a seller of a currently or previously listed property to find property

to buy. The agent may be concurrently working with the seller to sell the property and

also working to buy a new property. This event also applies to a seller whose property is

under contract or closed and is working to buy a new property.

3.5.3 Length of Term

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Terms of the Buyer Agency Agreement will vary from buyer to buyer. However, a minimum

period of 45 days is recommended in order to allow sufficient time for the purchase and closing

of the transaction. A minimum listing period of 120 days is recommended. All agreements can

be extended with the written consent of both parties.

3.5.4 Cancellation

If a buyer wishes to cancel their buyer agreement, it is our policy to attempt to assign the buyer

to a different agent. We will always try to save the client. It will be at the Broker’s discretion to

release a client from a binding agency agreement.

3.5.5 Reserve Properties

Reserve 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, the

client must disclose the situation and the address to the agent prior to signing the Buyer Agency

Agreement.

3.5.6



Submission to Office

Upon signing of the Buyer Representation Agreement the complete file for the Buyer must be

uploaded into the Fathom Realty transaction management system within 48 hours of execution

date. Further, agents are responsible for submitting the transaction for review and approval at

least 3 to 5 business days prior to closing. Failing to submit paperwork in accordance with

company policy is a violation and may result in a delay in closing and the processing of

commission disbursements, and/or result is all compensation being paid through the Market

Center.

3.5.7 Cancellation or Withdrawal

If the Buyer Representation Agreement is canceled or withdrawn, it is the obligation of the

Buyer’s agent to furnish a list of all possible properties under consideration that were presented

by the agent and to protect that list of properties for a 90-day period. If the Buyer re-signs a

representation agreement with a different Brokerage Company, the protected property list is

null and void unless the Fathom agent can provide a strong case for procuring cause. These

instances should be discussed with the Broker to determine the appropriate course of action on

a case-by-case basis.

3.5.8 Other Buyer’s Agents

If a Buyer you encounter says they are working with an agent, it is critical to ask if the buyer has

signed a Buyer Representation Agreement with the other agent. If the buyer has signed an

Exclusive Buyer Representation agreement with another agent, you may not pursue that buyer,

except at their request as per the NAR Code Of Ethics. Do not solicit clients who are already

working with another brokerage firm. Please note that all mass/targeted marketing materials

Fathom Realty Page 22 of 79

that are sent out must include a disclaimer indicating that the marketing is not an attempt to

solicit business from a customer who has already hired another agency to represent them.

3.5.9 Fees

All fees charged to the buyer must be approved by the District Director. This includes but is not

limited to: retainer fees, hourly fees, transaction fees, cancellation fees, and FSBO flat-fee

compensation fees. All fees paid by the buyer must be reported on the HUD closing statement.

Agents must abide by the state rules regarding agents charging transaction or other fees to their

clients. Fathom Realty does NOT endorse agents charging their clients any transaction or

“brokerage” fee at the close of sale.

Fathom Realty will charge an administrative/bookkeeping fee for all monies that come through

the firm related to miscellaneous fees or referral fees as noted in the above paragraph. Please

reference your schedule A.

Section 3.6

Other Brokerage Activities

3.6.1 Broker Price Opinions/Comparative Market Analyses

Most appraisals of real property have been (and still are) required to be performed by a licensed

or certified real estate appraiser. However, some states, have allowed a limited exception to this

requirement that allows real estate licenses to perform a “Comparative Market Analysis (CMA)”

so long as the real estate licensee does not represent himself or herself as a license or certified

appraiser or registered appraiser trainee. The term “Broker Price Opinion (BPO)” has been

considered synonymous with the terms “CMA”. The primary issue involving CMAs/BPOs pertains

to when they are performed for parties who are NOT “actual” brokerage clients and the

question is whether the party for whom the CMA is performed is a legitimate “prospective”

client. Fathom Realty’s policy regarding CMAs/BPOs is to allow our agents to perform a

CMA/BPO for a fee



so long as the following conditions are met:

a) There is a genuinely reasonable possibility that the broker will enter into a brokerage

agreement as a sellers’ or buyers’ agent for the property that is the subject of the CMA.

b) The broker’s license is in good standing, on active status, and the agent is a full broker

(not provisional).

c) It is not for an existing or potential lienholder or other third party where the CMA/BPO

is to serve as the basis to determine the value of a property for the purpose of

originating mortgage loan, including first and second mortgages, refinances or equity

lines of credit.

d) The CMA/BPO does not estimate the value or worth of a parcel of or interest in real

estate and instead, it can only estimate the “probable selling price or leasing price”

preferably listed as a range.

e) The broker must have knowledge of the real estate market where the subject property

is located, direct access to market sales or leasing datate where the subject property is

located, and brokerage experience in the subject property’s local area.

Fathom Realty Page 23 of 79

As allowed by state laws, any Fathom broker is permitted to perform a BPO/CMA for any party

when NO FEE is charged.

3.6.2 Office Procedures to Safeguard the Confidentiality of Information

CLIENT INFORMATION

"Confidential information" is defined as information about a person's assets, liabilities, income

and expenses; personal information; motivations to purchase, rent or sell real estate; bargaining

information (for example, a price a client is willing to pay or accept, previous offers made or

accepted); and information which a client tells you is privileged, private or confidential.

Information about the physical condition of a property should be discussed with your Broker.

Confidential information concerning a client of the Company should never be discussed with

other sales associates or sales associates from other companies.

Client files are confidential, and sales associates should not review another sales associate's file.

All negotiation, in person or phone, must take place in a conference room or other secure

location. No messages of a confidential nature concerning the seller should be left with anyone

other than the listing associate. Similarly, no messages of a confidential nature concerning a

buyer client should be left with anyone other than the sales associate working with that buyer.

Care should be taken in using fax, photocopy machines, and online cloud storage servers to

ensure that confidential information is not revealed to others. Confidential information should

not be revealed or discussed during office meetings or other gatherings of sales associates.

AGENT INFORMATION

"Confidential information" is defined as information about an agent's income, transaction

volume, details of transactions, expenses, personal financial information (to include credit card

payment information). This includes agent login information to access to cloud storage or

technology platforms.

Confidential information concerning an Independent Contractor of the Company should never

be discussed with other employee, Independent Contractors, or sales associates.

Independent Contractor files are confidential and may be maintained on a secure device and/or

cloud server that is password-protected. Access to these confidential files is only granted to

employees of the firm on a “need to know” basis and is not to be stored on a local device. In the

event that a device is compromised (this includes not syncing a local device to a cloud server),

Independent Contractors will immediately notify their supervisor so that appropriate

remediation efforts can be made to protect the agent and/or other affected parties.



.6.3 Overview of the Process for Bidding on HUD Properties



The following Fathom Policy explains the process for bidding on HUD properties on behalf of

Fathom clients. All agents should be aware that bidding on HUD properties is a privilege. The

ability to bid on U.S. government properties should not be taken lightly. By agreeing to the

company policy, you are acknowledging that you have read and understand your responsibilities

as a representative of Fathom Realty to the U.S Government while bidding on HUD properties.

Fathom Realty Page 24 of 79

Step 1. Contact your District Director to confirm that a Fathom NAID number is available for

your area/state. Confirm the firm name, NAID #, EIN #, and principal broker’s name & email

address (You will need this information in Step 2). Comply with any local policies and complete

internal documentation that your Principal Broker may require.

Step 2. Register as a selling agent on the HUD HomeStore website PRIOR TO SUBMITTING A BID.

Registering should only take a few minutes. You can learn more about how to register as a

selling agent at this link: HUD Registering as a Bidder

LINK ADDRESS:

https://www.hudp260.com/Documents/HUDHomestoreBidderRegistration_esigs.pdf

NOTE: You will need to enter the following information during the registration process:

Firm Name: Fathom Realty ___________, LLC

NAID # is: _______________

EIN # is: _______________

Principal Broker: _________________

Principal Brokers email address:___________________________

Step 3. Go to HUDHomestore.com and login to the site using your new registration info that you

created in Step 2. Once you login, search for and then click on the listing to view the property.

Step 4. On the “Property” screen – click “Submit a Bid.” Complete step-by-step directions are

provided to submit a bid electronically. READ THE INSTRUCTIONS CAREFULLY and be sure to

verify your client’s identity. REMINDER: Do not submit a bid without first verifying that your

client’s driver’s license information matches their name/SSN/etc.

You will need to submit accurate email addresses for the following people:

The Selling Broker who will sign the contract

Up to 4 Buyers

The Closing Agent (Closing Attorney or Title Company)

If necessary, this required information can be changed once the bid is accepted. The new

e-signature sales contract will need accurate email addresses for all parties since sales contracts

will be sent to those email addresses for electronic signing.

Step 5. If your buyer’s bid is accepted you will be notified by HUD via email sometime the

following business day (usually by 2:00pm). The bid information will be posted on the website,

as well as any possible back-up offers that are acceptable to HUD. The clock is now ticking.

When the Sales Contract is created, the Selling Broker is sent an email detailing contract

requirements. The Selling Broker accesses the Accepted Bids/Checklist screen in

HUDHomestore.com and selects the Verification checkbox for each section of the bid: the

Designated signer, the purchaser, and the Title Company/Buyers Select Closing Agent.

The Selling Broker may be prompted to add information or upload additional documents. If

required, proof of the earnest money deposit must be uploaded.

Fathom Realty Page 25 of 79

Once this information has been submitted, the Asset Manager for HUD will initiate the

generation of the E-Signature process. The signers will then be contacted at their email address

to digitally sign the contracts.

NOTE: When a bid has been awarded, agents will ONLY have 2 business days (48 HOURS) to

submit contracts to the HUD Asset Manager.

This means:

Every required document necessary to complete the transaction must be completely e-signed

along with the earnest money deposit check made out to HUD, within 2 business days from

award notification.

Not doing so may cost the buyer a property and you a commission.

Required forms are as follows:

oSales Contract – HUD Form 9548 and certification of broker form.

oAddendums: Lead-Based Paint, Radon & Mold, Earnest Money Deposit, Forfeiture and

Extension Policy, Home Inspection, Owner Occupancy (if applicable).

oA Pre-Qualification letter from a certified, licensed lender is a requirement on all sales

containing a mortgage contingency.

oAdditional forms may be required depending on locality.

IMPORTANT THINGS TO REMEMBER:

●Verify identity of client bidder before submitting an offer!

●No repairs to be made by Buyers prior to settlement!

●HUD homes are typically sold “AS IS”.

●Pre-settlement inspections are strongly recommended. If client declines an inspection,

you must have this in writing.

●Timely submission of ALL necessary documents are required to secure the sale!

●BE PREPARED: Even with the electronic signature process, you may incur

Fedex/Overnight charges to meet HUD’s deadline once your buyer’s bid is accepted.

Step 6. You can check the status of your client’s bids by logging into your account and clicking on

“Bidding Resources” at the top right of the screen. You can search by property/confirmation # or

status of the bid.

For more detailed step-by-step instructions on the HUD bidding and new e-signature process,

you can download the following PDF created by Yardi for HUD: HUD Bidding and E-Signature

Guide

Link address: https://www.hudp260.com/Documents/HUDHomestoreBidSubmission_esigs.pdf

Video instructions are available at the following link: HUD Video Guides

Link address:

https://www.hudhomestore.com/ListingSiteFAQ.htm?utm_source=WhatCountsEmail&utm_me

dium=HUDHomeStore%20&utm_campaign=HUD%20Home%20Store%202017-04

Section 4.0

Showings, Open Houses, and Prospects

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4.1 Showing Listings

a) All showings are to be by appointment or at the direction of the seller, or when the

seller authorizes showings through a showing service.

b) If you arrive at a home and your buyer does not to want inspect the interior, it is a

courtesy to go to the door to inform the owner, in person or in a note, or to cancel

via the showing service. 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. We recommend that you put the date and time on the card.

d) 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

agents.

e) Unless declined by the seller, you may show any property unless there is a signed

purchase agreement accepted by both owners and buyers. In the event that the

seller requests back-up offers, property may still be shown. If there is an

outstanding counter-offer you may still show the property with the seller’s

permission through the listing agent or showing service.

4.2 Prospect Protection

Cooperation creates a win-win-win situation for the sellers, buyers and you as the Fathom

Realty agent.

a) Therefore, Fathom offers these guidelines for open houses with prospects entering and

viewing an open house.

1. Any Fathom Realty agent may stop by your open house with a prospect without

an appointment and accompany the prospect through the home. If a sale

results from the showing to that prospect, the buyer portion of the sales

commission goes to the showing agent.

2. Here is a scenario: Fathom Realty Agent A informs their client/prospect in

advance of an open house and notifies the open house Agent B that a prospect

(by name) will be coming to the open house, unaccompanied by the Fathom

Realty Agent A. In this situation, the firm’s position is that Agent A is entitled to

receive 100% of the sales commission, in the event a purchase agreement

written (even if it is written by Agent B) is accepted by the seller.

2. If in the rare event, and lack of a Buyer Representation Agreement; Fathom

Realty Agent A has been working with a prospect and has shown the prospect

homes, developed rapport, etc. and the prospect still enters a Fathom Realty

open house of Fathom Sales Agent B, without previous notification, Agent A

Fathom Realty Page 27 of 79

will receive the buyer’s agent portion of the sales commission. As a

professional courtesy, open house Agent B will contact Agent A and report that

prospect did come through the open house, was interested in it, and that the

Agent A should follow up with the prospect.

b) Fathom Realty requires that agents register ALL leads in the company lead management

platform for the market center. Leads must be entered/imported into the lead management

platform immediately to ensure that the agent receives credit for working with the lead and to

confirm that no other Fathom agent is already serving the client. As a general rule, prospects

that are not registered are not protected



. If the situation arises where a lead is already

registered with another Fathom agent, the firm expects the agent will contact the agent who

has already claimed the lead to inquire about the status. If the agents cannot agree on what is in

the best interest of the client going forward and reach a mutually agreeable decision, the Broker

will review the situation and make a decision regarding who is entitled to serve the client and

how each party will be compensated. The Broker’s decision regarding the matter will be final

and all parties are expected to comply with the Broker's guidance.

