CERTIFICATE OF DESIGNATION, PREFERENCES AND
          RIGHTS OF SERIES A JUNIOR PARTICIPATING PREFERRED STOCK

                                       of

                              HomeServices.Com Inc.


           Pursuant to Section 151 of the General Corporation Law
                         of the State of Delaware


           The   undersigned    officers   of    HomeServices.Com    Inc.   (the
 "Corporation"),   a  corporation  organized  and  existing  under  the  General
 Corporation Law of the State of Delaware,  in accordance with the provisions of
 Section 103 thereof, DO HEREBY CERTIFY:

           That pursuant to the authority  conferred upon the Board of Directors
 by the Restated Certificate of Incorporation of the said Corporation,  the said
 Board of  Directors  on October  6,  1999,  adopted  the  following  resolution
 creating a series of shares of Preferred  Stock  designated  as Series A Junior
 Participating Preferred Stock:

           RESOLVED,  that  pursuant  to the  authority  vested  in the Board of
 Directors of this Corporation in accordance with the provisions of its Restated
 Certificate of Incorporation, a series of Preferred Stock of the Corporation be
 and it hereby is created,  and that the  designation and amount thereof and the
 voting  powers,  preferences  and relative,  participating,  optional and other
 special  rights  of  the  shares  of  such  series,  and  the   qualifications,
 limitations or restrictions thereof are as follows:

           Section 1. Designation and Amount. The shares of such series shall be
 designated as "Series A Junior Participating Preferred Stock" and the number of
 shares constituting such series shall be 100,000.
<PAGE>

           Section 2.  Dividends and Distributions.

           (A)  Subject to the prior and  superior  rights of the holders of any
 shares of any series of  Preferred  Stock  ranking  prior and  superior  to the
 shares  of  Series A Junior  Participating  Preferred  Stock  with  respect  to
 dividends,  the  holders of shares of Series A Junior  Participating  Preferred
 Stock shall be entitled  to receive,  when,  as and if declared by the Board of
 Directors out of funds legally available for the purpose,  quarterly  dividends
 payable in cash on the first day of  January,  April,  July and October in each
 year (each such date being referred to herein as a "Quarterly  Dividend Payment
 Date"), commencing on the first Quarterly Dividend Payment Date after the first
 issuance  of a share or  fraction  of a share of Series A Junior  Participating
 Preferred  Stock, in an amount per share (rounded to the nearest cent) equal to
 the  greater  of (a)  $10.00 or (b)  subject to the  provision  for  adjustment
 hereinafter  set forth,  1,000 times the aggregate per share amount of all cash
 dividends,  and 1,000 times the aggregate per share amount (payable in kind) of
 all non-cash dividends or other  distributions other than a dividend payable in
 shares of Common Stock or a  subdivision  of the  outstanding  shares of Common
 Stock (by  reclassification  or otherwise),  declared on the Common Stock,  par
 value  $0.01 per share,  of the  Corporation  (the  "Common  Stock")  since the
 immediately  preceding Quarterly Dividend Payment Date, or, with respect to the
 first Quarterly Dividend Payment Date, since the first issuance of any share or
 fraction of a share of Series A Junior  Participating  Preferred  Stock. In the
 event the  Corporation  shall at any time after  October 14, 1999 (the  "Rights
 Declaration  Date") (i) declare any dividend on Common Stock  payable in shares
 of Common Stock, (ii) subdivide the outstanding  Common Stock, or (iii) combine
 the outstanding Common Stock into a smaller number of shares, then in each such
 case the  amount to which  holders  of shares of Series A Junior  Participating
 Preferred Stock were entitled immediately before such event under clause (b) of
 the  preceding  sentence  shall be  adjusted  by  multiplying  such amount by a
 fraction  the  numerator  of which is the  number of  shares  of  Common  Stock
 outstanding  immediately  after such event and the  denominator of which is the
 number of shares of Common Stock that were outstanding  immediately before such
 event.

