Policy and Procedures Manual for Franchises

AUG2019

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TABLE OF CONTENTS

Bank Information ……………..……………...…………… 2

Process for New Sellstate Franchise Affiliates with SunTrust ……………..……………...…………… 3

New Agent Form ……………..……………...…………… 4

Salesperson Contract ……………..……………...…………… 5

Agent Asset Development Royalty Sharing Program ……………..……………...…………… 11

Agent Asset Participation Form ……………..……………...…………… 14

Direct Deposit Payroll ……………..……………...…………… 15

Direct Payment ……………..……………...…………… 16

W-9 Form ……………..……………...…………… 17

Agent Termination Form ……………..……………...…………… 18

Accounting Procedures ……………..……………...…………… 19

Description of Corporate Procedures ……………..……………...…………… 20

Commission Cover Sheet ……………..……………...…………… 22

Commission Disbursement Form ……………..……………...…………… 23

Tracker Sales Report ……………..……………...…………… 24

Check Sample ……………..……………...…………… 25

Deposit Slip ……………..……………...…………… 26

HUD Statement ……………..……………...…………… 27

Daily Commission Worksheet ……………..……………...…………… 29

Monthly Debit Report ……………..……………...…………… 30

Debit Report Sample ……………..……………...…………… 31

Monthly AAD Report ……………..……………...…………… 32

Monthly Reporting Form ……………..……………...…………… 33

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Bank Information

In order to comply with Sellstate’s centralized processing systems and expedite procedures, you

will need to open a Business Checking Account by contacting one of our representatives below.

This account will be used for commission related payments only. You will need to have a

second account to be used as your operating account for all other business expenses.

Please set this account up as soon as possible, as this procedure will sometime take up to 30

days to implement.

The following banking representatives are familiar with Sellstate’s Online Treasury

Management procedures. Please do not go into a local branch to open an account because the

account will not be set up correctly.

WELLS FARGO SUNTRUST

Contact: Cherlyne Rowland, Ph: (239) 896-1763 | Fax: (239) 896-1819. Email: cherlyne.rowland@wellsfargo.com

Contact: Sean Murphy Ph: (239) 418-2726 | Ph: (239) 313-1705

Email: sean.murphy2@suntrust.com

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Process for new Sellstate Franchise Affiliates with SunTrust Banks, Inc.

1. New Franchisee client opens account at the branch of their choice

--Ahead of this they should acquire all of the necessary licensing and registrations

needed to open a business account in the state for which they operate. It is preferred

they contact Sean Murphy to coordinate the branch they will be opening their account

at. This way we can advise the branch of the planned visit to open the account, arrange

introductions and handoffs. We can better maintain contact to capture the new account

information for further agreements to be drafted in a timely manner.

2. The branch sends Sean the new account numbers to be added per the Sellstate

Corporate model for drafting accounts of the franchisees.

3. 3. We (SunTrust) complete the SunView and OCM affiliate agreement forms for

execution.

4. We (SunTrust) send the forms to Sellstate corporate

a. Sellstate Corporate collects the signatures from the franchisee and the also

complete corporate signatures.

5. Sellstate Sends Sean completed SunView and OCM affiliate agreement for

implementation.

6. Process complete for Sellstate Corporate and the new franchisee. Awaiting

implementation of the OCM and SunView (OTM) service.

Additional note: The franchisee should clearly designate which account is to be the commission

account, which is the one set up for OCM and SunView service. This is particularly important

should the new franchisee elect to have both operating and commission accounts opened at

SunTrust. This can be done via a nickname on the account, and/or instruct the branch which

account is which.

Sean Murphy, Commercial Relationship Manager – Southwest Florida

Office: 239.418.2726, Mobile: 239.313.9387, Email: sean.murphy2@suntrust.com

12751 New Brittany Blvd 2nd Floor Fort Myers FL 33907

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Accounting Procedures

Sellstate Realty Systems Network, Inc. disburses commissions for all Sellstate franchises. An

individual franchise may not pay their agent directly unless paid at title. Sellstate Realty

Systems Network, Inc. produces all of the 1099’s for their franchises, so all income must flow

through our system in order for the 1099’s to reflect the correct agent income.