4.3 Safety for Agents

Real estate sales agents routinely find themselves in situations in which they are alone with

clients or customers about whom they have very little information. The very nature of showing

real estate to prospective buyers and tenants who are virtual strangers can make agents, both

men and women, susceptible to becoming victims of violent crimes. Fathom Realty recommends

that all agents follow three basic safety practices:

a) Identify the person you are working with before you join him or her alone, in a car or a

house. Preferably meet them at the office, copy his or her driver’s license and make

sure someone from the office knows where you’ll be going with the person.

b) Always carry your cell phone with you and make sure it is fully charged and has

reception. Program 911 into speed dial and don’t hesitate to call for help.

c) Trust your instincts. If you have a bad feeling, don’t second-guess what it’s telling you.

Listen to your gut feeling and protect yourself.

d) For more detailed safety tips and practices, please consult your state’s Real Estate Agent

Safety Guide.

e) In addition to following the procedures discussed in the Safety Guide, agents must have

a current Agent Personal Information Form on file with their Broker. Agents also should

ask that each new client or customer complete a Client/Customer Identification Form

before going to view property, and they should fill out an Agent Itinerary Form before

each appointment.

Section 5.0

Obtaining and Presenting the Purchase Agreement

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5.1 Disclosure of Sellers Agency Relationship

Prior to writing or presenting an offer to purchase a property, all agents must fully disclose the

agency relationship that you are in at the time and have clients sign applicable forms as required

by state law.

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 both clients, listing and

sales agent, mortgage companies and title companies process the sale.

b) All applicable purchase agreement addendums must be signed by all parties, have

an execution date, and remain with the original purchase agreement.

c) The lack of a complete understanding of all terms of the purchase agreement can

create problems later. Make certain all parties review the entire document and

make every effort to see that they understand the offer. If legibility is an issue, an

unsigned ‘for clarification’, clean readable copy may accompany the original.

d) Non-Realty inclusions and exclusions can also create issues. 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 via a non-realty addenda or

separate personal property bill of sale. Consult the buyer’s mortgage company for

guidance on the best method of handling non-real estate items on the purchase

agreement as it relates to loan qualification of the buyer.

5.3 Multiple Offers

a) The company will always be guided by lawful instructions of the client in any

multiple offer situations. While the company believes that these procedures protect

the client, the client may choose to give the company other lawful instructions. The

agent should discuss with the client, whether seller or buyer, the customary

procedures for handling multiple offers so that the client may determine whether

the client wishes to give the agent or company different instructions.

b) Standard of Practice 1-15 of the Code of Ethics requires that the listing agent, in

response to inquiries from buyers or cooperating brokers shall, with the sellers’

approval, divulge the existence of offers on the property. In addition, Standard of

Practice 1-15 requires that, when disclosure is authorized, the listing agent has an

affirmative obligation, if asked, to disclose the “source” of the offer, i.e. whether the

other offer(s) are from a prospect of the listing licensee, another licensee in the

listing licensee’s firm or a cooperating broker.

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c) In the event of multiple offers on one property, Fathom Realty follows a policy, with

the seller’s approval, of notifying all offerors that his/her offer is in competition with

other offers as well as giving the opportunity to change the offer. The notification

shall take place only after multiple offers actually exist and not when the listing

agent may have knowledge of other offers being written or possibly being written.

d) An exception to this policy exists if the seller has a currently effective counter offer

in possession of a buyer. In that event, the agent will not disclose the competition

to the second or later offeror until the seller has had the opportunity to examine the

second offer. This gives the seller the ability to determine whether he/she desires

to revoke her/his counter offer to the first offeror to negotiate with the second

offeror.

e) State real estate commission laws prohibit disclosure of the price or other material

terms contained in a party’s offer to purchase to a competing party without the

express authority of the offering party. Therefore, the agent should not reveal any

terms of the offer to any other party including expiration time of the offer, price,

closing dates, earnest money amounts, financing types, amounts or dates or other

terms.

f) If another agent, whether from Fathom Realty or another company, asks the listing

agent to "let me know if another offer comes in", Fathom Realty has a general policy

of not acknowledging such requests. If other offers come in, the agent should advise

the client that inquiries of this nature have been made and ask the client whether

those requests should be followed up.

g) If multiple offers exist and the listing agent has written one of those offers, the

policy of Fathom Realty in such circumstance is that the listing agent may not

present any of the offers. In this case, the Broker (or other Fathom Realty agent if

management is not available) must be asked to present the multiple offers.

h) If a listing agent has already presented an offer from another agent and a customer

of the listing agent asks to write a competitive offer, the policy of Fathom Realty is

that the listing agent must ask the Broker or other Fathom agent to write the offer

for the listing agent's customer. The listing agent's prior knowledge of the first offer

could be seen as influential or biased if the listing agent's customer should be

successful in negotiation.

i) In general, whenever the listing agent has knowledge of an offer presented, or could

use information he/she has to the detriment of one of the competing parties,

Fathom Realty strongly recommends that a third party agent, such as a Broker or

Group Leader or other agent, become involved to assist in the negotiations.

j) A final issue regarding presentation of offers regards whether an oral offer must be

presented. The rules of each state’s Real Estate Commissions speak to presentation

of “instruments,” thereby implying that only written offers need to be submitted.

However, common law agency principles dictate that all material and relevant

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information of which the agent has knowledge should be given to the client. In

addition, Standard of Practice 1-7 of the REALTOR Code of Ethics speaks only of

submitting all offers to the seller.

k) In accord with agency obligations of disclosure and loyalty and in the spirit of the

Code of Ethics, Fathom Realty’s has a policy of giving the seller client all material and

relevant information of which the agent has knowledge. In accord with this policy, if

a customer insists on an oral offer, the company believes that the seller is entitled to

that information.

l) The company recognizes that such an oral offer alone is almost certainly

unenforceable under the laws of most states. However, it is prudent to tell the

seller what the agent knows, that is, an oral offer was made by this party and it is

unknown whether the party will ultimately be willing to commit the offer to writing.

At this point, a seller may choose to make a written offer to sell and thereby initiate

the contract process him/herself.

m) Additional resources on this topic are available on REALTOR®.org, Law and Policy.

The NAR Professional Standards Committee has published a guide for agents and

brochure for buyers and sellers on “Presenting and Negotiating Multiple Offers.”

5.4 Timing of Presentation

a) Fathom Realty strongly supports and maintains a policy to present all offers and counter

offers as quickly as possible. Standard of Practice 1-6 of the Code of Ethics provides the

standards in this area. The Rule requires offers and counter offers to be delivered “as

quickly as possible."

b) The policy of Fathom Realty is that these terms are to be interpreted to mean

"immediately" or "as soon as humanly possible". As an example, a listing agent's receipt

of an offer should immediately generate a telephone call to the owner to determine

when the seller is available for presentation of the offer. Once contacted, the seller can

then instruct the listing agent as to when to present the offer. The listing agent MUST

make a diligent effort to contact the seller immediately upon receipt of the offer - not

an hour later, not when the agent finishes lunch, not after the agent shows property.

c) In the case of a buyer agency, the same principles apply with equal weight. The buyer is

the client and must be treated with the same high levels of fiduciary duty as a seller who

is a client. These same principles should be adhered to even in the case of a buyer who

is a customer and not a client.

d) This is an extremely simple yet very important risk reduction technique. Every agent of

this company should consider this of prime importance. The obvious danger in not

taking this issue seriously is that the offeror can revoke/withdraw her/his offer at any

time prior to a valid acceptance. Fathom Realty does not want to be in a position of

defending an action where an offer was withdrawn before a seller was contacted or

diligent efforts to contact the seller were not made.

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e) These issues are common, daily events that the agent should learn to handle with skill

and ease. The agent's ability to understand and deal with these issues will act as a

significant risk reduction method and contribute to an agent's successful practice of the

real estate business.

5.5 Earnest Money

a) The purpose of the earnest money is to show good faith and commit the buyer to the

purchase. More earnest money, means the buyer is more committed to complete the

transaction. Fathom Realty sees an average of $1,000 earnest money for the average

property. Earnest money should be proportional to the price of the property.

b) It is a company policy to NOT accept earnest money or to deposit funds in a Fathom

escrow account. All earnest money deposits must be held by the cooperating brokerage

OR closing/title company in an escrow account.

c) The Buyers should make the earnest money check payable to the selected Title/Escrow

Company. If the buyer has cash for the earnest money instruct them to purchase a

money order. (Many convenience stores sell money orders for a minimal fee.) At no

time are agents permitted to handle cash.

d) Earnest money must be deposited immediately and in accordance with state law. Most

states require money to be deposited within 2 to 3 business days of receipt. In those

states where it applies, provisional brokers are NOT permitted to hold earnest money, it

must be deposited immediately or given to the Broker for handling until the deposit can

be made.

e) Explain to your client that if the amount of earnest money exceeds the down payment

and closing costs the excess will be returned to the buyer or applied to the closing.

f) Be sure Buyers know both Earnest and Option checks WILL be cashed, not just held until

closing.

g) If in the event an earnest money check is returned (insufficient funds or any other

cause) the agent must notify the seller and brokers on both sides of the transaction

immediately in writing of the returned check and work with the buyer to get certified

funds immediately deposited.

h) Disbursement of earnest money is the responsibility of the Escrow Officer who will make

the determination as to the recipients in accordance with the provisions of the sale

agreement, the provisions of license law, and any earnest money disbursement

agreement signed by both parties. In this regard, the Associate should not commit the

Broker or Escrow Officer to any decision as to the disposition of the earnest money

being held except that it will be applied to the amount owed by the purchaser when the

sale closes. The agent will place a copy of all papers relative to disbursement in the

canceled file and make a notation on the canceled contract as to how disbursement is

made.

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i) Earnest money on a back-up offer must be deposited in accordance with the contract.

You cannot wait until the contingency is removed.

j) Postdated checks and promissory notes will not be accepted as earnest money.

k) Improper handling of earnest money is grounds for immediate dismissal of an agent.

5.6 Real Estate Taxes

a) It is recommended that the Sales Associate refer clients to their tax advisor or CPA

for questions related to real estate taxes as it relates to the purchase or sale of a

residence/land.

b) Property valuations may change when a property is sold. DO NOT MAKE

REPRESENTATIONS TO CLIENTS AS TO FUTURE VALUE, TAXES, OR HOA DUES.

5.7 Buyer’s 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 qualify for the loan is the party who has signed

the contract.

b) All changes and corrections must be initialed by all parties to contract. Never make

changes or sign or initial on behalf of a client, even when you have been asked to

by either party.

c) E-signatures can be used for contracting the agreement as long as the document is

coming from the buyer’s email address.

5.8 Appointment to Present the Offer

a) All offers should be typed or printed legibly and the earnest money check made

payable to the closing/title/escrow company and should accompany the offer. In

some states, the earnest money check must accompany the offer. Consult state laws

regarding the handling of earnest money as it relates to the Purchase Contract. A

copy of the earnest money check will be made and uploaded for the office files.

b) The listing agent/broker should be contacted immediately for presentation of the

offer.

5.9 What Offers Are To Be Presented

a) Fathom Realty requires that all written offers on a property are to be presented

immediately. The offer must be accompanied by an earnest money check.

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b) Oral offers have no validity in real estate transactions and if presented verbally,

they are not enforceable by law. Notify all parties that the offer is not binding until

it is in writing and signed by all parties.

c) In the event there are offers from more than one buyer, all offers deserve equal

consideration regardless of the sequence in which they were written. All offers

should be presented as they are received. The seller’s agent does not have the

authority to disclose to the buyer’s agents or buyers that there are multiple offers

without the written authorization from the seller. When given that authorization,

the listing agent will notify the buyers agents of the multiple offer situation and

discuss how those offers are going to be presented. If the offers are from

intermediary buyers and there appears to be a potential conflict of interest, the

Broker must be contacted for possible presentation of those offers, or assignment

of buyer representation. In multiple offer situations, the listing agent should abide

by the rule of thumb - “what you tell one side, you have to tell the other.”

d) In the event there is an outstanding counter-offer on a home, a new offer may be

presented if received prior to the acceptance of the counter-offer by the first

buyer.

5.10 Presenting the Offer

a) The listing agent typically presents the offer, however, the selling agent 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.

c) It is a good business practice to prepare a "Seller's Estimate Closing Statement/ Net

Sheet" and review it with the seller at the time the offer is presented.

5.11 Acceptance of a Counter-offer

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

a) If the offer is accepted without change, have the seller sign it. At the time that the

offer is signed, the contract is executed. The original purchase agreement,

addendums, and the earnest money are held (and deposited) by the listing firm. All

parties must receive a copy of all executed documents.

b) If the offer is changed in any way it becomes a counter-offer. In the case of a

counter-offer the seller must sign the counter-offer and agree to the modified

terms. The counter-offer becomes a contract when it is signed by all parties. Copies

should be distributed as in a.) above.

c) Never take or make verbal assurance to another agent that something "will be okay

with the my client. Don't bother to change the contract." Get all changes to the

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contract signed and initialed, (dates, and times are helpful); if you do not, you may

be legally and financially responsible.

d) When a contract is terminated, all forms and a copy of the earnest money check

from the executed offer are to be uploaded into the Back Agent system to comply

with E&O insurance requirements.

e) 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 may be dated but that is not a

requirement.

5.12 Purchase Agreements

a) 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 exactly what the client

intended. The sale will be closed according to the terms in the Purchase

Agreement. When accepted, the Purchase Agreement becomes a binding contract.

b) Should Terms or stipulations be changed in the Contract, the agent must have an

addendum showing the change and execution date, signed by the Buyer and Seller,

in the file prior to closing.

c) All accepted Contracts must have the following information pertaining to buyer

and seller: Property address, Client phone number, Client email address, and

Clients’ attorney/title company’s information if applicable.

d) Purchase Agreements must also have the following necessary information:

property address, legal description, sale price, date for securing financing, closing

and possession dates, and consideration.

e) If the offer must be sent out of town for "signatures", an overnight service should

be used. Fax signatures may not be substituted for originals. Secure E-signatures

are accepted on all contracts except HUD sales contracts.

5.13 Cancellation of A Contract

A contract, including the clause "null and void and the earnest money is to be returned to the

buyer," may not legally cancel the offer. A contract will only 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 termination/cancellation agreement signed by the terminating party.