           (B) The  Corporation  shall declare a dividend or distribution on the
 Series A Junior  Participating  Preferred  Stock as provided in  Paragraph  (A)
 above  immediately  after it declares a dividend or  distribution on the Common
 Stock (other than a dividend payable in shares of Common Stock); provided that,
 in the event no dividend or distribution shall have been declared on the Common
 Stock during the period  between any  Quarterly  Dividend  Payment Date and the
 next subsequent Quarterly Dividend Payment Date, a dividend of $10.00 per share
 on the Series A Junior  Participating  Preferred  Stock shall  nevertheless  be
 payable on such subsequent Quarterly Dividend Payment Date.
<PAGE>

           (C) Dividends  shall begin to accrue and be cumulative on outstanding
 shares of Series A Junior  Participating  Preferred  Stock  from the  Quarterly
 Dividend Payment Date next preceding the date of issue of such shares of Series
 A Junior Participating Preferred Stock, unless the date of issue of such shares
 is before the record date for the first  Quarterly  Dividend  Payment  Date, in
 which case  dividends  on such  shares  shall  begin to accrue from the date of
 issue of such  shares,  or  unless  the date of issue is a  Quarterly  Dividend
 Payment  Date or is a date  after  the  record  date for the  determination  of
 holders of shares of Series A Junior Participating  Preferred Stock entitled to
 receive a quarterly  dividend and before such Quarterly  Dividend Payment Date,
 in  either  of  which  events  such  dividends  shall  begin to  accrue  and be
 cumulative  from such  Quarterly  Dividend  Payment  Date.  Accrued  but unpaid
 dividends  shall not bear  interest.  Dividends  paid on the shares of Series A
 Junior Participating Preferred Stock in an amount less than the total amount of
 such  dividends  at the  time  accrued  and  payable  on such  shares  shall be
 allocated pro rata on a share-by-share  basis among all such shares at the time
 outstanding. The Board of Directors may fix a record date for the determination
 of holders of shares of Series A Junior Participating  Preferred Stock entitled
 to receive payment of a dividend or distribution declared thereon, which record
 date  shall be no more  than 30 days  before  the date  fixed  for the  payment
 thereof.

           Section 3.  Voting Rights.  The holders of shares of Series A
 Junior Participating Preferred Stock shall have the following voting
 rights:

           (A) Subject to the provision for  adjustment  hereinafter  set forth,
 each share of Series A Junior  Participating  Preferred Stock shall entitle the
 holder  thereof  to  1,000  votes  on all  matters  submitted  to a vote of the
 stockholders of the Corporation. In the event the Corporation shall at any time
 after the Rights  Declaration  Date (i)  declare any  dividend on Common  Stock
 payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock,
 or (iii) combine the outstanding  Common Stock into a smaller number of shares,
 then in each such case the number of votes per share to which holders of shares
 of Series A Junior  Participating  Preferred  Stock were  entitled  immediately
 before such event shall be  adjusted by  multiplying  such number by a fraction
 the  numerator  of which is the  number of shares of Common  Stock  outstanding
 immediately  after  such  event and the  denominator  of which is the number of
 shares of Common Stock that were outstanding immediately before such event.
<PAGE>

           (B) Except as  otherwise  provided  herein or by law,  the holders of
 shares of Series A Junior  Participating  Preferred  Stock and the  holders  of
 shares  of  Common  Stock  shall  vote  together  as one  class on all  matters
 submitted to a vote of stockholders of the Corporation.

           (C) (i) If at any time dividends on any Series A Junior Participating
 Preferred  Stock  shall be in arrears in an amount  equal to six (6)  quarterly
 dividends thereon,  the occurrence of such contingency shall mark the beginning
 of a period  (herein  called a "default  period") which shall extend until such
 time when all accrued and unpaid dividends for all previous  quarterly dividend
 periods and for the current quarterly dividend period on all shares of Series A
 Junior Participating  Preferred Stock then outstanding shall have been declared
 and paid or set apart for payment.  During each default period,  all holders of
 Preferred  Stock  (including  holders  of the  Series  A  Junior  Participating
 Preferred  Stock)  with  dividends  in  arrears  in an amount  equal to six (6)
 quarterly dividends thereon,  voting as a class,  irrespective of series, shall
 have the right to elect two (2) directors.

                (ii) During any default period, such voting right of the holders
 of Series A Junior Participating  Preferred Stock may be exercised initially at
 a special meeting called pursuant to subparagraph (iii) of this Section 3(C) or
 at any annual meeting of  stockholders,  and  thereafter at annual  meetings of
 stockholders,  provided  that  neither  such voting  right nor the right of the
 holders of any other series of Preferred Stock, if any, to increase, in certain
 cases, the authorized number of directors shall be exercised unless the holders
 of ten percent (10%) in number of shares of Preferred Stock  outstanding  shall
 be present  in person or by proxy.  The  absence of a quorum of the  holders of
 Common Stock shall not affect the exercise by the holders of Preferred Stock of
 such voting right. At any meeting at which the holders of Preferred Stock shall
 exercise such voting right initially  during an existing  default period,  they
 shall  have the  right,  voting  as a class,  to elect  directors  to fill such
 vacancies,  if any, in the Board of  Directors  as may then exist up to two (2)
 directors or, if such right is exercised at an annual meeting, to elect two (2)
 directors.  If the number  which may be so elected at any special  meeting does
 not amount to the required  number,  the holders of the  Preferred  Stock shall
 have the right to make such  increase  in the number of  directors  as shall be
 necessary  to permit the  election by them of the  required  number.  After the
 holders of the  Preferred  Stock  shall  have  exercised  their  right to elect
 directors in any default period and during the continuance of such period,  the
 number of directors  shall not be increased or decreased  except by vote of the
 holders of Preferred  Stock as herein provided or pursuant to the rights of any
 equity  securities  ranking  senior to or pari  passu  with the Series A Junior
 Participating Preferred Stock.
<PAGE>

