EXHIBIT 99.2

INDEPENDENT AUDITORS' REPORT

Officers and Directors
Century 21 of Eastern Pennsylvania, Inc.
King of Prussia, Pennsylvania

We have audited the accompanying balance sheets of CENTURY 21 OF EASTERN
PENNSYLVANIA, INC., (an "S" corporation) as of April 30, 1995 and 1994 and
the related statements of operations and retained earnings, and cash flows
for the years then ended. These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above, present
fairly, in all material respects, the financial position of CENTURY 21 OF
EASTERN PENNSYLVANIA, INC. as of April 30, 1995 and 1994, and the results of
its operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.

As discussed in Note 13 to the financial statements, certain errors
resulting in an overstatement of previously reported expenses as of April 30,
1995 and 1994, were discovered by management of the Company during the
current year. Accordingly, the 1995 and 1994 financial statements have been
restated to correct the error.

WOOLARD, KRAJNIK & COMPANY
Exton, Pennsylvania
June 22, 1995
(Except for Note 13,
as to which the date is
October 12, 1995)

CENTURY 21 OF EASTERN PENNSYLVANIA, INC.
BALANCE SHEETS

OCTOBER 31, APRIL 30, APRIL 30,
1995 1995 1994
------------- ----------- -----------
(UNAUDITED)

ASSETS
Current assets:
Cash, unrestricted (Note 2) ........................... $ 397,329 $ 133,640 $ 121,427
Cash, restricted (Note 2) ............................. 350,868 350,868 105,854
Accounts receivable (Note 5) .......................... 150,523 153,953 179,311
Notes receivable, less allowance for bad debts of
1994--$22,499 (Note 3) ............................... 30,423 -- 3,970
Employee advances ..................................... 3,350 9,700 --
Prepaid expenses (Note 11) ............................ 37,636 48,869 30,591
------------- ----------- -----------
Total current assets ............................... 970,129 697,030 441,153
------------- ----------- -----------
Property, plant and equipment:
Furniture and fixtures ................................ 480,730 475,423 461,016
Transportation equipment .............................. 35,575 35,575 35,575
------------- ----------- -----------
516,305 510,998 496,591
Less accumulated depreciation ...................... 450,971 417,992 389,400
------------- ----------- -----------
Total property, plant and equipment ................ 65,334 93,006 107,191
------------- ----------- -----------
Other assets:
Notes receivable, less allowance for bad debts of
1995--$70,951 (Note 3) ............................... -- 1,466 --
Deposit (Note 8) ...................................... -- 21,632 40,547
Franchise cost, (net of amortization of 1995--$6,534;
1994--$6,190) ........................................ -- -- 344
Other assets .......................................... 2,718 -- --
------------- ----------- -----------
2,718 23,098 40,891
------------- ----------- -----------
$1,038,181 $ 813,134 $ 589,235
============= =========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable ...................................... $ 85,546 $ 119,362 $ 102,623
Pension plan payable (Note 6) ......................... 5,725 11,126 9,236
Advertising fund escrow (Note 2) ...................... 350,868 350,868 105,854
Payroll and other taxes payable ....................... 3,825 1,840 5,523
Accrued compensated absences .......................... 48,028 48,028 38,654
Accrued commissions ................................... 4,375 46,331 47,558
Accrued expenses ...................................... 121,288 32,644 10,000
------------- ----------- -----------
Total current liabilities .......................... 619,655 610,199 319,448
------------- ----------- -----------
Shareholders' equity:
Capital stock, par value $1,149,000 shares
authorized, 10,000 shares issued, 5,100 shares
outstanding ........................................... 10,000 10,000 10,000
Retained earnings ..................................... 526,526 310,935 377,787
Treasury stock, 4,900 shares at cost .................. (118,000) (118,000) (118,000)
------------- ----------- -----------
Total shareholders' equity ......................... 418,526 202,935 269,787
----------- -----------
Total liabilities and shareholders' equity ........ $1,038,181 $ 813,134 $ 589,235
============= =========== ===========

The accompanying notes are an integral part of the financial statements

CENTURY 21 OF EASTERN PENNSYLVANIA, INC.
STATEMENTS OF OPERATIONS AND RETAINED EARNINGS

RESTATED (NOTE 13)
FOR THE SIX MONTHS ENDED --------------------------
---------------------------- YEARS ENDED APRIL 30
OCTOBER 31 OCTOBER 31, --------------------------
1995 1994 1995 1994
------------- ------------- ------------ ------------
(UNAUDITED) (UNAUDITED)

