If you’re a real estate agent, you may have considered a commission advance in the past but have reservations about how it all works. Here’s some general information about real estate commission advances:
Who is a real estate commission advance for?
A commission advance is for any real estate agent looking to avoid waiting for their commission payment at close and who wants to improve their cash flow situation. Typically, real estate agents who utilize a commission advance service simply feel restricted by delays in revenue and wish to even out their cash flow in order to grow their business and sell more houses.
Why do real estate agents seek an advance on their commission?
Commission advances can bring real estate agents several benefits. As with any 100% commission-based compensation, it can be frustrating to wait days, weeks or months to receive the commission from a sale. With the up and downs of real estate transactions, not knowing when the next closing will occur, the uncertainty means that it’s difficult to properly plan and forecast business.
Being able to receive a portion of your commission in advance means that your focus remains on closing the next sale, rather than on your cash flow. Commission advances can give you the confidence to take the steps you need to keep growing your business. Whether that’s investing in additional staffing, a new website, online advertising, or a real estate class, an advance on your upcoming commission can provide you with peace of mind.
Do I need to get a commission advance on my entire commission?
It’s up to you. Most commission advance service providers will give you a choice to work with your entire net commission (after splits and fees to your office have been accounted for) or just a portion of your commission. Ideally, you will have a few closings coming up in the next month or so and you just need to do a partial advance on one of your deals in order to bridge the gap to your next closing.
How does a commission advance work?
Once you have a pending contract, a commission advance is simply receiving a portion of your commission upfront as you prepare and wait for your closing. The commission advance service provider will purchase your pending commission and then upon approval immediately send you the funds.
If you’d like to learn more about real estate commission advances, please call RealCommissions at 888-610-0003 or email [email protected].