Always discuss any pending terminations/cancellations with your Broker.

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5.14 Rejected Offer

If the seller rejects an offer or if either the buyer or the seller rejects a counter-offer, make sure

to write REJECTED on the offer or counter-offer. Have the party initial and date the REJECTED

area as well as the notation of REJECTED or Void across the face of the contract. This will help

prevent confusion going forward.

Section 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,

title search/title opinion rendered, loan processing, inspections, 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.

b) If a mortgage is being used, the buyer’s agent must remain in contact with the loan

officer.

c) Agents will comply with state laws that required a buyer’s agent to notify the listing

agent IF the loan is not approved. Final commitment should come from the loan

officer.

d) In the event an appraisal comes in below the agreed upon sales price, the buyers

agent will be informed by the lender and the parties will need to renegotiate the

sales price in the contract (assuming outside funding is involved). If negotiations are

successful, the new offer will be re-submitted to the loan company for approval. If

renegotiation attempts fail, listing agent should be informed so various charges

incurred are not incurred unnecessarily. The closing/title company and property

may be put "back-on-market,” and earnest money returned to the buyer.

e) In the event that a buyer is not able to qualify for the loan, the listing agent 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" termination forms are still required. The agent

will obtain all necessary signatures prior to the release of earnest money and upload

all pertinent documents into the transaction management system.

6.2 Option and Earnest Money Delivery

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In states where applicable, once a contract is executed, the buyers agent MUST deliver the

Option Fee to the Sellers or the Listing Agent within 48 hours of execution. Failure to do so may

result in the buyer losing the right to terminate the contract.

The Listing Agent should deliver the contract and Earnest Money to the negotiated title

company/closing attorney within 2 days of execution.

6.3 Inspections

TERMITE, HOME, AND ALL OTHER INSPECTIONS, IF DESIRED BY THE CLIENT, SHOULD ONLY BE

ORDERED BY THE BUYER. Agents should only provide the contact information for the

professionals who are qualified to perform necessary inspections. The buyer should choose his

or her own criteria for an inspector. The Agent will provide a list of 2 or more inspectors that

are licensed and bonded to the buyer. If the buyer chooses not to get an inspection, they must

sign the decline of home inspection form.

6.4 Final Closing Documents

Closing documents such as fees for preparing and filing deeds, mortgage payoff, mortgage

amount, sales expenses, etc. will be included on the actual HUD-1 closing statement for the

buyer and seller, and prepared by the closing /title company.

All pertinent and signed transaction documents must be uploaded into the Back Agent system

96 hours prior to closing and the disbursement of funds.

Filing, disbursement, and change of possession cannot be made until all funds are collected from

buyer and/or seller, and declared ‘funded’ by the title company. Table Funding is the preferred

method of agent commission dispersement.

6.5 Wire Fraud

Fathom Agents must talk to your buyer and seller clients regarding the threat of wire fraud.

Wire fraud has become a serious concern that has cost buyer and seller clients in real estate

transaction millions of dollars nationwide. To help inform our clients, Fathom Realty strongly

recommends all agents add the language below provided by NAR to all written correspondence

with buyer and seller clients.

"Never Trust Wiring Instructions sent via email. Cyber Criminals are hacking email accounts and

sending emails with Fake wiring instructions. These emails are sophisticated and

convincing. Alwaysindependently confirm wiring instructions in person or via a telephone call to

a trusted and verified phone number. Neverwire money without double-checking independently

that the wiring instructions are correct and have not been compromised."

This notice does not serve as a substitute for educating your clients and other participants in

your real estate transactions about email wire fraud. For more info about best practices to avoid

victimization by cyber criminals see “Protecting Your Business and Your Clients

From Cyberfraud” from NAR.

6.6 Down Payment

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a) Transactions cannot be closed nor any funds be disbursed until such time as a

personal check has cleared the bank account. Title companies require certified

funds for any amount over $1,500. This amount may vary by state. Consult your

state’s policy regarding this requirement. Make sure your buyer has the proper

amount from the title company in time to get the certified funds to close.

Post-dated checks CANNOT be accepted. Checks cannot be ‘held’. All checks will be

deposited the day they are received or the next banking day.

b) In the event there is a seller shortage of funds necessary to close the transaction,

the title company may hold the transaction and insist certified funds be collected

before closing.

6.7 Commission Payment

a) Upon receipt of all closing documents, proceeds, and reporting, commission checks

are cut by the title company/closing attorney, in accordance with a CDA Commission

Disbursement Authorization that is provided to them by the Fathom Realty

Compliance Department (this is referred to as ‘Table Funding’).

b) All forms relating to the transaction must be approved by the District Director in the

transaction management platform and the CDA must be delivered to the title

company/closing attorney by the Fathom Realty Compliance Department in order

for the commission check to be issued. If there is a form missing or if there are

mistakes, the check will be withheld until the corrections are made and the

appropriate forms are uploaded and approved.

c) On those occasions when closings occur prior to the transaction file being complete

and approved by the District Director, the title company/closing attorney will issue

the entire commission check to Fathom Realty. Our Accounting Department will

issue the agent commission check when the file is complete (this is referred to as

‘Standard Funding’).

6.8 Team Commission Disbursement

A Team Leader has two options with regard to how they want to handle documentation

submission and commission disbursement with their team members.

a. Option 1: Team Leader managed CDAs

●Team Members submit their paperwork to the Team Leader or the team’s Admin

Assistant for review and approval

●Team Leader or Admin uploads paperwork to Team Leader’s account in the Transaction

Management platform

●Team Leader or Admin will create the CDA with Team Member listed as referring agent

●Team Leader or Admin submits the CDA for Manager approval

●Manager approves CDA and sends a confirmation email to all agents on the CDA (Team

Leader and Team Member) as well as the title company or closing attorney

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Note 1: This will give the Team Member an opportunity to verify correct commission amount

Note 2: Team Members should not be given access to another agent’s or Team Leader’s account

as the account contains personal information. Approved Admin Assistants are the only people

authorized to access an agent’s account.

b. Option 2: Team Member managed CDAs

●Team Member uploads the paperwork to their own account in the Transaction

Management platform

●Team Member will create the CDA with Team Leader listed as the referring agent

●Team Member submits the CDA for Manager approval

●Manager approves CDA and sends a confirmation email to all agents on the CDA (Team

Leader and Team Member) as well as the title company or closing attorney

Note: This gives the Team Leader an opportunity to verify correct commission amount.

6.9 Early/Extended Possession By Agreement

a) Do not permit extended or early possession of a property without a properly

executed possession agreement or rental agreement if more then 7 days (called a

Seller Lease Back or Buyer Lease Back). The file must contain the appropriate

document, signed by the seller and buyer. Both should make sure they have proper

insurance coverage on the real property and their personal property.

b) Any money due under an early or extended possession agreement shall be funds

payable directly to the appropriate party.

6.10 Attendance at Closings

Attendance at closings is strongly encouraged. It is an excellent client relations tool, and can

lead to preemptive troubleshooting. It is best to stay in the background, but in the event you

see something is not in accordance with the contract, you should politely call this to the

attention of the closer. Upon receipt, the sales agent will review the closing statement with the

client, preferably as time allows, prior to the formal closing.

6.11 Uploading Final HUD

Agents will upload the final executed HUD-1 settlement statement signed by all parties to the

Transaction Management platform within 24-48 hours of closing. A transaction will not be

considered complete and cannot be filed to comply with Errors & Omission requirements

without the HUD-1 signed by all parties. Failure to ensure that the final documentation is

uploaded in a timely manner is a serious compliance issue and may result in the loss of the table

funding privilege. In the case where an agent loses table funding privileges, commission to the

agent will be withheld until final HUD is uploaded & approved in Transaction Management

platform.

Section 7.0 Leases

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7.1 General overview

Agents can assist clients in leasing property via three methods: listing, leasing or referring.

Fathom company policy is that we do not allow agents to perform Property Management

functions.

Listing: The agent assists and represents the landlord in finding a tenant via MLS advertising and

signage. When listing a lease property for a landlord, the agent will not perform landlord or

property management functions to include providing or preparing a lease, negotiating a lease,

or accepting monies on behalf of the landlord.

Leasing: The agent assists and represents the tenant in finding a suitable property. The writer of

the lease may vary, typically the Leasing Agent writes the lease on state promulgated forms.

However, some Landlords and /or Property Managers prefer to write their own leases.

Referral: some apartment complexes utilize their own systems and forms. They write the lease

and simply pay the Leasing Agent a referral fee. The agent does not provide representation to

the tenant/client in these cases, and the complex does not provide the Agent with a copy of the

lease.

7.2 Explanation of Permitted Leasing Functions

When marketing a rental property, Fathom agents are permitted to perform the following

functions:

1. Assist the landlord in completing the approved state standardized lease form. Agent will

not draft a legal document to include amending a standard form in any way.

2. Assist the landlord negotiating a lease by preparing a market analysis and

communicating lease amounts to/from both parties in the transaction. This negotiation

is part of procuring a tenant.

3. Accept commission funds from the landlord for both the listing firm (Fathom) and the

cooperating firm (which will be paid by Fathom to the cooperating brokerage). Fathom

agents are NOT permitted to accept deposits, application fees, OR lease payments made

payable to the firm. Fathom agents can accept and hand-deliver non-commission funds

to the landlord so long as they are made payable to the landlord so that we are not

involved in processing non-commission monies. Do not accept ANY funds made payable

to Fathom Realty except commission checks.

When representing a tenant, Fathom agents are permitted to perform the following functions:

1. Assist the tenant by running property searches, showing properties, and performing

marketing analysis to determine fair market rent prices.

2. Deliver application and application fee to the landlord/listing agent.

3. Review the lease with the tenant. If not an approved state standard form, the agent

should strongly advise the client to have an attorney to review the lease prior to them

signing.

4. Once the lease is executed, the Client (not the Fathom agent) should deliver any

deposit/lease payment checks directly to the landlord/listing brokerage.

5. Communicate in writing with the listing firm/landlord with instructions on the payee for

the commission check (Fathom Realty) and address where it should be mailed.

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7.3 Internal Accounting of Lease Transactions

For accounting purposes, it is very important that all Fathom agents involved in lease

transactions follow the appropriate steps in the Transaction Management platform. Listing

agents should submit the transaction for approval. The District Director will generate

the Fathom Lease Commission Invoice and send it to landlord showing them the amount of

commission owed to Fathom Realty and the cooperating brokerage (tenant's agent). The

Fathom agent is responsible for collecting the commission check payable to Fathom Realty so

that all parties can be paid. In Transaction Management platform, the Funding Confirmation

(Internal document) will show disbursements that will be made to Fathom (lease transaction

fee), Fathom agent (commission), Cooperating brokerage (commission) so that we can ensure all

parties are paid appropriately. When representing the tenant side, agents should use the

Funding Request to detail your commission breakdown so that we can ensure you are paid in a

timely manner once the check arrives from the listing brokerage/landlord.

7.4 Forms

Every lease file must contain an agency disclosure form in addition to those forms noted below:

a) Listing: If Fathom Realty is the listing firm, the agent is required to disclose agency

relationship and have the clients sign agency disclosure as required by state laws.

The agent will upload the Listing Agreement (and agency disclosure form if required)

in the transaction management platform.

b) Leasing: A representation agreement is highly recommended. Additionally, an

agreement for compensation (between brokerages) and IRS Form W-9 for Fathom is

to be provided to the cooperating brokerage.

c) Referring: Provide the agreement for compensation (between brokerages) and IRS

Form W-9 for Fathom to the cooperating brokerage.

Section 8.0

Organizational and Administrative Procedures

8.1 Terms of Association

All personnel (Agents) acting in a sales capacity are "Independent Contractors." Agents 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 annual commissions paid to you.

Agents will sign an updated Independent Contractor Agent Agreement at the company’s

discretion (typically annually or bi-annually).

8.2 Conditions of Association

State Law requires that all associates selling or renting real estate be licensed by the State. After

receiving a reminder from the Broker, you are responsible for keeping your license current by

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referencing renewal dates and education requirements to renew. The sales associate is

responsible for the fee for renewing his or her own license.

Fathom Realty is a firm comprised of REALTORs®. 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 agent. We also recommend you attend many of the

educational programs sponsored by the various Boards where we are members.

8.3 Conduct of Associates

In order to succeed in working with the public, you will want to present yourself in a

professional manner.

a) You will want to be neat in appearance and make every attempt to create a

favorable impression. We suggest coats and ties for men when attending closings,

otherwise the attire should match the environment of the showings, i.e. land sales

might require casual slacks and boots. Your appearance should not distract from the

transaction.

b) A neat clean automobile reflects personal pride and organization.

b) It is suggested that you carry your sales and listing materials in a neat portfolio or

electronically.

c) We believe that it is unwise to consume alcohol when working. Therefore, it is a

guideline of our company that no member of the organization use alcoholic

beverages during business hours. No member of our firm should come to their office

and/or Market Center during business hours, or off hours, with alcohol on their

breath, or to any extent under the influence of alcohol. We consider this to be a

strict guideline. You are also encouraged to refrain from use of tobacco products

when with clients. Never attempt to operate a motor vehicle after consuming

alcohol. In addition to compromising your safety, the safety of your passengers, and

bystanders, this reflects poor judgment and is grounds for immediate dismissal from

the firm.

d) The use of any illegal drugs are not permitted and will cause immediate termination.

e) Agents are prohibited from conducting any electronic communication while

operating a motor vehicle when clients are in the car. Do not take or make phone

calls, send/receive text messages, or send/receive emails, when you have clients in

the car with you.

8.4 Limitation of Authorization To Sales Associates

Fathom Realty is not and shall not be liable for any expenses or obligations incurred by agent

/associates, unless a specific written authorization is granted by the Broker prior to the

obligation being entered into.

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8.5 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 and the

conduct of business during real estate transactions.

a) 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 state laws, including but not limited to the supervision of

salespersons in the performance of acts for which a real estate license is required.

The Broker also similarly charged with the responsibility to supervise and control all

activities performed by their employees and agents in the Fathom Realty 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.

b) To assist agents 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.

c) 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.

d) 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.