INCOME:
SERVICE FEES .......................... $2,199,492 $2,398,417 $3,953,131 $4,059,538
FRANCHISE FEES ........................ 46,000 78,300 120,353 8,344
TRAINING FEES ......................... 28,605 26,891 55,617 86,253
------------- ------------- ------------ ------------
2,274,097 2,503,608 4,129,101 4,154,135
OPERATING EXPENSES ..................... 1,780,659 1,963,353 3,673,354 3,944,634
------------- ------------- ------------ ------------
INCOME FROM OPERATIONS ................. 493,438 540,255 455,747 209,501
------------- ------------- ------------ ------------
OTHER INCOME:
INTEREST INCOME ....................... 931 2,383 5,451 14,163
MISCELLANEOUS INCOME .................. 1,172 -- 17,617 30
GAIN ON SALE OF ASSET ................. 50 200 1,000 2,761
------------- ------------- ------------ ------------
2,153 2,583 24,068 16,954
------------- ------------- ------------ ------------
INCOME BEFORE TAXES .................... 495,591 542,838 479,815 226,455
INCOME TAXES (NOTE 7)................... -- -- -- --
------------- ------------- ------------ ------------
NET INCOME ............................. 495,591 542,838 479,815 226,455
RETAINED EARNINGS, BEGINNING OF PERIOD 310,935 377,787 377,787 398,963
------------- ------------- ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS .......... (280,000) (326,938) (546,667) (247,631)
RETAINED EARNINGS, END OF PERIOD ...... $ 526,526 $ 593,687 $ 310,935 $ 377,787
============= ============= ============ ============

The accompanying notes are an integral part of these financial statements

CENTURY 21 OF EASTERN PENNSYLVANIA, INC.
STATEMENTS OF CASH FLOWS

RESTATED (NOTE 13)
----------------------------
SIX MONTHS ENDED OCTOBER 31, YEARS ENDED APRIL 30,
---------------------------- ----------------------------
1995 1994 1995 1994
------------- ------------- ------------- -------------
(UNAUDITED) (UNAUDITED)

Cash flows from operating activities:
Cash received from customers............ $ 2,248,570 $ 2,512,234 $ 4,149,014 $ 4,091,190
Interest and dividends received ........ 931 2,383 5,451 14,163
Other operating receipts................ 1,172 -- 17,617 30
Cash paid to suppliers and employees ... (1,701,727) (1,768,957) (3,333,118) (3,748,137)
Interest paid........................... -- -- -- (5)
------------- ------------- ------------- -------------
Net cash provided by operating
activities (Note 12).................... 548,946 745,660 838,964 357,241
------------- ------------- ------------- -------------
Cash flows from investing activities:
Cash payments for the purchase
of property............................ (5,307) (10,770) (36,070) (107,750)
Cash proceeds from the sale of
property................................ 50 200 1,000 3,700
------------- ------------- ------------- -------------
Net cash used by investing activities ... (5,257) (10,570) (35,070) (104,050)
------------- ------------- ------------- -------------
Cash flows from financing activities:
Distributions to shareholders .......... (280,000) (326,931) (546,667) (247,631)
------------- ------------- ------------- -------------
Net cash used by financing activities .. (280,000) (326,931) (546,667) (247,631)
------------- ------------- ------------- -------------
Net increase in cash..................... 263,689 408,159 257,227 5,560
Cash, beginning of periods .............. 484,508 227,281 227,281 221,721
------------- ------------- ------------- -------------
Cash, end of periods .................... $ 748,197 $ 635,440 $ 484,508 $ 227,281
============= ============= ============= =============

The accompanying notes are an integral part of the financial statements.

CENTURY 21 OF EASTERN PENNSYLVANIA, INC.
NOTES TO FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

History and business activity:

CENTURY 21 OF EASTERN PENNSYLVANIA, INC. is a sub-franchiser of "CENTURY
21" franchises in Eastern Pennsylvania and New Castle County, Delaware. For a
fee, it distributes to real estate sales offices in the above areas the right
to use the "CENTURY 21" name and provides them with sales training programs
and other administrative tools.

Allowance for bad debts:

The Company considers accounts receivable to be fully collectible;
however, experience indicates that notes receivable required an allowance for
bad debts account due to the high rate of failure. An analysis of historical
data reveals that approximately 87% of all notes become uncollectible; notes
are generally made up of delinquent service fees. When notes become
uncollectible, they will be removed from the receivable and the related
allowance account.

Cash and cash equivalents:

For the purpose of the statements of cash flows, the Company considers all
securities with a maturity of three months or less to be cash equivalents.