If you deposit a commission by the respective bank’s cut off deadline, the commission

disbursement must be emailed to Sellstate Realty Systems Network, Inc. the following business

day by 11:00 am in your respective time zone. The funds will be disbursed to the agent’s

account, as long as the funds are available in the broker’s account. The method of payment is

via ACH (Automated Clearing House) and not via Wire Transfer. This means that the funds

usually will be available to the agent the business day following the date it is disbursed by

Sellstate.

Please note that business days do not include Saturday, Sunday or Federal Bank Holidays.

The information required by our accounting department to process your commission is as

follows:

1. Commission Cover Sheet.

2. Completed Tracker Form

3. Copy of Commission Check

4. Copy of Deposit Slip and Receipt from Bank

5. Fully Executed Property HUD-1 Statement.

6. Completed Commission Disbursement

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Description of Corporate Procedures

There are five fees which are paid by the franchisee to Sellstate Realty Systems Network, Inc.

(Corporate franchisor). These fees are owed by the individual franchisee to Corporate.

Corporate will attempt to collect them directly from the agent on behalf of the franchisee.

However, it is the responsibility of the franchisee to pay Corporate regardless if payment is

collected from the agents. Your individual salesperson contract should detail the fees that each

salesperson will owe.

These five fees owed by the franchisee are collected from the agents as follows:

1. Annual Fee

The franchisee must pay an annual fee for each agent who is licensed to the franchise.

The fee is due on June 1st of each year, and is not pro rated. The fee is withdrawn from

the accounts of each agent. If the fee cannot be withdrawn from the agent’s account,

then the franchise is responsible to pay the fee. The amount of the fee owed by the

franchisee to Corporate is stated in schedule A of the franchise agreement.

2. Monthly Licensing Fee

The franchisee must pay a monthly licensing fee for each agent licensed to the

franchise. They must ensure that all agent licenses are kept current with the state

licensing board. The franchisee is responsible for completing the “Sellstate Monthly

Debit Report” each month on the 25th of the month, for the following month. For

example, on May 25th you owe the licensing report for June. The fees are withdrawn

from the individual agent’s accounts on the 1st business day of each month. If the agent

cannot pay the fee, the franchisee is responsible for paying the fee in their behalf.

3. Corporate Strategic Development Fund

This fee is equal to 2% of all commissions earned by the agent on a real estate sale. The

fee is collected from the agent when a Commission Disbursement Form is submitted by

the franchisee to pay the agent. This was formerly known as the National Marketing

Fund.

4. Agent Asset Development Fund (also known as AAD)

The Corporate Accounting Department deducts 5% from the agent’s gross commission

and deposits the amount into a designated bank account for the AAD program. An

administrative fee of $10.00 per transaction is deducted from the amount collected, and

then the remaining amount is paid to the sponsoring agent on the 15th of the month, or

the next available business day, following the calendar month. These payments are

listed on the Commission Disbursement Form. Please review the AAD Program guide for

more specific information.

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5. Transactional Fee

The Corporate Accounting Department deducts a flat fee from each real estate

transaction that an agent closes. The fee is based on the amount of the commission

earned.

6. Broker’s Fees

Many brokers also charge their agents additional fees. If the franchisee wishes for the

accounting department to collect those fees in their behalf, then the fees will be listed

on the Commission Disbursement Form and those monies will remain in the broker’s

account.

7. Computer Fees

A fee for being part of the Sellstate online computer system is debited from the

Franchisee’s account on the first day of each month.

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Monthly Debit Report

Once a month every franchise is required to send in their Licensing Report. The report is due

on the 25th of the month prior to the reporting month. For example the report for November

would be due on October 25th.

This report is to include every person who is licensed to the franchise. Sellstate will then

withdraw the fees from your agent’s accounts and will remit the fees due to Corporate and the

fees due to the Franchise. In the world of banking, the fees are “debited” from the agents,

therefore the knick name of the “Debit Report”.

This will give you the opportunity to collect the fees each agent is contractually obligated to pay

the franchise. You will also be able to collect any monies outstanding. If the banking

information is not provided for an agent, then it will be the responsibly of the franchise to

collect what is due.

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