                (iii)  Unless the holders of Preferred  Stock  shall,  during an
 existing  default  period,  have  previously  exercised  their  right  to elect
 directors, the Board of Directors may order, or any stockholder or stockholders
 owning in the  aggregate not less than ten percent (10%) of the total number of
 shares of Preferred Stock outstanding, irrespective of series, may request, the
 calling of a special meeting of the holders of Preferred  Stock,  which meeting
 shall thereupon be called by the President,  a Vice-President  or the Secretary
 of the  Corporation.  Notice of such meeting and of any annual meeting at which
 holders of  Preferred  Stock are  entitled to vote  pursuant to this  Paragraph
 (C)(iii) shall be given to each holder of record of Preferred  Stock by mailing
 a copy of such  notice to him at his last  address  as the same  appears on the
 books of the  Corporation.  Such meeting shall be called for a time not earlier
 than 20 days and not later  than 60 days  after  such  order or  request  or in
 default  of the  calling  of such  meeting  within 60 days  after such order or
 request,  such meeting may be called on similar  notice by any  stockholder  or
 stockholders  owning in the  aggregate  not less than ten percent  (10%) of the
 total  number of shares of Preferred  Stock  outstanding.  Notwithstanding  the
 provisions of this Paragraph (C)(iii),  no such special meeting shall be called
 during the period within 60 days  immediately  preceding the date fixed for the
 next annual meeting of the stockholders.

                (iv) In any default  period,  the holders of Common  Stock,  and
 other classes of stock of the  Corporation if applicable,  shall continue to be
 entitled to elect the whole number of directors  until the holders of Preferred
 Stock shall have exercised  their right to elect two (2) directors  voting as a
 class,  after the  exercise of which right (x) the  directors so elected by the
 holders of  Preferred  Stock shall  continue in office  until their  successors
 shall have been elected by such holders or until the  expiration of the default
 period,  and (y) any vacancy in the Board of Directors  may (except as provided
 in Paragraph  (C)(ii) of this Section 3) be filled by vote of a majority of the
 remaining  directors  theretofore  elected by the holders of the class of stock
 which elected the director whose office shall have become vacant. References in
 this Paragraph (C) to directors elected by the holders of a particular class of
 stock shall include  directors  elected by such  directors to fill vacancies as
 provided in clause (y) of the foregoing sentence.
<PAGE>

                (v) Immediately upon the expiration of a default period, (x) the
 right of the holders of  Preferred  Stock as a class to elect  directors  shall
 cease, (y) the term of any directors  elected by the holders of Preferred Stock
 as a class  shall  terminate,  and (z) the  number of  directors  shall be such
 number as may be provided for in the  certificate of  incorporation  or by-laws
 irrespective  of any  increase  made  pursuant to the  provisions  of Paragraph
 (C)(ii)  of this  Section 3 (such  number  being  subject,  however,  to change
 thereafter in any manner provided by law or in the certificate of incorporation
 or by-laws). Any vacancies in the Board of Directors effected by the provisions
 of clauses (y) and (z) in the preceding sentence may be filled by a majority of
 the remaining directors.

           (D)  Except  as  set  forth  herein,   holders  of  Series  A  Junior
 Participating  Preferred  Stock shall have no special  voting  rights and their
 consent  shall not be required  (except to the extent they are entitled to vote
 with  holders of Common  Stock as set forth  herein)  for taking any  corporate
 action.

           Section 4.  Certain Restrictions.

