Every business, whether it is a start-up or an established brand, witnesses market fluctuations and business instabilities. It impacts the cash-flow. While traditional companies have access to credit sources which help them to function consistently, real estate agents have to work out their way differently. Conventional financing does not do them much good. Due to the income ambiguity of realtors, most financial institutions and banks are reluctant to lend money to them. A commission advance is the only respite here.
Recently, multiple commission advance companies have emerged to cater to realtor fund requirements. Each has its specific terms of service. Since it is not a loan service, realtors often remain unaware of its workings. Here are some of the frequently asked questions that render clarity.
What is a commission advance?
A commission advance enables the brokers and real estate agents to transform their future earnings into upfront cash for a particular charge depending on the closing date. In this type of financial aid, most service providers skip credit check.
Equipped with this financial tool, a realtor can manage the required cash-flow of his/her company to function appropriately. Furthermore, this sets the realtor free of any tension. He/she can now easily clear pending bills, process employee fees and also create a budget for marketing and other promotional activities.
What is the process of getting a commission advance?
After selecting the service provider, you would need to create an account with it to apply for the advance. You should submit all the necessary details about your real estate business and the amount you require.
The service provider will then transfer the same to its underwriting department. They are likely to evaluate all the documents and then ask for your online signature on a few documents. After this, the fund will get transferred to your bank account.
Most realtor commission express services keep realtor data saved so that realtors do not have to file personal details again if there is financing need in the future.
What advantages can you expect from a commission advance?
With a financial tool such as this, realtors get paid the moment a buying contract gets signed. They can also invest and expand their business and not wait till the sales close. Real estate agents can project their income with greater clarity and also make all tax payments on time.
How fast will your advance be processed?
Typically, it should get processed within a business day. Any professional commission advance company will forward the advance contract to a realtor within few hours of receiving their online application. Every company has its specific operation time that you should check to estimate the processing time.
What kinds of deals do most companies provide advance commissions for?
Reputed service providers usually offer advance commissions on commercial lease and sales, residential leases and re-sales, single home sales, and new house and pre/new construction condominium sales.
Can you (realtors) sell a chunk of your commission?
Yes, you can! Most companies calculate their charges on the commission amount. That means if you required $5,000 of a total of $10,000 commission advance, you would get an instant payment from the company for the chunk they are buying, and the remaining amount from the broker during closing.
What are the consequences when a sale falls through?
When you select a decent service provider to manage your commission advance, stress related to sales falling through gets erased. Reputed companies with an in-depth knowledge of this business know that the scope of a failed transaction is just 10%. Just in case that happens, such companies replace the advance amount with a future commission amount.
Is advance commission aimed at average real estate agent?
Regardless of a realtor’s success or rare losses, a commission advance is of immense help to real estate agents. Applying for an advance does not make any realtor appear incompetent or mediocre. It does not indicate that the realtor is in an unfavorable business phase. The real estate industry is dynamic and is laden with challenges, which even makes experienced realtors seek financial aid from time to time.
Is getting a commission advance a private initiative?
Reputation is everything in the business sphere today, even for realtors! Hence, few real estate agents are always anxious, thinking if they apply for an advance, the world or fellow market players will get updated about it. However, that is not the case today. The new age service providers ensure 100% confidentiality.
Most online brands specializing in realtor’s commission advance provide solutions that emphasize client security concerns, indicating that a realtor’s personal data and privacy is never under threat.
The real estate industry has always been a prosperous one. However, just like every business, there are cash crunches that pose a challenge to a realtor’s business and expansion plans. However, equipped with a commission advance from a reputed company, a realtor can ease all worry, bring his/her business back to its seamless state and also experience and manage positive cash flow. If you are a realtor, these pointers can help you decide on your commission advance.