Property and equipment:

Property and equipment are stated at cost. Expenditures for property and
those which substantially increase the useful lives are capitalized.
Maintenance, repairs and minor renewals are expensed as incurred. When assets
are retired or otherwise disposed of, their cost and related accumulated
depreciation are removed from the accounts and resulting gains or losses are
included in income. Depreciation is provided by both the straight line and
accelerated methods over the estimated useful lives of the assets. Estimated
useful lives are as follows:

FURNITURE AND FIXTURES ......... 5-7 YEARS
AUTOMOBILE...................... 5 YEARS

Amortization of franchise costs:

Amortization of franchise costs is provided on the straight line method
over a twenty year period.

Revenue recognition:

Franchise fee revenue is recognized when all material conditions of the
sale have been substantially performed.

2. CASH:

Cash-restricted, in the amount of 1995--$350,868 and 1994--$105,854, is a
trust fund held by the Company on behalf of all member brokers. This trust is
restricted for use in future periods for advertising.

All funds are held in deposit accounts in a Pennsylvania bank, insured up
to $100,000 per bank by the Federal Deposit Insurance Corporation. For 1995,
these accounts exceed this insured limit by $419,997. This represents a
potential loss of $419,997 arising from a concentration of credit risk should
it become necessary for the FDIC to fund depositor accounts due to bank
failure.

CENTURY 21 OF EASTERN PENNSYLVANIA, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

3. NOTES RECEIVABLE:

1995 1994
--------- --------

8% Note due from a Century 21 broker. Beginning May 1, 1994,
monthly payments of $3,000 were due. Principal and accrued
interest are due in full at December 20, 1995. This note is
delinquent................................................... $70,951 $ --

$1,000 Non-interest bearing note due from Century 21
University Realty, Inc. Payments were to be made in ten
installments of $100 starting October, 1985.................. -- 400

8% Note due from Century 21 Colonial Pride. Principal and
accrued interest are due in full on October 1, 1995. This
note was prepaid............................................. -- 24,603

8% Note due from Century 21 Prestige. Principal and accrued
interest were due in full October, 1994. No payments have
been received to date........................................ 1,466 1,466
--------- --------
72,417 26,469
Less current maturities....................................... -- 26,469
--------- --------
$72,417 $ --
========= ========

4. COMMITMENTS:

Franchise commitments:

The Company is obligated under the terms of its franchise agreement to pay
15.00% of the previous month's receipts, from the sale of franchise
agreements and service fees for the sale of real property, to CENTURY 21 Real
Estate Corporation. Additionally, the Company is obligated to spend 10.00% of
its receipts for advertising. The Company also is obligated to credit member
brokers for start-up costs in varying amounts not to exceed $4,500 for
brokers existing as of January 1, 1990.

Lease commitments:

The lease on the Company's main office in King of Prussia, Pennsylvania
which was set to expire March 14, 1995 has been extended to December 31,
1999. The Company leases the premises for an annual rental of $147,660,
payable in monthly installments. Rent will be increased annually, based upon
50% of the increase in the consumer price index.

5. ACCOUNTS RECEIVABLE:

Accounts receivable consists of those funds due from franchise sales and
broker's service fees. Accounts receivable from service fees represents
actual cash received through June 15, 1995. This policy is consistent with
prior years.

6. EMPLOYEE BENEFIT PLANS:

The Company maintains a 401K plan whereby an employee may contribute on a
voluntary basis up to 12.5% of his compensation. The Company is obligated to
match 20% of the employees' contributions starting January 1, 1991. The
Company's contribution for the fiscal year was 1995--$11,126 and
1994--$9,236.

The Company has a defined contribution profit-sharing plan for eligible
employees. Each year the Company determines the amount of its contribution,
if any, to the fund. The contributions are allocated to participating
employees from which benefits are paid. To be eligible to participate in the
plan, an

CENTURY 21 OF EASTERN PENNSYLVANIA, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

6. EMPLOYEE BENEFIT PLANS: (Continued)

employee must have completed one year of service and reached the age of 21.
Voluntary contributions up to 10% of an employee's compensation may be made
by payroll deduction. Vesting in the plan is graduated with full vesting
after seven years of service. The plan also provides for death and disability
provisions. During 1987, the Company suspended funding of the plan. During
1994, the Company reinstated funding to this plan. The Company's
contributions for the year amounted to 1995--$0 and 1994--$25,972.

7. INCOME TAXES:

The Company files its federal income tax return under the provision of an
"S" corporation of the Internal Revenue Code, whereby it pays no federal
income tax. The income or loss is included in the individual income tax
returns of the shareholders. The Company also has obtained "S" status for
Pennsylvania income tax reporting purposes.

