The real estate market is a rather dynamic one, where sales rise and fall all year round. This makes it quite tricky to forecast and manage cash flow during periods when business is slow. Efficient cash flow management is one thing, but real estate commission advances are another. These advances can significantly lessen the stress of daily expenses, such as sundry bills and overhead charges, thereby making it easier for you to keep your employees happy and at the same time market your business to attract new clients.
What Is A Real Estate Commission Advance?
For realtors, a commission advance is a monetary service that enables a real estate broker or agent to sell a part of their impending commission for a fee. In exchange, they get a part of their commission money prior to closing.
It should be noted that commission advance is not a loan, and therefore doesn’t call for a credit check. In case of a credit check, the majority of commission advance firms carry out a thorough background check, which lets them know if someone has accrued liens or past judgments. For evident reasons, commission advance companies generally steer clear of businesses and individuals with a bad track record of meeting legal obligations.
In simpler words, it is an access to the earned commission before the actual settlement date. Some of the takeaways include:
The Numerous Benefits of Commission Advances for Real Estate Agents
1. Fast Service
Real estate agents can try receiving a fast loan from their local bank, but the reality of the situation may not always make things easy. There is usually a lot of bureaucracy involved when planning to finance a loan, and businesses are often met with the need to complete lengthy paperwork, even after which there is no guarantee that the loan will be approved.
On the other hand, opting for a real estate commission advance means that the application, payment, and approval may all occur within 24 hours. Even if it takes an extra day or two, it is still incredibly quick for what you would have to go through otherwise.
2. Better Cash Flow Management
The commission received by real estate agents not only help pay for their day-to-day expenses, but also for funding subsequent sales. This type of system enables a real estate business to run smoothly, but things can get a little messy at times. What this means is missing out on potential sales, and in the real estate industry, a slow business can be deadly.
However, that problem can be easily overcome by accessing a real estate commission advance. By making use of such resources, you as an agent or broker can obtain new leads and additional deals, thereby ensuring your business’s growth even in tough times. Having this kind of a backup is infinitely better than buckling down due to financial restriction and seeing your business fail.
3. Keeping A Grasp On Debt
When the real estate market is in a slump or experiencing reduced business for whatever reason, it can make it every lead or sale extremely critical to the sustainability of a company and the reputation of real estate agents. The main reason behind this is that there are fixed overheads that still have to be paid, regardless of the financial situation. If little or no money is flowing in, and top of that there is a delay in commissions, then paying the bills and keeping the business running smoothly can be a difficult undertaking.
4. Staying Relevant in a Fast-forwarding Industry
Real estate agents are constantly in the public eye. When you are being scrutinized so closely, you need the best possible means of advertising for your business or services, one that will both attract new clienteles and retain the current ones. In order to do that, you will need a good chunk of money to pay for all the promotional work or you can expect other driven and well-marketed agencies to swoop your clients away from you.
Commissions received by real estate agents usually help cover such costs, still, the slightest delays can be tumultuous. Acquiring a real estate commission advance can help the agent advertise their services properly without having to compromise the functionality of other business operations.
5. Cost Efficiency
All real estate agents have to experience the long downtime before receiving their commission at one point or another. And that is certainly not fun! Every transaction calls for a lot of time and effort, which can get exhausting over time.
Even though there are a lot of agents who have pending commissions, the reality is that many of them cannot afford to function without a quick financial backup. In absence of a real estate commission advance, agents have to go through annoyingly long downtime that cost not only money, but also business opportunities that could have otherwise been availed.
6. Excellent For One-time Expenses
There comes a time when real estate agents may need to take care of an unexpected one-time expense, either personal or business related, that far exceeds their savings (for example, a car repair, home maintenance, etc.). In circumstances like these, a quickly accessible advance on their real estate commissions can help them obtain better access to their funds.
A real estate commission advance is an incredibly helpful way of accessing funds fast and efficiently. Agents or brokers can take one out anytime they want, whether for personal or business reasons. It is a cash flow service that allows you early access to your real estate commission in order to help you focus better on your business operations, along with bringing all the above-mentioned benefits.