Commission advance has been around for many years and is a popular way for real estate businesses to maintain a healthy cash flow.
Despite this, there’s still a lot of confusion around commission advances. Many real estate professionals still aren’t quite sure what they are, who gets them, why they should get them and what the catch is.
This uncertainty, understandably, makes many people skeptical or wary. Buy when people are misinformed, it can be easy to make assumptions that simply aren’t true. In this article, we’ll separate fact from fiction, so you can make an informed decision about using an advance commission service.
FICTION: Only struggling real estate agents will apply for a commission advance.
FACT: This assumption couldn’t be further from the truth. The majority of our clients are amongst the most successful agents in their market and local area. It’s the use of commission advances that helps to make them so successful. By using our services, they can free up their cash flow and have money to spend on their businesses and important expenses, when their competitors don’t.
FICTION: Using an advance commission service is a bad financial decision.
FACT: Regardless of the nature of your business, it makes good financial sense to have access to a line of credit to counter balance the natural ups and downs that most businesses face. These businesses tend to rely on banks and traditional lenders for this credit.
Real estate agencies, however, sometimes have trouble accessing lines of credit from banks because of the uncertainty of their income. Fortunately for them, they are the only industry eligible for a commission advance; an alternative line of credit that has been specifically designed for the industry. Agents are generally financially savvy and know a good financial decision when they see one. A commission advance is definitely not a bad decision.
FICTION: My clients will know I have applied for a commission advance.
FACT: Your clients will have no idea about your commission advance, unless you choose to tell them. Commission advance applications are processed very quickly and easily, and are done completely confidentially online. Your application is processed, approved and verified without your clients ever knowing, and your application is completely private.
FICTION: A commission advance will affect my credit history rating.
FACT: A commission advance has no impact at all on your credit history whatsoever. Why? Because a commission advance is not a loan. It doesn’t involve your personal credit and there are no credit checks needed for your application to be approved.
FICTION: A commission advance charges huge fees.
FACT: While there are fees associated with a commission advance, you will have fees with any line of credit you apply for. The beauty of a commission advance compared with any other kind of credit is that it is deposited into your bank account within a few hours of being approved. The alternatives (i.e. running into financial trouble) could prove to be far more costly in the long run than a simple commission advance application fee.
FICTION: If I apply for an advance and the property sale falls through, I’ll lose money.
FACT: The majority of sales always close successfully. In the rare event that a sale falls through, we make it as easy as possible for you. There are no out-of-pocket fees associated with receiving an advance, even if the transaction is cancelled. Your only expense is the interest accrued during the time your advance is outstanding, which can be repaid through future commission advances.
A commission advance is a great option for an agency to stay on top of an important expense or take advantage of a new opportunity. If you’ve never used a commission advance service and are unsure about whether it’s right for you, please call us on 1800 003 569.