The real estate industry isn’t without its ups and downs, which is why it’s important for real estate agents to be prepared. Real estate commission advances help agents with cash flow by selling your pending commission and allowing you to receive the funds in advance. A commission advance is generally made by an intermediary company that supplies realtors with the money they need in advance for a small percentage.
Essentially, it is designed to fill the financial gap for agents who have immediate needs or want the comfort of having money in their pocket. Read on to learn 4 reasons why real estate agents can benefit from using a commission advance.
4 Reasons Why Agents use Commission Advance
If you’re a real estate agent, you might be wondering whether a commission advance is a good option for you. Here are 4 reasons why you might want to consider a commission advance for your real estate business.
The real estate industry is unpredictable — and patience is certainly important for agents when it comes to income. In fact, it’s not uncommon for agents to work for months before receiving any money. This unpredictability isn’t just discouraging but stressful, especially when agents consider any potential overhead and regular expenses.
A commission advance provides a great opportunity for agents to build financial security even with the uncertainty of a property selling. No longer will you need to wait until closing to receive your commission. You can instead have a steady income to help meet your needs throughout the month.
Pay for Expenses
All real estate agents will have ongoing expenses if they expect their business to grow. Expenses such as ongoing MLS fees, transportation, marketing, and operational expenses are all common fees that real estate agents face.
With that said, waiting to receive commissions can prove to be stressful when the demand for regular expenses is present. In order to stay afloat, real estate agents will need a consistent income to not fall behind on their expenses.
This is why a commission advance is beneficial for agents. An advance allows agents to pay their expenses on time, giving agents the opportunity to focus on what they do best — sell.
Invest in Marketing
Every real estate agent knows the power of great marketing. An effective marketing strategy helps agents increase their awareness, attract their target audience, keep up with a competitive market, and essentially grow their business.
However, ongoing marketing can be a big expense all on its own, which means real estate agents need to have a budget set to invest in their marketing efforts. A commission advance allows agents to have the money they need to stick to their marketing strategy. Agents don’t have to wait until they receive their commission to invest in their next marketing campaign, which can help agents keep up with the growing competition.
Grow and Sustain Your Business
Just as with any business, having revenue is necessary for growth and sustainability. A real estate agent will need funds on hand to invest in their business whether they have current or future needs.
Planning and setting money aside for your real estate business can be difficult when you have to wait long periods to get paid. What’s even worse is that these periods are often unpredictable. A commission advance creates stability and consistency for agents and is essentially the catalyst for growth and sustainability. Agents can make more choices for their business and effectively deal with any future changes or problems ahead of time.
Many real estate agents experience income uncertainty. But this doesn’t have to be the norm for your real estate business. If you want to ensure you always have the money you need, consider a commission advance to help fill the financial gap.