Sealing that big real estate transaction after weeks or months of working on it can bring on an exhilarating sense of accomplishment. However, all of that excitement often fades away when you realize that the terms of your agreement leave you waiting another few weeks or months for your commission on the sale to arrive. You probably didn’t count on the inconsistent cash flow and not having any control over your paydays.
Through the seasonal ebbs and flows, whether it’s a seller’s market, or a buyer’s market that fact never changes. You’re still stuck waiting for months on end to get paid. Covering your expenses while you wait on commissions owed to you can be difficult, so consider taking out a simple advance. Commission advances allow you to access the money you worked so hard to earn immediately rather than waiting for a check or bank transfer that is tied up in formalities.
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Benefits of Advances
Keeping a real estate business running smoothly requires a steady flow of cash. Long closing periods make it tricky to space out payments. Take advantage of commission advances to enjoy benefits like:
- Quick payment when you need it
- Low fees and rates due to the fixed nature of the future payment
- Basic requirements are easy to meet, unlike with other types of business loans
- Few limits on the amount of payment, making it easier to cash in on large commissions
- Coverage for a wide range of sales and deals, including new construction, condos, and other properties
If you are trying to decide on a lending solution for your real estate business, setting up an account for commission advances could help even out your cash flow over the months. This makes it easier to stay up to date on tax payments and marketing efforts. Multiple requests can be processed at once by most lenders.
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Commission Advances Can Help You Market Your Business
Let’s face it, selling real estate is hard work. It takes a great deal of time and effort to market and sell a house. Business cards, signs, websites, seminars, newspaper advertisements, and open house flyers are expensive, and then you have showings and open houses too. If it’s been months since you’ve received a commission check, your budget might not allow for these marketing strategies.
With commission advances, you can spend less time worrying about where you’re going to come up with the money to pay for everything, and more time focusing on your marketing techniques and doing what you do best, selling houses. Every real estate agent knows that every penny put into marketing has the potential to generate more leads and sales.
When you’re waiting around for your commission, your business can become stagnant. Instead, taking out a commission advance gives you an opportunity to grow your business and soar to new heights.
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Commission Advances Can Help You Regulate Your Personal Finances
Just because you don’t have a regular paycheck doesn’t mean the bill collectors are going to wait until your next commission check comes in for their money. They expect you to pay your bills when they’re due, just like everyone else. Falling behind on your bills means possible disconnections and a plummeting credit rating.
Your credit rating is all about your ability to manage your money. However, your credit score doesn’t take your income or how long you have to wait for your commissions into account. The credit reporting agencies only take how much money you owe, and how far behind you are on your payments into consideration.
Commission advances allow you to control your income and project it more accurately so that you can stay on top of your finances and manage your money confidently. They allow you to pay your bills when they are due, and not when your deal closes and your commission check finally comes in.
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The ability to balance your finances will alleviate all of the stress and worry over your bills, regardless of how many months away your closing date is. Finally being able to gain control over your finances and repair or maintain your credit rating enables you to qualify for other loans or lines of credit when you need to.
How Do Real Estate Commission Advances Work
With commission advances, you can get your money right away instead of having to wait until the sale closes. Commission advance companies purchase your commission so that you can get your money now when you need it. Then, when your deal closes, you simply repay the loan. The ability to have your money in your hands when you need it the most gives you some financial freedom and the ability to get ahead.
Requirements for Commission Advances
There are a few requirements for these kinds of opportunities. Lenders can’t hand out money just on the promise of a deal, so you will need to meet these rules before applying:
- A completed sales agreement that is firm and advancing to closing
- A set closing date
- Immediate notification of any changes to the sale, its terms, or the date for closing
- Proof of conditions being waived for the sale
- Proof of your commission amount and the agreement for its payment so the lender can take over the transaction when it occurs
Interested In Applying For a Commission Advance?
If you’re having trouble making ends meet while waiting for your commission cheque, a commission advance could be the solution you’ve been looking for. Loans Canada can help by matching you with the right lender for your needs.