8.6 Conflicts of Interest

Fathom Agents shall not engage or participate in any activities which are in conflict with the

interests and activities of the Broker; engage in developing, managing, providing or marketing of

services comparable to that marketed by the Broker within the Market Center (the “Restricted

Area”).

a) Agents are permitted to work as a Loan Officer while affiliated with Fathom Realty,

however it is not permitted to represent a party to the transaction while performing

loan officer functions.

b) Agents are permitted to sell his/her own property including but not limited to when

the Agent’s name, Agent's spouse’s name, spouse’s company name, Agent’s

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company name and/or Agent’s trust name is on the title. This also includes

common interest. However, due to increased liability, certain restrictions apply.

Refer to your Schedule A (to the Agent Agreement).

c) Agents are not permitted to sell a business and/or contents of a business.

8.7 Fair Housing Declaration

FAIR HOUSING DECLARATION

As an agent of this Company, you agree to:

♦Provide equal professional service without regard to the race, color, religion, sex, handicap,

familial status, or national origin of any prospective client, customer, or of the residents of

any community.

♦Keep informed about fair housing law and practices, improving my clients' and customers'

opportunities and my business.

♦Develop advertising that indicates that everyone is welcome and no one is excluded;,

expanding my client's and customer's opportunities to see, buy, or lease property.

♦Inform my clients and customers about their rights and responsibilities under the fair

housing laws by providing brochures and other information.

♦Document my efforts to provide professional service, which will assist me in becoming a

more responsive and successful (REALTOR®) (real estate licensee).

♦Refuse to tolerate non-compliance.

♦Learn about those who are different from me, and celebrate those differences.

♦Take a positive approach to fair housing practices and aspire to follow the spirit as well as

the letter of the law.

♦Develop and implement fair housing practices for my Company to carry out the spirit of this

declaration.

8.8 Automobile Liability Insurance

As an "Independent Contractor" - you are responsible for maintaining sufficient insurance

coverage. State law requires that you have insurance coverage on your automobile.

We require two things:

●A minimum of $100,000/ $200,000/ $50,000 coverage. This is the break down: $100,000

for Bodily Injury - Per Person, $200,000 Bodily Injury - Per Accident and $50,000 for

Property Damage.

●The agent will provide a “certificate”/statement from your Insurance provider that

shows that Fathom Realty will be notified in the event the policy is canceled or changed.

The insurance company will ask the agent for the company name and address so they

can generate the certificate. Please use the 201 New Edition Ct. Cary, NC 27518

8.9 Termination

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All employment with Fathom Realty is “at will”. Either party may terminate the employment

relationship at any time and for any reason, with or without notice. There is no contract of

employment, either expressed or implied other than “at will”. These guidelines are not intended

to and do not create a contract of employment, nor are they a promise or guarantee of future or

continued employment. Policies and guidelines may be revised at any time at the employer’s

sole discretion.

a) When leaving the Company you must return all company property assigned or

loaned to you.

b) When leaving the Company, you must notify your District Director AND the

Accounting Department (accounting@fathomerealty.com) to ensure that all

outstanding balances owed, to include monthly dues, are satisfied per the terms of

your Agent Agreement. Notification of termination must be made to the

Accounting Department no later than the 25th of the month to ensure that you will

not be billed monthly dues for the month(s) following your departure from the

Company (per your Agent Agreement Schedule A). Agent dues are not prorated. If

fail to provide notice to the appropriate parties OR you leave the Company on the

2nd-30th of the month, dues for the remainder of month are not refundable.

c) Listings can move with the exiting agent, if they are remaining in the industry if the

listing was not provided through the company. Company assigned listing leads will

be handled on a case-by-case basis at the Broker’s discretion.

d) On signed transactions that are in progress including, but not limited to those in

title, commission pay-outs shall be subject to the agents current Schedule A. Agents

are entitled to receive commissions on transactions that are under contract at the

time of termination and close after the date of termination. The Company reserves

the right to assign another associate the closing responsibility and compensate them

up to 30% of your portion of the commission for their work on the transaction.

Fathom Realty reserves the right to deduct any fees or monies owed to the

company from the agent’s commission on a transaction following termination.

e) In the case of Buyer Representation agreements in place at the time of the

termination, the agent shall retain the buyers who have signed a buyer

representation. 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.

8.10 Errors And Omissions Insurance

a) The Company maintains and Errors and Omission insurance policy. The policy has a

$2,500 deductible per transaction that will be covered by the company in the event

of a claim (with exceptions listed in paragraph b) below). Each agent pays their

premium in their Fathom monthly office bill. The agent is welcome to also obtain

individual Errors and Omissions Insurance and/or carry an umbrella insurance policy

that will provide additional protection.

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b) There may be circumstances where E&O insurance may not provide coverage and

the deductible will not be covered by the company. These include cases of fraud,

commercial environmental issues, and transactions in which the Sales Associate

acted as a principal or property manager. Our E&O policy will not cover transactions

that are closed without District Director approval and without a Commission

Disbursement Authorization (CDA) approved by the Fathom Compliance

Department (prior to closing). In addition to voiding E&O coverage, the agent will

be subjected to a $500 fine for repeat offenses. In those cases, the agent will be

responsible for any and all expenses that result from the case.

8.11 Complaint Handling Procedures

a) When an agent has a complaint against another real estate affiliated business, they

will consult the Broker before taking any action. Do not make phone calls or write

letters to reprimand or complain about the actions or services provided by any real

estate affiliated institutions or businesses. This includes competing real estate

firms.

b) Any such justifiable reprimand or complaint will first be discussed with the Broker.

Any subsequent letter or call will be made or sent with Broker input & consent.

c) If a complaint is received from a client, the Broker will find as many facts as the

caller/writer will share, then as soon as possible, consult with the agent involved to

discuss the situation. The Broker at his/her discretion may seek appointment to

meet with the complainant. Depending upon the situation, the Broker will try to

resolve the situation directly with the offending party. If the parties involved in the

complaint/problem do not agree to this solution, it will be referred to the mediation

at the parties’ expense. If an acceptable resolution is not successfully mediated,

then the parties have the right to pursue alternative options.

d) Per the NAR Code of Ethics the sales associate must agree to cooperate and comply

with any order rendered by the independent mediator/courts.

e) If 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. The agent shall also be

responsible for those costs even if they win, and the agent is still responsible for the

fee. The Company shall be consulted regarding the defense of the case.

f) If it is determined that the errors in the transaction are a result of non-compliance

of company policies it may be cause for suspension or termination from the

company.

g) In disputes between agents, any written agreement that was created to handle the

dispute will prevail.

8.12 Internet & Social Media Guidelines

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Social media is changing the way we work, offering a new model to engage with customers,

colleagues, and the world at large. We believe this kind of interaction can help you to build

stronger, more successful business relationships. And it's a way for you to take part in global

conversations related to the work we are doing at Fathom Realty. However, we have

established some parameters for how you can use social media in a way that will protect both

yourself and the Firm in the social space.

State laws governing Real Estate Brokerages may vary slightly in language, but all states require

that advertisements for the sale, purchase, exchange, rent or lease of real estate by a licensee

conspicuously indicate that it is an advertisement of a broker or brokerage firm. Business

internet advertising – on social media sites, real estate blogs, wikis, and websites, etc. – must

include the Firm name, clearly revealing your professional real estate affiliation with Fathom

Realty. While the firm name must appear and be conspicuous, Agent's are not permitted to use

the trademarked term "Fathom Realty" or any variation thereof (state corporation titles such as

Fathom Realty Texas) in the TITLE of your blog, Facebook business page, website, online group,

LinkedIn profile, Wikis, or other social media platform. Doing so would create the illusion that

the content and author is representing Fathom Realty in an official capacity. Fathom Realty has

always desired to provide our agents the opportunity to brand themselves and their business,

and these guidelines reinforce our emphasis on this type of branding. While Fathom agents may

choose to highlight their affiliation with Fathom Realty in the content that you share, you are

not permitted to act on behalf of the Firm by creating a profile, page, blog, etc. that creates the

perception that it is operated by the Firm.

The following examples illustrate what IS NOT permitted and what IS permitted.

A Facebook business page, website, online group, LinkedIn profile, Wiki, email address or other

social media platform that IS NOT permitted for an agent to create:

▪Fathom Realty – Sam Smith Team

▪Fathom Realty – Suzy Smith

▪Fathom Realty Suwannee

▪Fathom Realty Wyoming

▪Fathom Realty Fantastic Homes, LLC

▪Fathom Realty Best Agents

▪Fathom Realty Coming Soon

▪Fathom Realty Northeast

▪Email: FathomRealtyNewEngland@gmail.com

Examples of what IS permitted:

▪The Smith Team of Fathom Realty

▪The Smith Team with Fathom Realty

▪Suzy Smith, Broker with Fathom Realty

▪Mary Smith Team with Fathom Realty, Dallas Fort Worth Specialists

▪Email: SuzySellswithFathomRealty@gmail.com

REMEMBER: In the description and branding on your site (etc.) you must include Fathom

Realty. These terms and conditions apply for ALL third-party sites: websites, blogs, email, social

media pages, etc.

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All pre-existing email addresses/sites/profiles/pages/wikis/etc. that are not compliant with

these terms and guidelines, must be modified immediately to ensure the titles and content

comply with these terms OR the site/profile/page/email/wiki/etc. must be removed

immediately.

It is important to note that some state laws and NAR specify additional terms regarding the use

of the term “Realty” in a business title. It is the agent’s responsibility to ensure that all branding

and advertising are within the allowable parameters provided by all governing entities.

The following additional guidelines are provided for participating in social media as an

Independent Contractor with Fathom Realty. These guidelines pertain are for you if you are

creating or contributing to real estate blogs, wikis, social networks, virtual worlds, or any other

kind of social media.

1. Disclose

Your honesty—or dishonesty—will be quickly noticed in the social media environment. Please

represent yourself, Fathom Realty, and your profession as a REALTORTM ethically and with

integrity.

●Be transparent: Use your real name, identify that you work for Fathom Realty, and be

clear about your role.

●Be truthful: If you have a vested interest in something that you are discussing, be the

first to point it out and be specific about what it is. Also, do not use material that is

copyrighted.

●Be yourself: Stick to your area of expertise; write what you know. If you publish to a

website outside Fathom Realty, please use a disclaimer something like this: “The

postings on this site are my own and don't necessarily represent Fathom Realty’s

positions, strategies, or opinions.”

●Be up to date: If you are leaving Fathom Realty, please remember to update your real

estate affiliations and information on social media sites.

2. Protect

Make sure all that transparency doesn’t violate client confidentiality or legal guidelines for

commercial speech—or your own privacy. Remember, if you’re online, you’re on the

record—everything on the Internet is public and searchable. And what you write is ultimately

your responsibility.

●Don't tell secrets: Never reveal confidential information - client or Fathom Realty

corporate. If you’re unsure, check with the Fathom Realty corporate office. Please

respect brand, trademark, copyright, fair use, and trade secrets. If it gives you

pause…pause rather than publish.

●Don't slam the competition (or Fathom Realty): Play nice. Anything you publish must be

true and not misleading, and all claims must be substantiated and approved.

●Don't over share: Be careful out there—once you hit "share," you usually can’t get it

back. Plus being judicious will help make your content more crisp and

audience-relevant.

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3. Use Common Sense

Perception is reality and in online social networks, the lines between public and private,

personal and professional are blurred. Just by identifying yourself as an agent at Fathom Realty,

you are creating perceptions about your expertise and about Fathom Realty. Do us all proud.

Add value: There are millions of words out there—make yours helpful and thought-provoking.

Remember, it’s a conversation, so keep it real. Build community by posting content that invites

responses—then stay engaged. You can also broaden the dialogue by citing others who are

writing about the same topic and allowing your content to be shared.

Keep it cool: There can be a fine line between healthy debate and incendiary reaction. Try to

frame what you write to invite differing points of view without inflaming others. And you don’t

need to respond to every criticism or barb. Be careful and considerate.

Did you screw up? If you make a mistake, admit it. Be upfront and be quick with your

correction. If you're posting to a blog, you may choose to modify an earlier post—just make it

clear that you have done so.

Participation in social computing as a Fathom Realty agent is not a right but an opportunity, so

please treat it seriously and with respect. Failure to abide by these guidelines could put your

affiliation with Fathom Realty at risk.

8.13 Personal Agent Websites & Email

On personal business websites, the following terms apply:

●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.

●It is the Agent’s responsibility to ensure that the listings and marketing information is

updated and managed, especially listings shared with other sites.

●PhotoShop (or image software) may not be used to alter photos on the websites or in

the MLS that would give a deceptive picture of the property. An exception to this policy

is virtually staged images that are permitted by the local MLS & Board when those

images are properly and accurately disclosed in the listing.

●Unauthorized framing of content is a serious concern and Agents must get permission

from the other website before framing the content.

Domain names: The purchase of domain names must abide by the SOP-12-12 of the NAR

Guidelines which states that 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 that violates this standard you MUST notify the brokerage

immediately and take corrective action.

Company Email:

1) 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.

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2) No one shall, from a company email address (i.e., johnsmith@fathomrealty.com) forward any

chain letters, cartoons, etc. or participate in any on-line contest or promotion.

3) Email Confidentiality: Users should be aware that email 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 an email is transmitted it may be altered. Email must

have the correct company information in the signature box.

4) Email messages that related to a real estate transaction need to be saved and we

recommend that they be uploaded to the transaction management system for safe

keeping. It is imperative that ALL emails be saved in case the transaction is ever in

dispute.

8.14 Vacations / Absentee Agents

a) You will want to arrange for a fellow agent to assist you with 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 and will be agreed upon between agents.

b) The details of that written arrangement are entirely between you and your

appointed sales associate. A copy of your arrangement will be given to your Broker.

If no arrangements are made the Company policy will be:

1. Agent B shows homes for Agent A and the client buys a home, Agent

A will share 20% of commission with Agent B.

2. If Agent B lists a home for Agent A, Agent B will receive 20% of listing

commission.

3. It is important to help other associates in order to keep the client

satisfied. Agents are much more willing to help out in a professional

manner if they are being compensated for their time.

The Broker may be available to assist in covering your closings and offer presentations on

listings.