           (A) Whenever quarterly  dividends or other dividends or distributions
 payable on the Series A Junior  Participating  Preferred  Stock as  provided in
 Section 2 are in arrears, thereafter and until all accrued and unpaid dividends
 and  distributions,  whether  or not  declared,  on  shares  of Series A Junior
 Participating  Preferred  Stock  outstanding  shall have been paid in full, the
 Corporation shall not

                     (i)   declare  or  pay   dividends   on,   make  any  other
      distributions   on,  or  redeem  or  purchase  or  otherwise  acquire  for
      consideration  any shares of stock ranking  junior (either as to dividends
      or upon  liquidation,  dissolution  or winding  up) to the Series A Junior
      Participating Preferred Stock;

                     (ii)  declare  or  pay  dividends  on  or  make  any  other
      distributions  on any shares of stock  ranking  on a parity  (either as to
      dividends or upon liquidation,  dissolution or winding up) with the Series
      A Junior  Participating  Preferred Stock, except dividends paid ratably on
      the  Series A Junior  Participating  Preferred  Stock and all such  parity
      stock on which  dividends  are payable or in arrears in  proportion to the
      total amounts to which the holders of all such shares are then entitled;

                     (iii)   redeem  or  purchase  or   otherwise   acquire  for
      consideration  shares  of any  stock  ranking  on a parity  (either  as to
      dividends or upon liquidation,  dissolution or winding up) with the Series
      A Junior Participating  Preferred Stock, provided that the Corporation may
      at any time  redeem,  purchase  or  otherwise  acquire  shares of any such
      parity  stock in  exchange  for  shares  of any  stock of the  Corporation
      ranking junior (either as to dividends or upon dissolution, liquidation or
      winding up) to the Series A Junior Participating Preferred Stock; or
<PAGE>

                     (iv) purchase or otherwise  acquire for  consideration  any
      shares of Series A Junior Participating  Preferred Stock, or any shares of
      stock ranking on a parity with the Series A Junior Participating Preferred
      Stock,  except in accordance  with a purchase  offer made in writing or by
      publication  (as  determined  by the Board of Directors) to all holders of
      such shares upon such terms as the Board of Directors, after consideration
      of the respective  annual  dividend  rates and other  relative  rights and
      preferences of the respective series and classes,  shall determine in good
      faith will result in fair and  equitable  treatment  among the  respective
      series or classes.

           (B)  The   Corporation   shall  not  permit  any  subsidiary  of  the
 Corporation to purchase or otherwise  acquire for  consideration  any shares of
 stock of the Corporation  unless the Corporation  could, under Paragraph (A) of
 this Section 4,  purchase or otherwise  acquire such shares at such time and in
 such manner.

           Section  5.  Reacquired   Shares.  Any  shares  of  Series  A  Junior
 Participating   Preferred  Stock   purchased  or  otherwise   acquired  by  the
 Corporation in any manner  whatsoever  shall be retired and cancelled  promptly
 after the acquisition  thereof.  All such shares shall upon their  cancellation
 become authorized but unissued shares of Preferred Stock and may be reissued as
 part of a new  series  of  Preferred  Stock  to be  created  by  resolution  or
 resolutions  of  the  Board  of  Directors,   subject  to  the  conditions  and
 restrictions on issuance set forth herein.

           Section  6.  Liquidation,  Dissolution  or  Winding  Up. (A) Upon any
 liquidation  (voluntary  or  otherwise),  dissolution  or  winding  up  of  the
 Corporation,  no  distribution  shall be made to the holders of shares of stock
 ranking  junior  (either as to dividends or upon  liquidation,  dissolution  or
 winding up) to the Series A Junior Participating  Preferred Stock unless, prior
 thereto, the holders of shares of Series A Junior Participating Preferred Stock
 shall  have  received  an  amount  equal  to  $1,000  per  share  of  Series  A
 Participating  Preferred  Stock,  plus an amount  equal to  accrued  and unpaid
 dividends and distributions  thereon,  whether or not declared,  to the date of
 such payment (the "Series A Liquidation Preference").  Following the payment of
 the  full  amount  of  the  Series  A  Liquidation  Preference,  no  additional
 distributions  shall  be made to the  holders  of  shares  of  Series  A Junior
 Participating  Preferred Stock unless,  prior thereto, the holders of shares of
 Common Stock shall have received an amount per share (the "Common  Adjustment")
 equal to the  quotient  obtained  by  dividing  (i) the  Series  A  Liquidation
 Preference  by  (ii)  1,000  (as   appropriately   adjusted  as  set  forth  in
 subparagraph (C) below to reflect such events as stock splits,  stock dividends
 and recapitalizations  with respect to the Common Stock) (such number in clause
 (ii), the "Adjustment Number"). Following the payment of the full amount of the
 Series A  Liquidation  Preference  and the Common  Adjustment in respect of all
 outstanding shares of Series A Junior Participating  Preferred Stock and Common
 Stock,  respectively,  holders of Series A Junior Participating Preferred Stock
 and  holders  of  shares  of Common  Stock  shall  receive  their  ratable  and
 proportionate  share of the remaining  assets to be distributed in the ratio of
 the  Adjustment  Number to 1 with  respect to such  Preferred  Stock and Common
 Stock, on a per share basis, respectively.
<PAGE>

