In 2017, 79% home buyers approached real estate agents to find their dream house. 87% of the buyers bought their homes from real estate agents. Over 90% of the sellers listed their properties on the MLS websites. The past year has been an excellent year for most of the real estate agents. There are about 2 million real estate agents in the USA, and that makes the market rather competitive.
Regular commissions are still a distant dream
Even with all the competition, brokers and agents manage a decent commission from their deals on a regular basis. The only problem is the trying wait between the deal and the payment. Both the buying party and the selling party have agents and brokers of their own. The commission needs to go at least four ways in the simplest of all scenarios. This kind of a legal process and financial distribution often prolong the wait. For brokers and agents, this can translate to downtime with no business influx and no promotions, since both require money. In fact, to attend conferences and spruce up open houses, the professionals need good amounts of cash that are wound up in the pending commissions.
A fine solution to make the journey easier
During these wearisome times, the real estate agents and brokers often consider real estate commissions factoring. This is a practice that allows them to sell their asset (pending commission) or a part of it to a commission advance company. Do not be mistaken! This is in no way a simple personal loan or a payday loan. Loans have some hidden clauses, and processing charges. Banks and credit unions run thorough credit score checks of the applicant before processing their application. Loans are an intrinsic process, and the sanctioning takes time.
It is better and smarter than a loan
Getting a commission advance is far easier than getting a loan. That is primarily because you are selling a part of your guaranteed future earning for some immediate cash. The company that is processing the cash advance is likely to charge a flat fee. Sometimes it is as low as 75 cents for $100, and sometimes it can be around 10% of your commission. In any case, you should be able to cash 90% of your pending commission within 24 hours without a credit score check or a scratch on your credit record.
The amount you get as an advance commission depends on the amount of your commission and the number of commission contracts you are cashing. Some companies usually limit the number of such contracts to 2 for the mutual benefit of both parties. You can find companies that pose no upper limit to the advance amount and the number of commission advances you can cash.
Almost about 100,000 brokerage firms are dabbling in real estate as per the current Economic Census. Interestingly, the majority of them have applied for cash advances in the past, and some renowned real estate agents and brokers are enjoying the benefits of commission advances right now!