# How much of my commission can I use for an advance?

Here are a few pointers and things to consider to correctly calculate how much of an agent’s commission can be used for a commission advance.

When considering using a real estate commission advance service, one of the first things agents must do is calculate their gross and then their net commission to see how much is eligible to use for an advance. An easy way to remember what part of the commission qualifies for an advance is that an agent can only use what would normally be paid to the agent at the closing after any splits, fees, and deductions that are due to the office.

Let’s use a typical example to illustrate the point. First, we always start with the gross commission:

•      \$300,000 sale price of home x 3% commission = \$9,000 gross commission.

Now we will assume the agent is on an 80/20 split with the office:

•      \$9,000 x 80% = \$7,200 commission to the agent after the split with the office.

Then take a moment to think if there are any other deductions that must be subtracted to arrive at the net commission:

•      E & O fees?     Outside referral?     MLS fees?     Office bill?    Transaction coordinator fee?

After all deductions are calculated you will arrive at the net commission. Only the agent’s net commission can be used when applying for a commission advance. Some real estate offices have a real estate commission calculator worksheet that computes the agent’s estimated net commission for a transaction. If not, you may want to prepare your own commission calculator worksheet.

A few other important points to consider:

1. Some commission advance companies will only allow agents to use a portion of their commissions towards an advance. RealCommissions allows agents to use up to their entire net commission on an application for a commission advance.
2. If an agent has a pending contract with a large net commission and only needs part of the commission to bridge the gap until closing, the agent can apply for a partial amount and only pay a fee for the amount that’s needed.
3. Some real estate offices have in-house limitations on how much of an agent’s net commission may be used when applying for a commission advance. Having worked with major real estate firms from coast to coast, RealCommissions has the knowledge and experience to guide agents through any requirements their offices may have in place.

We hope this overview offers good guidance for calculating how much of an agent’s net commission can be used towards a commission advance. The best way to get an exact answer about how much an agent can receive on an advance and what it will cost is to request a RealQuick Quote from RealCommissions.

By answering a few simple questions, such as the net commission, the scheduled close date and how much the agent would like to receive, RealCommissions will quickly reply with a no-cost, no-obligation quote and links to the secure, online application.