8. DEPOSITS/TAXES RECEIVABLE:

Under the 1987 Tax Reform Act, Section 444, the Company elected to retain
its "S" Corporation fiscal year end. The election requires the Company to
maintain a deposit based on the amount of income being deferred and the
length of the deferral period. The deferred income consists of the amount of
income each shareholder will receive, i.e., salary, bonus and share of
Company profits. The deferral period is the number of months between the
Company's fiscal year end and December 31. For 1995 and 1994, a refund is due
in the amount of $18,915 and $19,582, respectively.

9. CONTINGENCIES:

Litigation--Certain claims, suits, and complaints arising in the ordinary
course of business have been filed or are pending against the Company. In the
opinion of counsel and management, most matters are adequately covered by
insurance, or if not so covered, are without merit or are of such kind, or
involve such amounts, as would not have a significant effect on the financial
position or results of operations of the Company if disposed of unfavorably.
One claim involves a plaintiff who named the Company in his suit against an
agent of one of the brokers in the eastern region of Pennsylvania. The
plaintiff's case against the Company depends on his being able to prove an
agency relationship between the real estate agent and the Company. Even
though damages could be substantial, counsel believes the likelihood of an
agency relationship being proved is minimal. The case still has not gone to
trial.

10. CONCENTRATION OF CREDIT RISK:

The Company's receivables are due from real estate brokers located in
eastern Pennsylvania.

11. RELATED PARTIES:

Related party transactions result from payments made to the two
shareholders of the Company. For 1995 and 1994, the Company paid the
shareholders a combined salary, including bonuses of $245,897 and $237,017,
respectively. The Company also paid the shareholders commissions totalling
$296,250 for 1994. Finally, the Company made payments of $24,504 to a
shareholder's life insurance trust for both 1995 and 1994. For both years,
$4,083 was prepaid.

CENTURY 21 OF EASTERN PENNSYLVANIA, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

12. RECONCILIATION OF NET INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES:

SIX MONTHS ENDED OCTOBER 31, YEARS ENDED APRIL 30,
--------------------------- ----------------------
1995 1994 1995 1994
----------- ----------- ---------- ----------
(UNAUDITED) (UNAUDITED)

Net income ................................ $495,591 $542,838 $479,815 $226,455
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization............. 32,979 29,291 50,599 41,889
Bad debts ................................ -- -- 48,452 --
Allowance for bad debts................... -- 22,499 -- 22,499
Gain on disposal of property.............. (50) (200) (1,000) (2,761)
(Increase) decrease in:
Accounts receivable....................... 3,430 (3,744) 25,358 8,857
Notes receivable.......................... (28,957) (10,129) (45,948) 104,376
Employee advance.......................... 6,350 -- (9,700) --
Prepaid expenses.......................... 11,233 (5,483) (18,278) (17,156)
Deposits.................................. 18,914 19,582 18,915 19,582
Increase (decrease) in:
Accounts payable.......................... (33,816) 155,031 16,739 (7,795)
Accrued liabilities....................... 46,688 2,643 30,791 (4,120)
Pension plan payable...................... (5,401) (4,220) 1,890 1,480
Payroll taxes payable..................... 1,985 (2,448) (3,683) 3,849
Advertising fund ......................... -- -- 245,014 (39,914)
----------- ----------- ---------- ----------
Net cash provided by operating activities . $548,946 $745,660 $838,964 $357,241
=========== =========== ========== ==========

13. CORRECTION OF AN ERROR:

Subsequent to the issuance of the financial statements, errors resulting
in an overstatement of commissions and officers salaries were discovered.
Correction of these errors resulted in an increase in net income of
1995--$546,667; 1994--$247,631. These amounts have been reclassified as
distributions to shareholders.

1995 1994
---------- ----------

Commissions .......... $471,667 $247,631
Salaries--officer .... 75,000 --
---------- ----------
$546,667 $247,631
========== ==========

Compensation expense after such restatement is reasonable for the 1 1/2
full time equivalent employee shareholder participating in the operations of
the Company. The distribution to shareholders consists of dividends which
represent a reasonable return on investment over the Company's 20 years of
operations.

14. NOTE TO (UNAUDITED) INTERIM FINANCIAL STATEMENTS

The balance sheet as of October 31, 1995, the statements of operations and
cash flows for the six months ended October 31, 1995 and October 31, 1994 and
the statements of stockholders' equity as of October 31, 1995 are unaudited.
In the opinion of management, all adjustments (which include only normal
recurring adjustments) necessary to present fairly the financial position,
results of operations and changes in cash flows at October 31, 1995 and
October 31, 1994 have been made.

The results of operations for the period ended October 31, 1995 are not
necessarily indicative of the operating results for the full year.

15. SUBSEQUENT EVENT (UNAUDITED)

During December 1995 the company signed a letter of intent to sell the
assets of the Company to HFS Incorporated ("HFS").