In the real estate industry, it is often difficult for agents to obtain access to funds in between sales, and when waiting for a deal to close. The unfortunate fact of the matter is that real estate agents simply do not get paid their hard earned commissions until after a deal has closed. Despite this, there are many times throughout the year when real estate agents need access to capital in order to ensure the continued success of their business, and stability of their day-to-day life. This problem led to the creation of commission advance companies.
Commission advance companies will purchase a portion of a real estate agent’s commission, at a price slightly lower than the amount of the advance, and then pay the realtor that amount in cash, providing the real estate agent access to their commission before their deal closes. This amount is calculated based on the amount of the advance, and the number of days until closing. For instance, at AccessEasyFunds, one of Canada’s leading commission advance companies, if a realtor were to advance $5000 of a commission from a residential resale for 30 days, they would pay $112.50 to gain access to those funds.
A realtor can apply for a commission advance with one of these companies as soon as they have a firm sale; however, some companies will only process a new advance request within 90 days of the official closing date. Other companies, like AccessEasyFunds, are perfectly happy to purchase a realtor’s commission any time after a deal becomes firm, so it is important to research the policies of any company while selecting the right commission advance supplier. Likewise, some companies have minimum commission amounts that a sale must meet, while others, like AccessEasyFunds, do not.
Once an agreement with a commission advance company has been finalized, they typically tend to send the money directly to the agent’s bank account via Electronic Funds Transfer. The fastest companies will issue an agent their money on the same day the advance is finalized. Reputable national suppliers ensure that all of their deals remain completely confidential and secure, and maintain the ability to provide their customers with their funds quickly and effortlessly. A quality commission advance company will not charge administration fees, application fees, account fees, reserve holdbacks or any other hidden fees – they will be 100% transparent in the entire process.
We hope this brief introduction to the ins-and-outs of the commission advance process has been helpful to you. If you’re ever in doubt about whether a company is reputable, make sure you cross reference them with the information provided here. You should also read all the fine print of any deal they might offer you and check their references online. Good luck!