8.15 Affiliate Business Disclosures

a) Per RESPA, we are required to disclose any affiliated business relationships to our

clients when we recommend a service provider to them in which Fathom and/or

owners may benefit financially when a client elects to use their services. If you need

an approved affiliated business disclosure form please contact your District Director.

b) This same disclosure requirement applies to individual agents who recommend a

service provider if they will personally benefit financially when a client elects to use

those services. For example, if an agent is also a licensed loan officer and handles the

loan for the Fathom Realty client, this would be a required disclosure situation.

Agents will be responsible for using an affiliated business disclosure form to properly

disclose all affiliated business relationships.

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8.16 Concealed Weapons

Fathom Realty allows concealed weapons to be carried by agents during the conduct of business

in accordance with local/state laws if the agent is licensed and authorized to carry a weapon by

the applicable governing agency. This policy applies to all persons on the premises, including

employees and licensees of the Company. Local, state, and national laws governing the carrying

and concealment of weapons supercede company policy and agents are to abide by said laws.

Section 9.0

Commission

9.1 Commission Splits

Fathom Realty provides one of the most competitive commission plans in the industry. Each

agent will have their commission split identified in their independent contractor’s agreement

shown on Schedule A.

9.1.1 Team Commission Splits

The Team Leader shall set a commission split with their Team Members in addition to the

company Transaction Fee on all closed and funded transactions. Team Commission Splits are

between the Team Leader and the Team Member but must carry a minimum split of 90/10 (ex.

95/5 split not allowed.) Fathom will disburse the established split at each transaction closing.

In the event that a Team Leader dissolves the Team or leaves the Firm, all Team Members on

that team will default to an Individual Fathom Agent Plan and applicable fees for the

corresponding plan will apply. It is the responsibility of the Agent/former Team Member to

ensure they have a current Individual Plan Schedule A o n file with the Company. In the event

that an Individual plan has not been executed at the time of closing, the default fee schedule for

the individual plan (currently referred to as “The Gold Plan” (subject to change)) will apply.

9.2 Commissions Payable

a) The compensation structure is set forth in the Schedule A (to the Agent

Agreement). Agent’s compensation shall be payable for closed transactions only.

Agents shall not draw or borrow against any compensation payment from the

Broker. The agent authorizes Broker to deduct any outstanding amounts due and

owed by the agent to the Broker or other entity, including but not limited to

participation fees, commission splits, transaction fees, insurance premiums, other

business-related expenses, irrevocable commission disbursement instructions from

a commission advance company, and local, state, and federal child support and/or

tax orders that order the garnishment of wages. When an agent is past due in

amounts owed to Fathom or other entity, all compensation to the agent will be

paid through the Market Center.

b) No Fathom agent is permitted to represent both the buyer and seller on the same

transaction (Dual Agency) without permission on a case-by-case basis from the

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Broker. As a company policy, Fathom Realty Agents are not allowed to represent

both sides in any commercial transactions – sales or leases. Instead of practicing

Dual Agency, the Company recommends the Broker appoint another agent to

represent one of the parties (Designated Dual Agency). The originating agent can

do the bulk of the work and receive the bulk of both sides of the commission with

the newly appointed agent receiving a courtesy fee.

c) Only licensed sales associates can be paid a commission. Any unlicensed assistants

must be paid salaries, or per file by their supporting agent.

d) The Agent is responsible for uploading all transactional paperwork within 48 hours

of execution date. Agent is responsible for submitting the transaction for review

and approval at least 3 to 5 business days prior to closing. Failing to submit

paperwork in accordance with company policy is a violation and may result in a

delay in closing and the processing of commission disbursements, and/or result is

all compensation being paid through the Market Center.

9.3 Adjustment In Commission

In the opinion of the agent, if a concession (lowering of commission or paying for repairs for

example) is required to maintain and assure the transaction closes, said commission will come

from the agent’s portion of the commission. Fathom will apply the company split on the total

commission rate earned and the agent will be solely responsible for the full amount of the

concession on company leads as it differs from the commission listed on the agency agreement

with the client.

9.4 Rental And Leasing Fees

The brokerage fee received by Fathom in connection with the lease or rental of property will be

split with the associate according to their commission plan as shown in the Schedule A to the

Agent Agreement.

9.5 Referral Fees

a) Agent to Agent Referral fees received by Fathom will be paid according to the

referral fee transaction fee annotated on the Schedule A.

b) Referral fees paid out to agents both within and outside of Fathom Realty will

be annotated on the CDA and paid by the closing entity.

c) For referral fees coming through the company, a nominal administrative fee will

be charged to cover the costs the company incurs in processing the checks.

Refer to your Schedule A.

9.6 Bonuses

For all personal leads, any bonuses paid by sellers or builder will be paid to the agent 100% and

are not subject to a company split. Transaction fees or commission splits will not be applied to

income received by the agent above the percentage commission indicated in the MLS.

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9.7 Deferred Commissions

Deferred commissions are not encouraged and require prior Broker approval in all cases. The

decision to defer a commission, in whole or in part, may become a factor in putting a

complicated sale together. For this reason, the listing/selling agents, Broker, 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. A schedule of payments should be

included in that document.

9.8 Right Of Company To Adjust Commissions And/Or Settle Claims, Disputes Or

Litigation with The Public

a) Prior to funding a transaction, all commissions paid or due are subject to

negotiating to settle claims, disputes, or litigation.

b) The Company, at the advice of our Errors and Omissions carrier, 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. Generally, this occurs at the first notice in writing.

9.9 Inter-Company Disputes

a) If two or more sales associates of the Company have a dispute, it is recommended

that the sales associates address the problem in person before getting company

leadership involved.

b) When necessary, all parties to the problem will meet with the Broker and discuss

the possible solutions to the problem. Discussion among staff or with agents who

are not a party to the dispute is inappropriate.

c) The public should not be involved in the event of disputes between sales associates.

the associate may request arbitration/mediation. If the sales associate takes a

separate action outside these policies, that sales associate will be responsible for

any expense incurred.

9.10 Outside Broker Disputes

a) In the event of disputes with other companies, your 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 staff or with agents

who are not a party to the dispute is inappropriate.

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b) With the advent of mediation services, the Company would reserve the option of

requesting mediation instead of the Arbitration Committee of the BOARD of

REALTORS.

9.11 Conducting Business in Multiple Fathom Markets

a) For states in which we have multiple Fathom branch offices, an Agent will be

permitted to conduct up to 3 transactions in another Fathom market (with separate

MLS area) and they will run all of their transactions through their currently assigned

District Director/Managing Broker. The Agent’s current commission plan will apply

to those transactions and the fees paid to their current market center will cover

those transactions as well.

b) Once an Agent/Team goes above 3 transactions, they are required to get a

secondary affiliation with the District Director in the market in which they are

performing more than 3 transactions. With this secondary affiliation, the

Agent/Team Leader will pay the secondary market center all fees owed and sign an

agent agreement/Schedule A for that market. All transaction paperwork will go

through the District Director for the market in which the transaction closes.

c) An Agent/Team can be on different plans in different markets (meaning they can

be on Platinum in their primary market, and Gold in their secondary market).

d) If an Agent starts a Team (hires a Team Member) in another Fathom market to

perform business on their behalf in that market, then the Firm views this as the

team opening an office and the Team Leader would be required to do a secondary

affiliation under the second market center and pay dues to that local market center

in addition to their primary market center. When an office is established, all

transactions will go through the District Director in the market where the

transactions are closing.

NOTE: Most, if not all, states require that a Managing Broker/BIC be a member of the board in

order for an agent to join a local board/MLS. If a Fathom agent requires access to the local MLS

in which their primary BIC is not a member, they will need to establish a secondary affiliation

with the BIC in that market. In this case, the up to 3 transactions policy would still apply.

This policy only applies to an agent that is working deals in the same state. Crossing state

borders requires that agent's license to be held under another Broker or else they can only

receive payment as a referral and cannot actually prepare the paperwork so that business will

have to be referred out.

Section 10.0

Advertising

10.1 Advertising Policy

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Real estate licensees may not advertise or offer to conduct a real estate transaction without first

obtaining a written listing agreement, and in addition, all advertising (including site signs,

internet, etc.) shall clearly identify the real estate company.

The following policies apply to all property listed with this company:

a) This company adheres strictly to the REALTOR® Code of Ethics (REALTORS® ONLY)

regarding advertising. Agents shall be careful at all times to present a true picture in

their advertising and representations to the public.

b) No Associate shall advertise to sell, purchase, exchange, rent or lease a property in a

manner indicating that the advertiser is not engaged in the real estate business.

c) No advertisement by a licensee shall direct responses to only post office box number,

telephone number, and/or street address.

d) Every Associate shall affirmatively and unmistakably indicate in any advertising that he is

a licensed real estate agent.

e) All Associates shall advertise under the Company name offers to purchase, sell, rent, or

lease any property. All advertising must be under the direct supervision of the Broker.

f) No Associate shall post a sign on any property for which he does not have an active

written authorization from the owner.

g) No property will be advertised in any way without a signed written listing agreement on

file with the Broker (District Director). The listing agreement in the hands of the agent is

not sufficient. If a listing agent has a listing he/she wants to advertise, the original or a

fax of the original must be uploaded to the transaction management platform.

h) One party listing agreements (also called "one-shots" or "one-time listings") will not be

discussed, orally or in writing, with any person outside of the company unless a signed

one party listing agreement is obtained.

i) A listing which is due to expire by the publication date of a newspaper or magazine ad

will not be inserted into the ad unless a written extension of the listing is received by the

Broker before the deadline for placing the ad.

j) No price changes or other substantive changes to the listing will be advertised unless a

written change of the price or other appropriate information is received by the Broker

before the deadline for placing the ad.

k) Information on features of the property will not be advertised as "new" unless

substantiated by written receipts or other evidence of payment from the owner

showing the date the work was done. If the verification is received, it will be advertised

with the appropriate date. If the verification is not received, the listing agent must use

other words such as "newer" or "recent" to describe the feature.

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l) Agents should take special care to follow these same rules in the use of "special feature"

sheets. If an agent does not follow this policy regarding any information sheets or other

documentation/advertising the agent prepares, the agent will be solely liable for errors

or omissions that later cause any losses.

m) "For Sale" signs and lock boxes will be removed immediately upon expiration or

withdrawal of a listing.

n) The Company’s policy (NOTE: Also in the REALTOR® Code of Ethics), prior to closing, is

that only the sold sign of the listing broker is allowed on the listing, unless the listing

agent consents otherwise. After the closing has taken place, the cooperating broker

may also post a sold sign. Either the listing broker or the cooperating broker may claim

to have sold the property in advertising and representations to the public.

o) Personal advertising by individual agents is encouraged. The Broker must approve all

personal advertising. The Firm requires that the salesperson include the company name

(the Broker may require additional information such as telephone number, the

salesperson's name and/or telephone number.) This policy covers all types of

salesperson advertising, including personal sign riders, business cards, car signs, homes

magazine ads, classified ads, direct mail solicitations, specialty items (key chains, pens,

pads, etc.), newsletters, farming materials, neighborhood newsletters, billboards, etc.

This list does not include all possible types of salesperson advertising. One possible

problem may exist in the use of a salesperson's first name only in advertising. The

Firm’s policy is that the the salesperson or licensee's "name" means the full name of the

person and not just a first name, initials, or a first name with last initial. Without the full

name, the public cannot identify the person doing the advertising. Use of first names,

initials, or first name with last initial only in salesperson advertising is not allowed.

p) Any advertising containing financial terms of the offering must comply with federal

TruthinLending laws, also known as Regulation Z. Regulation Z requires that all of the

terms of the financing be stated if any of the "triggering terms" are used. "Triggering

terms" are terms such as the amount of down payment ("10% down"), the amount of

any payment ("Only $550 per month"), the period of repayment ("40 year loan

available") or the number of payments ("Only 48 monthly payments”).

If any of these terms are used, the following disclosures are required:

1. Amount or percentage of down payment.

2. Terms of repayment.

3. Annual Percentage Rate, stated and calculated as such.

Use of any interest rate in advertising is not allowed. Only the Annual Percentage Rate, stated

and calculated as such is allowed. Therefore, a property cannot be advertised as having a "7%

assumable VA loan."

Not all terms trigger Regulation Z disclosure. Some examples of terms which can be used

without triggering Regulation Z disclosure are "No down payment", "Financing Available" or

"Special Financing", or "Assumable Loan".

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10.2 Signs

a) Yard signs are an important source of prospects and should be installed (with seller

permission) on all homes listed for sale within 48 hours after the seller signs the

listing agreement. Personal name sign riders are important for directing calls.

b) Sale Pending riders on signs advertise 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) No associate may remove another associate's name rider from a sign.

10.3 Fair Housing Advertising Policy

EQUAL OPPORTUNITY SLOGANS AND LOGOS

Associates shall use the Equal Opportunity slogan or logo in all advertising. Associates shall use

publications which reach large audiences and does not limit to a small select audience.

PROHIBITED ADVERTISING LANGUAGE

Advertising copy used by Associates must describe the property, NOT THE DESIRED BUYER OR

TENANT.

Examples of prohibited advertising language are:

a) Race, color, national origin: Real estate advertisements may not state a

discriminatory preference or limitation on account of race, color, national origin or

any other protected class, and shall not describe the housing, the current or

potential residents, or the neighbors or neighborhood in racial or ethnic terms.

However, Associates may use phrases such as “master bedroom”, “rare find” or

“desirable neighborhood.”

b) Religion: Associates shall not use advertisements which contain an explicit

preference, limitation or discrimination on account of religion. Advertisements

which use the legal name of an entity which contains a religious reference (i.e.,

Sisters of God Catholic Home) or a religious symbol (such as a cross) must contain an

appropriate disclaimer against any religious preference or limitation. Associates may

use descriptions of the property (apartment complex with chapel) or the services

(kosher meals available), and terms (Merry Christmas or Happy Easter) or symbols

(Santa Claus or Easter Bunny) relating to certain religious holidays.

c) Sex: Associates shall not advertise single-family dwellings or separate dwelling units

in multifamily housing in a manner that explicitly indicates a preference, limitation

or discrimination on the basis of sex. Associates may, however, use terms such as

“master bedroom,” “mother-in-law suite” and “bachelor apartment” which describe

a property type.

