Biggest Concerns About Your First Real Estate Commission Advance


Commission advance services have been around for many years.  For any real estate agent working on commission, a commission advance can be a great way to balance out cash flow and reduce stress, especially when you have pending contracts but don’t have any immediate closings.  You may be hesitant about applying for a commission advance if this is your first time.

We have spoken with and listened to the concerns of thousands of real estate agents over the years and we will share our expertise and knowledge on the biggest concerns about commission advances.  Once you have the facts, you will be better able to make an informed decision about choosing a real estate commission advance service provider.

“If I receive a commission advance and the property sale falls through, I’ll lose money.”

Most real estate sales close successfully.  However, if you’ve done a commission advance on a property and the contract does fall through, your commission advance service should be able to substitute with another of your pending deals.

Sometimes, a closing gets pushed to a later date than originally planned.  Ask your commission advance company about any grace period they may offer, which would allow for later-than-expected closings without extra charges.  You should not have to provide your credit card number in case your closing gets delayed or there are unforeseen charges at closing.

“Commission advance services charge extremely high rates and fees.”

While there are certainly fees with any real estate commission advance, those fees can vary widely and are worth researching to save you money in the long run.  You should definitely ask for a quote and check the commission advance rates from the provider before moving forward.  Be sure to ask about any grace period for reimbursing the company, and make sure you are using a company with a good reputation and high approval ratings in Google reviews.

“A commission advance will affect my credit rating.”

A commission advance should have no impact whatsoever on your credit history or rating.  Ask potential commission advance services whether they check your credit rating or base your fees on your credit rating.  By advancing your earnings, you could actually improve your credit score by staying current on your business expenses.

“Only new or struggling real estate agents ever apply for commission advances.”

Most agents who use commission advance services are successful agents in their markets and local communities who have the volume and track record to get approval for their advances.  Typically, commission advance services require a certain volume (including past transactions and current pending contracts) to approve an advance.

Using funds from a commission advance to help grow a real estate business—when needed—is a savvy way to leverage earned but unpaid income in the gap between closings.  Very successful real estate agents use these funds to smooth out the ups and downs of their cash flow and pay their upcoming business expenses or invest in ways to improve their businesses.

“Using a commission advance service is not a good financial decision.”

As a short-term solution for a short-term financial need, it makes good sense to have access to funds to counterbalance the ups and downs of real estate.  When compared to the high interest rates of credit cards and home equity lines and the stack of paperwork it takes to get a small business loan, a commission advance is a smart, quick alternative for real estate agents.

“I don’t want my client or the closing company to know I have applied for a commission advance.”

Your clients should not be aware of your commission advance.  Commission advance applications should be processed quickly, easily, and confidentially in a secure environment.  Your application should be transmitted, approved, and verified without your clients’ knowledge, and your personal information should always be completely private and confidential.

Some commission advance services give you the choice of how your advance will be paid back: either from your company or at the closing table.  This is another question you should ask when researching.

“It takes too long to get the funds from a commission advance.”

Once you are approved, you should expect to receive your advance almost immediately via wire transfer.  Ask the commission advance provider if they fund their advances via wire or by ACH (which could take 1-2 days) to have the funds transfer into your account.

“How do I know if the service I’m getting an advance from is a reputable company?”

There are many ways to verify that you are working with a reputable commission advance company.  Client testimonials and online reviews are a good way to learn about the true pros and cons of any business.

You should ask the advance company how many years they have been in business, which will give you an idea of their longevity.  You can also find out if they are a Better Business Bureau (BBB) Accredited Business, a member of the National Association of Realtors, or an Approved Vendor with any national real estate brands.

There are many companies out there that are start-ups without track records.  As with any online business dealings, you must do some research to find the best, most-trusted, and most qualified companies.



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