Commission Advance Myths vs. Facts
Advance commissions or commission advances in real estate businesses refer to a financial facility available to real estate agents and brokers to further their business. A broker or agent secures such advance by selling a portion of his/her future commission for a stipulated fee. The agent approaches a commission advance service provider to obtain such an advance.
Advance commissions aim to enable real estate agents and brokers have access to cash flow for their business growth. With a predictable cash inflow such as that offered by such advances, agents and brokers can fulfill business expenses promptly without compromising business growth.
However, the very purpose of advance commissions is defeated due to several misconceptions and myths surrounding the concept. A clear understanding of this efficient financial method can help real estate professionals make the most of it.
Most of these myths are a result of the circulation of baseless information. Here, we shatter such prevailing myths on commission advances with authentic information:
Myth: A Real Estate Agent Seeking Commission Advance is in a Financial Crunch
Fact: It may seem logical to think that successful money-making agents should not need an advance. So, if they are seeking an advance, they are perhaps not so successful.
The fact is quite different!
It should be noted that the purpose of commission advances is to ensure a steady cash flow so that you are able to grow your business and pay your bills on time.
Any business outside of the real estate, even successful ones at that, may find it necessary to avail conventional credit lines such as bank loans now and then, to keep its company running and growing.
Availing an advance on real estate commission is similar. Many real estate agents, including those that are successful, seek advance commissions more than once in a year to ensure steady cash flow in their business.
Myth: An Advance Commission Damages an Agent’s Credit Score
Fact: An advance commission may hurt an agent’s credit score if it were a loan. But it is not, which means an advance has no impact on an agent’s credit score. In reality, an advance on commission can improve an agent’s credit score. This is because advance commissions keep cash flowing, which enables agents to make timely payments.
Commission advance financial system does not necessitate credit checks. Reputed service providers do not share your credit information with anyone, including credit bureaus. So, the risk of your credit score getting hurt is zero.
Myth: Advance Commission Fees are Exorbitant
Fact: Fees for commission advances can be expensive, but not exorbitant. The fee for availing the advance depends on the agent has requested and the amount of time for repayment.
The expensive fee is reasonable, given the convenience of the commission system and the benefits of the advance for your business.
Commission advance system is fast. The process of funding an agent is simple, easy and quick. The agent gets access to required funds within a time that just cannot be imagined getting realized with conventional credit lines such as banks.
Besides, the credit amount offered is large enough to cover the expenses of a real estate business. Credit offered by conventional lending institutions can be constricting for real estate professionals as there is a credit cap, and the credit provided rarely covers expenses inherent to a real estate business.
Also, with conventional lines of credit such as credit card lending, there is the risk of hidden fees, which can make repayment costlier in the long run.
Given these facts, approaching services offering commission advances is far beneficial.
Myth: If a Sale Does not Realize, Then the Agent is Caught in the Worst Nightmare
Fact: Experienced commission advance services understand the unpredictable nature of the real estate business. It is also not uncommon for such services to encounter agents whose deals have fallen through.
Unrealized deals are a fact of the real estate business. What also is a fact is that a majority of real estate deals get realized. So, repayment happens as per the agreed time.
In cases where a sale does not go through, a reliable company will want to work with you to come to an agreement that is beneficial to both the company and you. In most cases, companies agree for repayment from a future commission. A reasonable extended fee may be applicable in such cases to compensate for the delay in repayment. Such an extended fee is also included in the future commission.
It is important for a real estate professional to choose only a reliable commission service company. Such companies will not desert agents during trying times.
Myth: Seeking Advance Commissions is not a Sound Financial Decision at All
Fact: An advance on pending commission is often the best solution for agents that have no access to conventional lines of credit.
Banks and other conventional credit institutions are usually unwilling to offer loans to real estate agents and brokers because of the extent of uncertainty inherent to the business. In such cases, an advance commission is the simplest and the most convenient solution available to an agent to secure money and keep the business growing.
With a reliable commission advance company, agents can overcome the tide of revenue uncertainty with success. Seeking commission advances is a sign of a proactive business approach rather than a poor financial decision.
Advance commissions may not be the best solution for every real estate professional. But they are immensely helpful for those seeking steady cash to stay in business. There is no harm or disrepute in seeking commission advances. The system is legal, and reputed service providers keep the entire process confidential.
If you are a real estate professional seeking an effective and reliable advance commission service provider, get in touch with Just Commission Advance. You can place your request online. Our commission granting process is easy and fast. We have no credit caps or credit checks. We have a live support service to help you.
You can apply online for an advance commission or get to know more about us.