The wait is over – real estate agents can now prop up their finances with commission advance
>> Jan 17, 2018
Receiving commission upfront is the
dream of any real estate agent because their survival depends on it. The earnings from the commission are what
keeps the business running, and any delay in getting commissions can harm the
financial prospects of real estate agents. Now that a special financial
arrangement for receiving advance real estate commissions is available, it has provided much relief. Instead of waiting for deal closure to obtain
the commission, real estate agents can monetize the commission almost as soon
as they strike the deal. With the facility easily available, real estate agents
can concentrate better on the business without having to worry about cash flow
problems.
The wait is
over
The financial arrangement is similar
to bill discounting that provides an advance against the invoice showing the
sales proceeds. You receive the advance against the assurance of payment of
commission on the closure of the deal or within 30 days of availing the advance
whichever is earlier with a grace period of 15 days (negotiable) from the date
of closing for paying back the advance. The financial company scrutinizes the
details of the deal and on being satisfied with its credibility offers the real
estate agent a sum of money, which is either a part or full amount of the
advance subject to some maximum limit fixed by the company.
Encountering
business fluctuations effectively
Unlike any other kind of business,
real estate agents can never enter into long-term contracts to assure a
continued sale. They have to depend on the demand in the market to seize
opportunities for sale, and since the demand keeps fluctuating, the income of
real estate agents fluctuates too. There
are times when successive sales happen at close intervals, and again there are
times when there are no sales for a few months. The erratic nature of sales
puts a lot of pressure on the cash flow that real estate agents can efficiently
encounter by availing advance commission.
A shot in the
arm
Real estate agents are very happy
that at last, they have found some means of financial support that they badly
needed. It is never easy for them to
avail the conventional financing arrangements. Financial institutions and banks
are skeptical about the volatile real estate market and the uncertainty of
income of the agents and do not consider them for loans or any other forms of
credit lines. The advance commission has provided good support to real estate
agents who can now have more elbow room in arranging finances to take care of
the day-to-day activities.
The financial company offering the
facility of paying advance commission would charge some fees. If the financial
constraint is the reason for seeking an advance commission, then you should
look for some companies that collect the fees at closing. Moreover, you can
look for a longer grace period of 20 to 30 days so that you can payback once
the commission comes in.
The commission advance that comes in
handy and provides breathing time for re-arranging finances is a significant
development in the real estate industry.
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