Real estate agents understand the importance of receiving their commission payments as soon as they become due. This allows you to reinvest it back into your business or pay bills quickly. Real estate agents typically have many expenses related to running their business such as rent, licensing fees, franchise fees, transportation costs and marketing expenses that must be covered on a daily basis; yet sometimes transactions take between thirty days to six months before closing – this can leave agents short on cash when it comes time for sales transactions to close.
One way a realtor can gain immediate access to their commission is with a commission advance. These advances do not represent loans but rather constitute agreements between brokers or agents to sell part of their pending commission at a discounted rate to third-party providers who then collect it at closing from both themselves and from their broker/agents.
Commission Advances are an alternative financing solution to traditional loans, which may be difficult for new or struggling agents to qualify for. Their underwriting process is much easier – no credit check or collateral are needed, making this the perfect financing option for Realtors with low credit scores or no assets to secure loans.
Commission advances can be used by Realtors to cover a range of expenses they face such as rent, advertising and marketing costs, franchise fees and staffing and equipment expenses. When looking for commission advances it is important that they do their research and find a company offering competitive rates as well as understanding how the commission advance works so as not to incur hidden fees or charges in the form of hidden charges or fees.
Other fees related to real estate transactions could also include buyer’s agent fees, title insurance premiums and closing costs; all these additional expenses can quickly add up, which is one reason some agents use commission advances as a source of supplement income.
Cost and terms of commission advances vary by company; however, many are offering discounts or promotions in an effort to attract new customers. For example, eCommission currently offers its first-time clients 10 percent off the normal commission advance fee, providing significant savings especially for Realtors who require immediate cash infusion to continue operations.
When searching for a real estate commission advance provider, it is essential that they offer direct funding. This will eliminate unnecessary middleman expenses while guaranteeing the lowest rate available. In addition, most companies provide confidentiality policies to keep transactions private so only you and the commission advance company are aware of what’s happening with your transaction.