It will not be an exaggeration to say that all real estate agents are eager to avail commission advance. Since the arrangement neither does discriminate brokers nor involve any credit checks, it is the most sought after and perhaps the only financing option available to real estate brokers. When traditional financing methods are not available for the real estate broking business, commission advance is the only financial lifeline that brokers enjoy. Unlike any other business that has easy access to business financing of all kinds, real estate brokers have to depend on their abilities to generate funds for business. Therefore, the more they earn better would be the financial strength of the business. However, things are not easy on the ground because of the volatility of the real estate market.
The volatile nature of the real estate market that goes through recurrent periods of ebb and tides is the primary reason that discourages traditional funding sources to invest money in real estate. There is no certainty how the market will behave in future, and it is not possible to make any business forecast. Due to the fluctuations of the market, the fortune of brokers keeps fluctuating too, and they face the problem of unstable income. What they earn today is no indication of what they would earn tomorrow and beyond. The uncertainties increase the risks of investors who prefer not to offer any financial assistance to real estate brokers. Therefore, brokers have to depend on their own money for recycling it back into the business. Again, that is not easy as commissions earning has a waiting period of few months to cash out.
Prompt commission payment
Every real estate broker dreams of receiving commission payments almost instantly like it happens in any trading business. Unfortunately, the norms of the industry for commission payment that dates back many years do not allow it. Commission earning from signing a deal for selling or buying a property that the broker facilitates only confirms the earning but the cash reaches them after the deal matures and the property changes hands. On an average, property transaction could take about three months’ time, but it is difficult to use it as a yardstick because delays can happen for various reasons. After all, the deal has to pass through a maze of legal and commercial processes that takes time.
Now it is possible to cut down the delay in commission cash out drastically, and brokers can avail the cash as soon as they ink a deal without having to wait for closing the deal. The dream of brokers has now come true, thanks to the advance commission for realtors.
A lifeline for brokers
It is your money, and you can take it as soon as you earn it – this is the underlying message of the arrangement of commission advance that has given real estate brokers a new lease of life. They are now capable of making their business grow faster by pumping in quick money that is necessary for aggressive marketing and advertising for promoting their business. No matter how hard you might work and be crafty in devising strategies for marketing, lack of cash can suffocate the promotional activities that stunt the business growth. Too much of strain on cash flow can even make it extremely difficult to sustain the business, forget about growth. The advance commission is truly a lifeline for brokers that have become a game changer for the real estate business.
It is your business, and you are the boss
When you seek alternative methods of business funding, there is always a risk of losing your control over the business. It might happen that the investor would take an interest in your business only if you allow them to take its control by diluting your hold on it. This often happens when seeking venture capital for business. Now that you are using your own money, you are the king of all you survey with none to stake a claim for controlling your business. The business remains yours very much, and you are its undisputed king. Commission advance has made brokers proud because they are the masters of their fortune.
No worries about debts
The method of funding through commission advance is not unique but it provides brokers the opportunity to keep away from debts. As the availability of funds depends on the number of deals that the broker executes, how much finance would be available depends on the individual capabilities of brokers. By using their own money, brokers do not have to bear high interests that come with loans. The small fee that they have to pay to the company providing advance commission is too little as compared to the interest charged by lenders.
The short-term arrangement perfectly suits the needs of brokers who have now become more self-reliant in financing their business.