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d) Handicap: Associates’ real estate advertisements shall not contain exclusions,

limitations or other indications of discrimination based on handicap. Associates may

describe the property (great view, fourth floor walk-up, walk-in closets), the services

or facilities (jogging trails), the neighborhood (walk to the bus stop), the conduct

required of residents (nonsmoking), and accessibility features, such as a wheelchair

ramp.

e) Familial Status: Associates shall not place advertisements that contain limitations on

the number or ages of children or state a preference for adults (unless the property

meets the housing for older persons exemption), couples or singles. Associates may

use descriptions of the property (two bedroom, cozy, family room), services and

facilities (no bicycles allowed) or neighborhoods (quiet streets).

Section 11.0

Personal Assistants

11.1 Introduction

Personal assistants fall under (2) categories: licensed and unlicensed. What services an assistant

can or cannot provide 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.

UNDER NO CIRCUMSTANCES will unlicensed office personnel be allowed to engage in acts for

which a real estate broker or salesman’s license is required (NCGS Section 93A-2).

11.2 Independent Contractor Or Employee?

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.

1. Are you required to comply with instructions on when, where, and how to

perform work?

2. Is training provided?

3. Are your services integrated into the general business operations?

4. Must you render the service personally?

5. Does the person for whom you work hire, supervise, and pay other people

to assist you with work?

6. Are there set work hours?

7. Do you have a continuing relationship for the person for whom you work?

8. Must you devote substantially full time to work?

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9. Is the work performed on the employer’s premises?

10. Must you perform services in a set sequence?

11. Must you submit oral or written reports regularly to the person that you

work for?

12. Are you paid by the hour, week, or month?

13. Are your travel and business expenses paid for?

14. Do you supply the tools, materials, and equipment needed to perform the

work?

15. Can you be discharged at will?

16. Can the you terminate the relationship without incurring liability?

17. Do you invest in facilities used to perform the work, such as an office?

18. Can you realize both profit and loss?

19. Can you work for more than one company at a time?

20. 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.

11.3 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 NAR. Also check with your state’s Real Estate Commission Rules

and Regulations to affirm what a licensed vs. unlicensed assistant can or cannot do.

11.4 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.

1. Agreement for licensed assistant between the licensee and assistant

2. Agreement for unlicensed assistant between the licensee and assistant

3. Agreement between broker and affiliated licensee for the use of a licensed assistant

4. Agreement between broker and affiliated licensee for use of unlicensed assistant

5. Agreement between the broker and the licensed assistant

6. 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

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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

11.5 Duties of an Unlicensed Assistant

1. Deliver documents and pick up keys

2. Answer the telephone and forward calls

3. Secure public information from courthouse, utility companies, 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. Deliver earnest & or option money

16. Order items of routine repair as directed by licensee and/or supervising broker

17. Host or be the Hostess to an open house with limitations listed below

11.6 Duties Prohibited By Unlicensed Assistants

1. Discuss price or square footage or give legal opinions.

2. Show property

3. Answer any questions on listings, title, financing, closing, etc

4. Discuss or explain a contract, agreement, listing or other real estate document

with anyone outside the brokerage company

5. Be paid on the basis of real estate activity, such as a percentage of

commission, or any amount based on listings or sales.

6. Negotiate or agree to any commission, commission split or referral fee on

behalf of a licensee.

7. 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 himself or herself as an agent for a real estate broker or the

owner/seller of a property

10. Negotiate or discuss the terms of a sale

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11. Act as a go-between with a seller and a buyer

12. Answer questions concerning properties listed with the firm, except to

confirm that the property is listed and identify the listing broker or

salesperson.

11.7 Office Policies Pertaining to Assistants

All office policies and rules must apply to personal assistants just as they apply to the licensee.

Section 12.0

Sexual Harassment

12.1 Position Statement

Fathom Realty does not tolerate sexual harassment of any kind. Agents must avoid offensive or

inappropriate behavior at work, and are responsible for assuring that the workplace is free from

sexual harassment at all times. Fathom Realty prohibits un-welcome sexual advances, requests

for sexual acts or favors, with or without accompanying promises, threats, or reciprocal favors or

actions, or other verbal or physical contact of a sexual nature, which creates a hostile or

offensive working environment. Complaints of sexual harassment will be promptly and carefully

investigated, and every Agent is assured that they will be free from any reprisal or retaliation

from filing such complaints. Agents are also assured that the privacy of the complaint and the

person accused of sexual harassment will be kept strictly confidential. Any Agent who has a

compliant of sexual harassment at work by anyone should immediately bring the complaint to

the attention of the Broker. Office investigations will include interview with all relevant persons,

including the complainant, the accused, and other potential witnesses. The Broker will review

findings with the complainant at the conclusion of the investigation. If the investigation reveals

that the complaint appears to be valid, immediate and appropriate corrective action, up to and

including termination, will be taken to stop the harassment and prevent its reoccurrence. If the

validity of the complaint cannot be determined, immediate and appropriate action will be taken

to assure that all the parties are acquainted with this sexual harassment policy and to avoid

sexual harassment in the future. This policy applies to harassment of any kind.

12.2 Definition

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).

12.3 Procedures for Reporting Harassment

If you believe you have been harassed, notify your Broker/District Director or anyone on the

Leadership Team to include the CEO. 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.

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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.

a) 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 supervisor or broker.

b) 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.

c) 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:

d) If sexual harassment DID occur:

1. An appropriate penalty should be imposed that could include

disciplining, suspending, or firing the harasser.

2. Corrective action should be documented and the complainant informed

that action was taken

3. 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

18. If sexual harassment DID NOT occur:

1. 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.

2. The alleged harasser should be told that any retaliation against the

complaining employee may be the basis for possible disciplinary action

against him or her.

3. If a determination is made that the complaint was clearly frivolous the

complainant may face disciplinary action.

BROKER’S NOTE: Equal Employment Opportunity Commission has free literature on preventing

sexual harassment. For free literature on preventing sexual harassment call 800 669 3362. If

you have specific questions, contact EEOC at 800 669 4000 for the office nearest you. A model

employment policy prohibiting sexual harassment can be found at

www.michbar.org/sbm/harass.html



. Be careful to substitute “Michigan language” with your

state law.

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Section 13.0

Arbitration and Ethics Hearings

13.1 Cost

The cost of the arbitration filing fee will be the agent’s responsibility.

13.2 Unpaid Commissions

Any unpaid commissions that are in dispute will be held by the Brokerage Company until an

agreement has been reached.

13.3 Ethics Hearings

If an agent is determined to have practiced unethical actions, this may be grounds for

suspension or termination.

13.4 Costs of the Hearing Results

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.

13.5 Confidentiality

An agent will not discuss any ethics or situation of conflict with an attorney without the Broker

being aware of the situation or conversation.

Section 14.0

Government Regulations to Be Followed

14.1 Fair Housing

Fathom Realty will not tolerate any violations to the Fair Housing Law. Breaking those laws will

be cause for immediate termination of the association.

Agents agree to:

a) Provide service without regard to race, color, religion, national origin, sex, handicap,

or familial status. Many states and localities have additional protected classes.

Make sure you check for those.

b) Keep informed as to changes of the law

c) Be inclusive in all advertising

d) Inform clients of rights with printed materials and conversations

e) Document efforts to provide professional service

f) Refuse to tolerate non-compliance

g) Learn about people who might be considered different by attending classes on

working with multi cultural clients, for example

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h) Take a positive approach to fair housing and follow spirit and letter of the law

i) Be aware of discriminatory lending practices and report them

j) To abide by the attached Fair Housing Laws found in the appendix

14.2 Do-Not-Call Policy

The Agent will be responsible for accessing the Registry.

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, Fathom Realty will establish and adhere to office procedures designed to

demonstrate and ensure a good faith effort to comply with the national do-not-call rules.

By adoption and utilization of these compliance procedures, as well as all other necessary steps,

Fathom Realty will benefit from the “safe harbor” provisions of the national do-not-call rules,

and will therefore not be liable for violations of the rule which are the result of error.

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:

1. All agents, when making a solicitation call, shall comply with the National

do-not-call rules effective October 1, 2003.

2. 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.

3. Agents shall check the record before making any solicitation call.

4. 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.

5. Agents may call any telephone number not listed on the record, but if the

individual called asks to be placed on the “company” do-not-call list, agents shall

honor their request, place their number on the record, and refrain from calling

them in the future.

6. Agents shall allow the phone to ring for 15 seconds or four rings before

disconnecting any unanswered call.

7. Agents shall transmit caller ID information for each call and shall not block the

caller ID information.

8. Agents shall obtain express written permission before sending faxed

advertisements.

9. 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

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who have made an application or “inquiry” with them for a period of 3 months

following their inquiry.

10. 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.

11. 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.

12. 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.

13. 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.

14. Agents shall read the national do-not-call rules once each year.

15. Agents shall comply with all sections and requirements contained in the national

do-not-call rules, including those not listed in these procedures.

16. Agents shall participate in training on these procedures and the national

do-not-call rules when offered by the company.

17. Agents shall make a good faith effort to comply with the national do-not-call

rules at all times.

14.3 RESPA

Real Estate brokers and agents must comply with the Real Estate Settlement Procedures Act,

(RESPA). Violations of RESPA will not be tolerated at Fathom Realty. Anyone found violating the

rules will be terminated. The following actions are allowed:

a) Allows a title agent to provide, during an open house, a modest food tray in

connection with marketing information

b) Allows a home inspection company to sponsor association events when the

representative from the company also attends

c) 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

d) 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

e) 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

f) 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

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14.4 Lead-Based Paint

All Associates are required to fully comply with the requirements of the federal lead paint

disclosure laws in all transactions were the law requires compliance. Penalties available under

the law include triple damages plus attorney fees.

Disclosure Requirements

The federal disclosure rules specifically require that sellers and landlords of most residential

housing built before 1978 must:

1. Disclose the presence of known LEAD-BASED PAINT and LEAD-BASED PAINT hazards

2. Provide buyers and tenants with any available records or reports about any

LEAD-BASED PAINT present in the housing

3. Provide buyers and tenants with a federally-approved lead hazard information

pamphlet

Offers to purchase and leases must contain certain disclosures and acknowledgments.

Sellers must also provide buyers with an opportunity to inspect for LEAD-BASED PAINT. Finally,

real estate agents must ensure compliance with these requirements. The new rules do not

require that any testing be conducted for LEAD-BASED PAINT, nor do they require the removal

of such paint or hazards.

Properties and Transactions Subject to Lead-Based Paint Rules

The new EPA/HUD requirements for the disclosure of LEAD-BASED PAINT apply to all

transactions to sell or rent target housing, subject to certain exceptions. The following

discussion specifies what types of residential properties are covered under the new LEAD-BASED

PAINT rules and those which are not subject to the rules’ requirements.

Target Housing

“Target housing” means any housing constructed prior to 1978, except for housing for the

elderly or persons with disabilities (unless any child who is less than 6 years of age lives in or

expects to live in such housing), and except for any “0-bedroom” dwellings.

Excluded Properties:

1. Housing for the Elderly (No Resident Children Under 6). Housing for the elderly means

retirement communities or similar types of housing designed specifically for

households where at least one person is 62 years of age or older at the time of initial

occupancy.

2. Housing for Persons with Disabilities (No Resident Children Under 6). With both

housing for the elderly and housing for persons with disabilities, the exclusion from

the LEAD-BASED PAINT disclosure rules is lost if children under the age of 6 live there

or are expected to live there. The parties to any sales or lease transaction involving

housing for the elderly or persons with disabilities where children under 6 live or are

expected to live would need to comply with the federal LEAD-BASED PAINT

disclosure rules.

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3. “0-Bedroom” Dwellings. “0-bedroom” dwellings means residential dwelling units

where the living area is not separated from the sleeping area. This includes

efficiencies, studio apartments, lofts, dormitory housing, military barracks and

rentals of individual rooms in residential dwellings.

Transactions Subject to Lead-Based Paint Rules

Both sales and leases (Includes Subleases & Oral Leases). Subleases are included so that the

subtenant or sublessee (i.e., the new tenant) receives the LEAD-BASED PAINT disclosures and

information. Informal rental agreements not involving a written lease, for example, oral leases,

are included despite the difficulties in complying with the rules requirements during a process

handled verbally without written documentation.

Exempted Transactions

1. Foreclosure (sheriff) sales.

2. Leases of Housing Found to be Lead Free. Leasing transactions involving target

housing that has been found to be LEAD-BASED PAINT free by a certified inspector

are excluded from the LEAD-BASED PAINT disclosure rules. “Lead-based paint free

housing” means target housing that has been found to be free of paint or other

surface coatings that contain lead equal to or in excess of 1.0 milligram per square

centimeter or 0.5 percent by weight.

3. Short-Term Leases of 100 Days or Less (No Renewals or Extensions).

4. Lease Renewals if Disclosures Done and No New Information. LEAD-BASED PAINT

disclosures need not be repeated for the renewal or extension of existing leases

where the landlord previously disclosed all information required by the rules and no

new information concerning LEAD-BASED PAINT on the premises has come to the

attention of the landlord. In situations with no formal renewal process involved, i.e.,

a month-to-month holdover after the expiration of a one-year lease term, “renewal”

shall be interpreted to occur at the point where the parties agree to a significant

written change in the terms of the lease such as a rent rate adjustment. Then

disclosure would be required as to any new LEAD-BASED PAINT information not

previously disclosed to the tenant.

5. Purchase, Sale or Servicing of Mortgages.

Agents Covered

“Agent” means agents of sellers, landlords, tenants and buyers except for buyer’s agents who

receive all of their compensation from the buyer.

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Buyer Opportunity to Inspect for Lead-Based Paint

The LEAD-BASED PAINT disclosure rules require that sellers provide buyers with a 10-day

opportunity to conduct an LEAD-BASED PAINT risk assessment or inspection of the target

housing before becoming obligated under the offer to purchase. The length of time may be

shortened or lengthened by mutual agreement of the parties. This requirement does not mean

that the buyer must be permitted to conduct an LEAD-BASED PAINT inspection before signing an

offer to purchase. This requirement may be met by having an LEAD-BASED PAINT inspection

contingency in the offer, similar to the home inspection contingencies typically used in

residential offers. There is no mandatory language or provision for this purpose, so the

contingency may be negotiated by the parties. Thus, the terms and conditions for the conduct

and completion of the LEAD-BASED PAINT inspection or evaluation will be reached by mutual

agreement and not by federal mandate. A lead-based paint inspection contingency which is

included in the LEAD-BASED PAINT disclosure and acknowledgment addendum to the offer is

discussed later. Buyers may choose to waive their opportunity to inspect for LEAD-BASED PAINT.