           (B) In the  event,  however,  that  there are not  sufficient  assets
 available to permit payment in full of the Series A Liquidation  Preference and
 the  liquidation  preferences of all other series of preferred  stock,  if any,
 which rank on a parity with the Series A Junior Participating  Preferred Stock,
 then such remaining assets shall be distributed  ratably to the holders of such
 parity shares in proportion to their respective liquidation preferences. In the
 event,  however,  that  there are not  sufficient  assets  available  to permit
 payment in full of the Common  Adjustment,  then such remaining assets shall be
 distributed ratably to the holders of Common Stock.

           (C) In the event the  Corporation  shall at any time after the Rights
 Declaration  Date (i) declare any dividend on Common Stock payable in shares of
 Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
 outstanding  Common  Stock into a smaller  number of shares,  then in each such
 case the  Adjustment  Number in effect  immediately  before such event shall be
 adjusted by multiplying  such Adjustment  Number by a fraction the numerator of
 which is the number of shares of Common  Stock  outstanding  immediately  after
 such event and the denominator of which is the number of shares of Common Stock
 that were outstanding immediately before such event.

           Section 7. Consolidation,  Merger, etc. In case the Corporation shall
 enter into any consolidation, merger, combination or other transaction in which
 the shares of Common  Stock are  exchanged  for or changed  into other stock or
 securities, cash and/or any other property, then in any such case the shares of
 Series A  Junior  Participating  Preferred  Stock  shall  at the  same  time be
 similarly exchanged or changed in an amount per share (subject to the provision
 for adjustment hereinafter set forth) equal to 1,000 times the aggregate amount
 of stock, securities,  cash and/or any other property (payable in kind), as the
 case may be,  into which or for which each share of Common  Stock is changed or
 exchanged.  In the event the  Corporation  shall at any time  after the  Rights
 Declaration  Date (i) declare any dividend on Common Stock payable in shares of
 Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
 outstanding  Common  Stock into a smaller  number of shares,  then in each such
 case the  amount  set  forth in the  preceding  sentence  with  respect  to the
 exchange or change of shares of Series A Junior  Participating  Preferred Stock
 shall be adjusted by  multiplying  such amount by a fraction  the  numerator of
 which is the number of shares of Common  Stock  outstanding  immediately  after
 such event and the denominator of which is the number of shares of Common Stock
 that were outstanding immediately before such event.
<PAGE>

           Section 8.  No Redemption.  The shares of Series A Junior
 Participating Preferred Stock shall not be redeemable.

           Section 9. Ranking. The Series A Junior Participating Preferred Stock
 shall rank junior to all other series of the  Corporation's  Preferred Stock as
 to the payment of dividends and the distribution of assets, unless the terms of
 any such series shall provide otherwise.

           Section 10. Amendment. At any time when any shares of Series A Junior
 Participating Preferred Stock are outstanding, neither the Restated Certificate
 of Incorporation  of the Corporation nor this Certificate of Designation  shall
 be amended in any manner  which  would  materially  alter or change the powers,
 preferences  or special rights of the Series A Junior  Participating  Preferred
 Stock so as to  affect  them  adversely  without  the  affirmative  vote of the
 holders  of a  majority  or more of the  outstanding  shares of Series A Junior
 Participating Preferred Stock, voting separately as a class.

           Section  11.  Fractional  Shares.   Series  A  Junior   Participating
 Preferred  Stock may be issued in fractions of a share which shall  entitle the
 holder,  in proportion to such holder's  fractional  shares, to exercise voting
 rights, receive dividends, participate in distributions and to have the benefit
 of all other  rights of  holders  of  Series A Junior  Participating  Preferred
 Stock.

<PAGE>

           IN WITNESS WHEREOF, HomeServices.Com Inc. has caused this
 Certificate of Designation to be executed in its corporate name this 14th
 day of  October, 1999.

                              HOMESERVICES.COM INC.


                             By:   /s/ Steven A. McArthur
                                   -----------------------------
                               Name:   Steven A. McArthur
                               Title:  Senior Vice President,
                                       General Counsel and
                                       Secretary