Real Estate Agents and Brokers
As a real estate agent, you work hard, you get results, your customers and clients value all you do, and they refer future people to you. You market your skills and the benefits of working with you, and you grow your business. As a real estate broker, you also work to grow your business. You recruit the right agents, you market the office to generate inquiries and bring in new prospects. You also cover your office’s fixed and variable costs.
Cash is King
One thing is true of all businesses whether you are a Realtor or a Broker: cash is king. Here is a powerful thought: if cash is king, then commission advances are the chariot that takes the business forward. Commission advances are a powerful way of always knowing you have the cash to run and grow your business. Let us discuss the real advantages of commission advances.
Whether you are an agent with a property under contract or a broker and have several agents with firm sales, you have an asset in that future commission that you can use today. Closings are usually at least 30 days away and often much further. Many agents and brokers either delay a project, put marketing on hold, funnel money from their personal life to their business life, or they dig into their overdraft facility. By making the best use of a commission advances facility, none of those issues ever arise. Your business continues to perform, to grow, and you do not have to choose between home and office.
Advantages of Commission Advances
1. Control Your Cashflow
Maintaining efficient operations, getting a new listing on the market, or keeping the marketing mill turning so you never suffer the ‘feast and famine’ other agents do demands controlling the cash that comes in and the cash that goes out. The quickest, easiest, and cheapest way of doing that is to:
- Plan ahead so you know what your future spending needs are or are likely to be.
- Balance what you plan on doing against your future income.
If you have full coffers, that’s great but if you see a potential shortfall, release some of that future commission today. Your business will keep functioning, your new listing will hit the market running on Day 1, you will get ahead of a competitive listing, and you will climb to (or stay) top of mind in your marketplace.
2. Invest Wisely
Good planning is the basis for success. As a Broker, you work to well-established plans, either as an independent office or because you are part of a national franchise with clear requirements. As an agent, you set performance goals for your own operation. Without planning, many agents spend money on each bright, shiny object that is marketed to them as the way to succeed. Often a quick and exciting decision to spend is not always the best decision, but many agents who have just received a commission check immediately spend some of it on that shiny object.
When you plan ahead and know you have cash available because you have a commission advance arrangement, you can think through those marketing ideas. If the idea really is good for you and your business, then invest wisely, if not, walk away, knowing the advance will be there next week or next month after you have thought through how to put your plan into action effectively.
3. Go Low
Many people in business rely on their credit cards to fund immediate payments, knowing it will only be a couple of months before a commission check will let them pay off that debt. Some people just get used to carrying credit card debt over to another month. That cost is high because the interest rate is high. Discounting some of your future commission to avoid current, high interest rates makes a lot of business sense. Go low on costs and keep growing your business.
4. Build Your Team Grow your Footprint
Brokers recruit agents, and most agents behave as independent contractors in every way. One way of your agents not feeling totally isolated is to encourage them to think how they can each do something that will benefit everybody. You can arrange an office event, create a brochure that advertises everyone as part of the office brand, launch a joint marketing program that costs each of them a little but delivers a huge result compared to each agent doing their own thing.
The ideas are limitless, and instead of some agents saying they cannot join in, you have two easy options:
- Use your own commission advance to fund the project for them to repay later.
- Have individual agents arrange their own commission advance, so the projects launch as planned and deliver those intended results.
The Bottom Line
Cash is king and credit is the chariot. Plan ahead, invest wisely, keep your financial costs low, and you will move ahead and stay ahead of most other agents and Brokers. Making the right use of commissions advances fuels your business. Please just click here to learn more about how Commission Express can help you deliver on your goals.