The rules do not contain any requirement for providing tenants with the opportunity to conduct

an LEAD-BASED PAINT inspection. Sellers may not reject an offer to purchase simply on the basis

that it contains a lead inspection/contingency provision. They may, however, attempt to

negotiate the terms and conditions of the provision.

Timing of Lead-Based Paint Disclosures

The rules only identify the latest point at which full disclosure must occur, that is, before the

buyer or the tenant becomes obligated under the offer to purchase or the lease.

Agent Responsibilities

Each agent involved in a sale or lease transaction shall be responsible for ensuring compliance

with all the requirements imposed by the rules.

To ensure compliance, the agent must:

a) Inform the seller or landlord of his or her duties to disclose known LEAD-BASED

PAINT on the target housing.

b) Furnish LEAD-BASED PAINT records and reports and the EPA-approved lead hazard

information pamphlet to buyers and tenants

c) Advise the seller that he or she must permit the buyer to have a 10-day opportunity

or inspection contingency to conduct an inspection or evaluation of the premises

with respect to LEAD-BASED PAINT

d) The seller and landlord must also be told about his or her duty to certify compliance

with these obligations on and retain a copy of a signed LEAD-BASED PAINT

disclosure and acknowledgment addendum

e) Certain specifically-prescribed LEAD-BASED PAINT “Warning Language” must be

included in sales contracts and leases

f) Ensure compliance with all of these requirements Ensuring compliance can be done

by making sure that the seller or the landlord has per-formed all of these required

activities, or by personally performing these activities on behalf of that party. If the

agent has informed the client about all of his or her obligations under the federal

LEAD-BASED PAINT disclosure rule, the agent shall not be liable for the failure to

disclose LEAD-BASED PAINT to a buyer or tenant if the LEAD-BASED PAINT is known

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by the seller or landlord but not disclosed to the agent. The new LEAD-BASED PAINT

disclosure rules require that sellers and landlords disclose to agents the presence of

any known LEAD-BASED PAINT as well as any additional information about the basis

for the determination that LEAD-BASED PAINT exists on the property, the location of

any LEAD-BASED PAINT on the premises, and the condition of painted surfaces.

Sellers and landlords must also disclose to agents the existence of any available

records or reports pertaining to LEAD-BASED PAINT on the premises. The federal

LEAD-BASED PAINT rules provide that each agent shall ensure compliance with all

the requirements of the rules. “Agent” is defined as any party who enters into a

contract with a seller or landlord for the purpose of selling or leasing target housing.

For real estate agents in sales transactions, this means all listing, selling,

cooperative, and buyer’s agents (except those paid only by the buyer). In rental

transactions, this means property managers, and leasing and rental listing agents.

Listing the Residential Property

The listing agent will NOT complete the property condition disclosure, but will complete a listing

contract which contains a termination of contract date. The following guidelines detail the steps

which must be taken by the listing agent to comply with the federal LEAD-BASED PAINT rules.

1. Determine if the property is target housing.

2. Look for painted surfaces in bad condition while inspecting the property.

3. Advise the seller of his or her obligations under the LEAD-BASED PAINT rules.

4. Ask the seller if he or she has any knowledge of LEAD-BASED PAINT or LEAD-BASED

PAINT hazards on the property.

5. Obtain copies of any available LEAD-BASED PAINT records pertaining to the property.

By the time the offer is accepted, the seller should have made any LEAD-BASED PAINT

disclosures; signed by the seller, buyer, listing agent and cooperating agent, and incorporated

into the offer. In addition, the buyer should have received the LEAD-BASED PAINT information

pamphlet.

14.5 Anti-Trust Policy

This company maintains a strong policy against any anti-trust involvement by the Company, it’s

Agents, and it’s Staff. The Company requires each person associated with the Firm to affirm

completion of anti-trust education and acknowledge his/her understanding of these principles.

There are 2 primary areas of anti-trust policy that all Agents must understand and comply with:

a) PRICE FIXING: Price fixing means any agreement, setting, consent to, suggestion or

implication with a competitor regarding a fee to charge. This includes fees charged to the

public, fees split among brokers and fees paid to agents. "Agreement" can be overt, covert,

express or implied. It is very broad based and can even be suggested or implied by casual

conversation with any competitor.

All Agents are prohibited from discussing with any competitor, including an individual agent, any

aspect of the fees the Company charges or how total fees are split. This Agent determines its

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charges based on the Company's own independent internal analysis of its expenses, its revenue,

its desired profit level and its choice of the type and level of service it desires to provide.

In any discussion with a member of the public about our charges (such as a listing appointment),

the only acceptable answer about why the company charges what it does is the foregoing

explanation. Do not be drawn into a discussion about Company fees as "the standard rate," "the

Board rate," "the typical rate" or the like. If questions arise about other Company's fees, suggest

that the potential client call several competitors and ask about their rates.

b) BOYCOTTING COMPETITION: It is also a violation of federal law to make any

agreement, express or implied, with a competitor to boycott or otherwise not deal with a third

competitor. For example, assume Discount Realty opens up an office. Then assume Bob Broker,

an agent with Big Bucks Broker, and Alice Agent, an agent with Just As Big Broker are having

lunch one day and discuss the competitive impact of Discount Realty. Bob and Alice agree that

Discount is a danger to their large listing portfolios and further agree that individually they will

not show Discount's listings because "Something has got to be done about that price-cutting

monger." This simple agreement with two agents is an illegal boycott. Even if it were implicit

and not overt, it could be construed as an illegal boycott.

Fathom Realty prohibits any agent or staff member from making any agreement or suggestion

with a competitor, including an individual agent, that he/she or the company will not deal with a

third broker or agent, whether it be a listing company, buyer's brokerage, discount broker or any

other broker or agent whatever.

REALTORS® ONLY: Each agent and staff member of this Company is required to view the NAR

videotape on anti-trust, read the NAR guide book "Anti-trust Compliance Program," execute the

acknowledgment in the guide book and participate in training on anti-trust.

SUMMARY OF PRINCIPAL FEDERAL ANTI-TRUST LAWS

The basic statutes making up the body of law known as the anti-trust laws are the Sherman Act,

the Clayton Act, the Robinson-Patman Act, and the Federal Trade Commission Act.

THE SHERMAN ACT - This statute enacted in 1890 was the first modern United States anti-trust

law and remains the cornerstone of all the federal anti-trust statutes. It establishes two broadly

stated principles of anti-trust policy:

1. Section 1 of of the Sherman Act prohibits agreements, combinations or conspiracies

between two or more persons, firms, corporations, or associations which unreasonably restrain

trade.

2. Section 2 of the Act prohibits the monopolization or any attempted monopolization

of any market for a particular product or service. These very general precepts of the Sherman

Act have achieved specific meaning through a process of court interpretation which has

continued for more than 90 years. The selected cases most applicable to real estate brokers and

the real estate industry have been compiled by the National Association of REALTORS® as

Volume 2 of its publication, Anti-trust and Real

Estat



e. It is not necessary to show a written contract to prove a violation of the Act.

“Understandings,” formal or informal, written or oral, express or implied, are enough for a court

or jury to infer that an agreement has been reached. As the Supreme Court said in a leading

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anti-trust case, “A wink of the eye or a shrug of the shoulder is often more important than a

formal handshake.”

THE CLAYTON ACT - The Clayton Act was enacted by Congress in 1914, and was the next major

anti-trust statute. Its approach differs from the Sherman Act in two basic ways:

1. While the Sherman Act applies to restraints of trade that have a present

anti-competitive effect, the Clayton Act represents an effort to stop anti-competitive practices in

the beginning by outlawing future conduct resulting in an unreasonable restrain of trade.

2. While the Sherman Act deals in broad principles, the Clayton Act is concerned with a

limited number of specific subjects such as exclusive bidding arrangements (Section 3);

acquisitions or mergers (Section 7); interlocking boards of directors (Section 8).

THE ROBINSON-PATMAN ACT - The Robinson-Patman Act enacted in 1936, amended the

Clayton Act and deals with discrimination in prices charged various customers. The basic

purpose of the Robinson-Patman Act was to protect small businessmen by putting constraints

on the ability of a large company to command price discounts by use of greater purchasing

power. The Federal Trade Commission is the enforcing agency for this law.

THE FEDERAL TRADE COMMISSION ACT - The Federal Trade Commission Act authorizes the FTC

to enforce these federal laws. Such authority is shared with the Department of Justice. The FTC

also enforces Section 5 of the Federal Trade Commission Act, which prohibits “unfair methods of

competition” and “deceptive practices.” Under this general provision, the FTC has enjoined

potentially anti-competitive conduct before it could ripen into a violation of any of the anti-trust

laws.

In addition to having the authority to seek injunctions, the FTC is authorized to sue in federal

court to recover refunds for consumers who have been injured by violation of an FTC rule or

cease and desist order.

ANTI-TRUST COMPLIANCE

In anti-trust cases, whether criminal prosecutions or civil treble damage suits, proof against the

defendant is most likely to come from the defendant’s own files and records or from statements

made by the defendant or his associates. Thus, an anti-trust compliance program must not only

avoid actual violations of anti-trust laws, but must also avoid creating or permitting the creation

of files, records, documents, statements or conversations which might create an appearance of

violation.

It is impossible, of course, to formulate a set of guidelines to cover all situations at all times, but

insofar as the principles of anti-trust compliance can be stated in specific rules, it would be well

advised to remember the following:

a) DO NOT Discuss Your Business With Competitors - At any time, in any place, or

under any circumstances or have any personal or telephone conversations with competitors

concerning commissions, fees, charges or any other business practices of your real estate

business or those of the Company with which you are associated.

This applies at social gatherings, on the golf course, while hunting, in the bar, cocktail parties,

board functions and at all times and at all places. At Association or Board meetings, confine

discussions to topics of Association or Board business directly involved in the purpose of the

organization and the meeting.

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b) Written Communications Must Be Clear and Explicit - When you discuss a real estate

transaction or the superiority of your business practices over your business competitors, talk to

your Broker or Associates in the Company with which you are associated. Regardless of how

carefully you may phrase your letter or memorandum, things look much different in writing than

they should sound when spoken between knowledgeable people. Of course, financial and

economic data sometimes must be written but in many instances, any information relevant to

business or legal relations can be communicated by talking, and talking only to those who have

legitimate justification for receiving the information you are transmitting. More than one

anti-trust defendant has had his letter, correspondence, memoranda and written notes

admitted in evidence against him for purposes for which the writer never intended. It is amazing

how differently what you wrote sounds when it is read back to you in the grand jury room or

during trial. All correspondence and memoranda must be clear and specific.

c) DO NOT Talk Unless You Know Who You’re Talking To And What You’re

Talking About - In any business, complete candor among trusted business associates is

necessary. It is not necessary, however, to tell everyone your business.

Inform only those who need to know such matters as how and in what manner commission or

fee contracts were negotiated, how much business you’re doing, what business prospects are,

how many and which properties you have sold, and anything else which might be of interest to

someone investigating your business for a reason you know nothing about. If you receive a

telephone call from anyone who refuses to identify himself or who begins what amounts to a

probing cross examination about your business practices, terminate the conversation as quickly

and courteously as possible. In this day of ever improved recording devices for both telephonic

use and miniature recording devices easily concealed in a room or on the person of an

investigator, it is well to make it a rule in discussing business matters to speak as if you were

being recorded. The chances are better than you think they are!

d) DO NOT Deceive Yourself Or Let Anyone Else Deceive You Into Believing

That Any Transgression Of The Anti-trust Laws Has Little Risk Of

Discovery - The federal government possesses extensive investigatory powers, such as grand

juries and civil investigative demands, as well as ingenious and dedicated investigators. Also, in

private litigation, parties have litigation discovery tools to examine corporate or Company

records and documents and to compel testimony.

Even though an anti-trust violator may not keep records, it’s competitors or the injured parties

may. In this age of photocopying, it is difficult to restrict distribution.

Unexpected records such as telephone bills, expense accounts, a secretary’s notes, engagement

calendars or a forgotten written rep may be uncovered. In a prosecution or suit for anti-trust

violations, a party may be faced with surprise witnesses such as former associates and

employees and plea bargainers. Also, an alleged co-conspirator may take advantage of the

anti-trust division’s leniency program and confess, thus perhaps avoiding indictment, a jail

sentence and fines and keeping the tax-deductibility of civil damage payments.

e) DO NOT Use Such Terms As “Please Destroy When Read”, “For Your Eyes

Only”, “No Copies”, Or Similar Terms and Phrases - Experience has demonstrated that even if

no copies are made, the original of such documents eventually end up in somebody’s file. Even

when marked “personal and confidential,” the document is usually retained by the recipient and

eventually filed. When an anti-trust investigation is underway or documents are produced on a

civil investigative demand or in private anti-trust litigation, such terms and phrases are red flags

Fathom Realty Page 72 of 79

for the investigator or opposing counsel. All written documents must comply with the anti-trust

laws whether inspected or discovered and should not indicate or infer an attempt to conceal any

document.

f) DO NOT—At Any Time—Use Any Of The Words And Phrases Which NAR’s

Program For Compliance Designated As “Dangerous” - Since such statements are so improper,

incorrect and dangerous, they need to be emphasized here along with some other words and

phrases.

●“We would like to charge a lower commission, but the board has a rule...”

● “This is the rate that all REALTORS® charge.”

● “The MLS will not accept less than a 120 day listing.”

● “Before you list with XYZ Realty, you should know that nobody is going to work on their

listing.”

● “If John Doe is really professional (or ethical) he would have joined the Board.”

● “The Board requires that all REALTORS® force their sales people to join.”

● “The best way to deal with John Doe is to boycott him” or “we don’t worry about

●John Doe; we just don’t show his listings.”

● “If you valued your services as a professional, you wouldn’t cut your commission.”

● “No board member will accept a listing for less than 90 days.”

● “Let him stay in his own part of town, this is our territory.”

● “If he was really a professional, he wouldn’t use part timers.”

● “X is the going rate in this area.”

● “We have to charge that commission since our rates are set by the your state’s Real

Estate Commission.”

● “The standard commission in this area is X.”

● “When I see that guy’s signs, I just drive the prospect down another street.”

● “We’ve all agreed that any commission below X is unfair.”

● “Something’s got to be done about that company, nobody can charge such a low

commission and make a living.”

● “That price-cutter has no business being a member of the board.”

● “You will not get a lower commission from a Realtor ®.”

●If In Doubt, Consult - No compliance program or manual can spell out all the answers to

questions that may arise. Situations are bound to arise which create doubt. If you do not

have doubts about the legal of any business practice, procedure or activity, consult your

board executive officer, the broker under whose license you work or legal counsel

knowledgeable about anti-trust matters.

●Without Clearance: Don’t Do It - If neither the board executive officer, an executive

officer of your Company nor legal counsel will give clearance to a proposed business

deal or activity with anti-trust implications—don’t do it.

DOCUMENT RETENTION POLICY

Documents should not be kept any longer than reasonably necessary and should be

destroyed when their useful life is over.

CONSEQUENCES AND COSTS OF FAILURE TO COMPLY

If not persuaded by the positive approach to anti-trust compliance alternative practical reasons

must be considered. It will take a considerable expenditure of money, staff-time, and

membership-time to institute and maintain a continuous, on-going anti-trust compliance

Fathom Realty Page 73 of 79

program. To make that judgment, consideration must be given to the awesome consequences

and costs of the failure to carry on a continuous anti-trust compliance program. Those who

choose to ignore the anti-trust laws or fail to educate themselves about such laws and develop a

sensitivity to anti-trust risk very serious consequences and costs for themselves, those with

whom they are associated and their fellow REALTORS®.

a) Criminal Prosecution - The criminal penalties for violating anti-trust laws are severe,

and the present enforcement trend is to prosecute not only the association,

corporation, or firm involved, but also the officers, directors, staff, and employees

personally. A violation of the Sherman Act, for example, is a felony for which any

corporation may be fined up to one million dollars for each offense and an

individual can be fined up to $100,000 and imprisoned for up to three years for each

offense. The fines are not tax deductible. Also if a taxpayer is indicted and

subsequently pleads guilty or nolo contendere or is convicted, payments or

damages in civil treble-damage actions are only one-third deductible. Jail sentences

and probation, which by now are by no means uncommon, can be great personal

tragedies. It is not pleasant trip through the typical arrest, fingerprinting,

photographing and bail processes! Furthermore, convicted felons incur many civil

disadvantages with respect to voting, holding of public office and the like. The

emphasis today in the Justice Department is on stronger and more frequent criminal

enforcement. Nolo contendere



pleas are usually opposed by the government, and

larger fines and sentences are being sought.

b) Private Treble Damage Suits - Anti-trust laws also provide for civil penalties. Persons

or businesses injured by violations of the anti-trust laws may recover three times

the amount of their damages, plus attorney’s fees and all costs of litigation. The

potentially enormous size of these judgments, particularly in a class action suit, can

spell disaster for all real estate brokerage companies and boards of REALTORS®

which are involved.

c) Injunctions - The government and injured persons or businesses may also obtain

injunctions against further anti-trust violations. The severe requirements of these

injunctions will handicap any brokerage business or board of REALTORS® .

d) Consent Decrees - To avoid the shocking expense of defending anti-trust suits, some

defendants elect to “settle out of court” by agreeing to consent decrees. However,

these consent decrees can severely restrict an association’s operations or a

company’s business, and, in some instances, the result is that the officers, directors

and staff of a defendant from day-to-day carry on the operations under peril of

contempt of court citations or threats of civil penalties of up to $10,000 per day.

Conduct and practices which have not been adjudicated to be unlawful are often

prohibited on consent decrees.

e) Time - Anti-trust litigation usually requires years of preparation before trial and

many months of appeals. From the filing of suit to settlement of judgment, on the

average may take from 4 to 5 years. Not only may the defendant board or real

estate Company in an anti-trust case face years of uncertainty, but the valuable time

of REALTORS® and other personnel almost certainly will be spent in long hours of

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preparing testimony, giving depositions, producing documents, tabulating statistics

and performing other necessary preparations for trial. It is almost impossible for

board executives and REALTORS® in anti-trust cases to appreciate the time lost and

the expense involved until they actually experience serious anti-trust litigation.

f) High Cost of Anti-trust Litigation - The cost of defending anti-trust suits, civil or

criminal, is astonishing. It is not at all unusual in criminal anti-trust cases for the cost

of litigation to exceed the fines imposed. Even defendants confident of acquittal are

faced with the prospect of spending shocking amounts of money and countless days

of employee time and effort in establishing their innocence. So called “simple”

anti-trust cases usually cost hundreds of thousands of dollars to defend. It is,

therefore, imperative that REALTORS® involved in the real estate brokerage

business not only comply with the anti-trust laws, but also avoid even the suspicion

of any violations.

g) Adverse Publicity - Whether the anti-trust case is civil or criminal, once the suit is

filed, damages to the reputation and public image of both the local board as well as

the individual defendants and especially the image of Realtor ® as an ethical and

responsible business person are incalculable. Even if the government’s prosecution

or private plaintiff ’s treble damage suit against a Realtor ® is without merit and the

cases are eventually won by the defendants, the bad publicity lingers on.

h) Internal Strife and Tension - No matter how well organized and managed a local

board or Realtor ® Company may be, once an anti-trust investigation is launched or

an anti-trust suit is filed, internal strife and tension among the staff and employees

is unavoidable. Personnel will be kept busy assisting in matters involving the

investigation or in preparing for litigation, and some inevitably will seek to

disassociate themselves from others whom they perceive to have contributed to the

charge. The loss of work efficiency and production resulting from these conflicts is

expensive and can be ruinous to any board or Realtor ® business.

Section 15.0

Risk Reduction

This company advocates and encourages the concept of risk reduction. The strong majority of

claims filed against real estate agents and brokers allege some misrepresentation or fraud. The

trend of the law in the real estate industry is for more and more disclosure. Accordingly, this

company has the following policies regarding risk reduction and disclosure.

COMPLIANCE WITH ALL LAWS, RULES AND REGULATIONS: As an agent of this Company each

person assumes the obligation of strict compliance with all laws, rules and regulations which

govern real estate licensees in your state.

COMPLIANCE WITH THIS POLICY MANUAL: As an agent of this company each person agrees to

comply with all policies as stated in this manual and its additions, changes and amendments as

from time to time published by management of the company. Failure to comply with the

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policies herein subject the agent or staff member to disciplinary action which may include

termination of association with the company.

PHYSICAL CONDITION OF THE PROPERTY: In accord with the REALTOR® Code of Ethics, the

policy of the Company is to disclose to all appropriate parties any known material physical

conditions or defects of a property and any adverse material facts. This applies whether the

Firm is the listing agent or buyer's agent.

Physical conditions on the property may include water in the basement, foundation cracks,

drainage problems, defects in any of the major systems of the property (electrical, plumbing,

heating, cooling), environmental conditions on or near the property, roof problems, etc.

As previously stated, adverse material facts which are known or which the licensee should have

known are required to be disclosed. Adverse material facts are defined as facts related to the

physical condition of the property not reasonably ascertainable or known to a party which affect

the value of the property.

PSYCHOLOGICAL "STIGMAS" ON THE PROPERTY: These include whether homicide or other

felony, or a suicide occurred on the premises, the location of a registered sex offender, or if an

occupant or former occupant of the real property has or had AIDS or any HIV positive condition.

Stigmas include offsite conditions that do not directly impact the property. Some states have

"psychological impact" statutes which provides that no cause of action may be brought against a

real estate agent or broker for failure to disclose to a buyer or other transferee of real property

that the real property was a psychologically impacted real property. Although this statute

protects an agent for failure to make a disclosure, it does not prohibit disclosure. Likewise, the

Code of Ethics does not require disclosure in situations where state law defines these factors as

not material.

The 1988 amendment to the Fair Housing Act includes a person with AIDS, HIV, or other related

illness as a handicapped person. The Act likely prohibits an agent or broker from disclosing that

the occupant or the former occupant of a dwelling suffered or suffers from AIDS. Therefore, it is

the policy of this company that an agent should not make an unsolicited comment that the

current or former occupant has or had AIDS. Further, if the buyer makes an inquiry as to

whether the occupant has AIDS, the agent shall not respond to such a question. The agent

should state to the effect "it is the policy of this company not to answer that type of question

one way or the other since it is not material and may violate the Fair Housing Act."  If the

buyer persists, the agent shall state, "if that information is important to you, you must

determine that information yourself."

Because of the practical problems of the inevitable "disclosure" of these factors (often by the

neighbors), the policy of this company is to discuss with the seller-client the inevitability of this

disclosure and to recommend disclosure of psychological factors other than AIDS, HIV, or related

illnesses that may have an impact on a purchaser's decision to buy. Recent violent crimes or

suicides are specific examples of such events. If, after this discussion, the seller-client instructs

the agent not to disclose these factors, the broker must make a business decision about

whether to offer to list the property.

Fathom Realty Page 76 of 79

DOCUMENTATION OF DISCLOSURE: As is apparent, this company advocates full disclosure in

appropriate circumstances. However, all the disclosure in the world does no good if it cannot be

proven. While it would be ideal to have every single disclosure as to every material item

disclosed to the parties in writing with their acknowledgment of the disclosure, such is not

usually possible.

The company’s preferred policy is to have just such a written disclosure and acknowledgment as

in the case of a Seller Property Disclosure Statement.

Recognizing that this ideal cannot be attained in every situation, the policy of this company is

that the agent should document in his/her own personal notes and files each item that is

disclosed in a transaction.

This simple policy can reduce risk and potentially save many thousands of dollars. It assumes

that the agent has a regular, systematized method of organizing and keeping files. This is vitally

important to a good documentation procedure.

Agents are required to use the transaction management platform as it has been developed to

keep track of details, act as a transaction checklist and risk reduction method.

Disclosure is great, but documentation of the disclosure is the glue that seals the cracks.

USE OF EXPERTS & "RECOMMENDATIONS": This company maintains a strong policy that an

agent not go beyond his/her area of expertise regarding a transaction. The company strongly

recommends that an agent advise the use of an expert in situations where appropriate. For

example, if questions arise with a buyer about the adequacy of the electrical system, the agent

should advise that a building inspector, engineer or licensed electrician be consulted.

However, an equally strong policy exists in NOT recommending any particular inspector,

engineer, electrician or other expert. While advising that AN expert be used is a good risk

reduction technique, the benefits of this technique are lost if a specific expert is recommended.

Recommendation of a specific expert could lead to liability if the expert fails to do his/her job

and the agent was negligent in recommending that person.

The policy of this company is to give the names of three experts in each field whenever asked

for a recommendation. Do not fall into the trap of responding to a customer/client saying

"Yeah, but which one do you really recommend?" The agent should be firm in having the

customer/client make the choice.

Some agents have found a helpful tool in keeping several sample reports from various

building/mechanical inspectors, engineers, roofers, etc. When the customer/client asks for a

recommendation, the agent gives the customer/client the samples and suggests that they

choose the style and cost of the expert which fits their style and needs the best.

A related issue is ordering the report. The policy of this company is that the agent should not

order the report if at all possible. The company recognizes that certain situations require the

agent to place the order, but, in general, the agent should have the customer/client place the

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order. This removes the company and agent from any involvement in the selection process and

reduces the liability of possible negligence in "recommendation" of an expert.

TRAINING: As stated in other parts of this manual, training and education are integral parts of

any risk reduction and professionalism program. All agents are expected to complete the

company's initial training program and are strongly encouraged to take advantage of company,

board and association education programs.

USE OF LEGAL COUNSEL: Whenever an agent believes he/she requires legal assistance, the

Broker should be contacted. The company has access to legal counsel for appropriate legal

questions and problems. The earlier a legal question or problem is brought to the attention of

management, the earlier the problem can be solved. The company's position is that wisely

spent legal fees early in a problem can save many thousands of dollars if a formal complaint or

lawsuit arises.

ERRORS AND OMISSIONS INSURANCE:

Refer to Section 8.9 of this policy manual. The company carries Errors and Omissions insurance

in the amount of $1,000,000 per incident with a deductible of $2,500. All agents and staff of the

company are covered by the policy. The policy is paid by the Company using a portion of the

fees paid by the agent.

Errors and Omissions insurance generally covers the negligent acts of the insured. It does not

cover all possible damages for which the company could be liable. For example, no errors and

Omissions insurance covers punitive damages. For other exceptions, contact the Broker for a

copy of the policy.

Errors and Omissions insurance does cover defense costs, that is, the legal fees involved in

defending a claim against the company or agent. This is very valuable coverage.

The policy of this company is that each agent must notify the Broker as soon as the agent is

aware of a possible claim against the agent/broker. "Possible claim" means the potential of a

disagreement which could lead to a lawsuit against the company or agent. Only in this way can

the company properly invoke the Errors and Omissions coverage, if necessary.

Section 16.0

Association Affiliation

16.1 Code Of Ethics of the National Association of REALTORS

All agents affiliated with Fathom Realty shall read, understand, and adhere to the National

Association of Realtors Code of Ethics.

16.2 MLS Rules and Regulations

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The rules and regulations shall be strictly adhered to and followed. The Agent is responsible for

learning and applying those rules to every transaction. The appropriate forms shall be used

whenever required.

Attendance at the MLS meetings are encouraged.

16.3 Local Association of REALTORS

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 the responsibility of the agent. Those

sales associates not following the MLS rules and regulations or the by-laws of the association are

subject to termination.

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ACKNOWLEDGMENT OF RECEIPT

I acknowledge that I have received a copy of the Fathom Realty Policy Manual. I understand

that nothing contained in the Policy Manual shall be construed as a contract of employment. I

understand that my employment is terminable at will, so that both Fathom Realty and I remain

free to end our work relationship at any time for any reason. I understand that Fathom Realty

reserves the right to amend policies at its discretion at any time.

Fathom Policy And Procedures Manual

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