5 Ways to Compare Commission Advance Companies

5 Ways to Compare Commission Advance Companies

Commission advance companies give realtors and brokers access to working capital that might otherwise be tied up in pending transactions that take weeks – or months – to close.

What should you look for when comparing commission advance companies?

All commission advance companies basically provide the same service, a financing tool realtors can use to get an advance payment on commissions they have already earned. However, all commission advance companies are different, and understanding what to look for can help you make the most of this debt-free financing tool.

The amount offered to you in an advance (usually a high percentage of the pending commission amount) as well as the cost of factoring commissions (usually a low percentage of the pending commission amount) is important, but it only gives you part of the picture. By comparing the offers and programs of two or more commission advance companies side by side, you can maximize the benefits of factoring real estate commissions whether you factor a commission on a one-time basis or you are looking for a commission advance company to work with over the long term.

5 Factors that Impact the Benefits of Commission Advance Financing

1. Advances and fees

The advance amount is the amount of working capital offered to you by a commission advance company. It is usually expressed as a percentage of the amount of the pending commission.

For instance, if you factor a $6,000 commission with a 93 percent advance rate, you receive $5580 as a commission advance.

Want to try the math yourself? Use the Commission Advance Calculator here to see how much working capital you could unlock from pending commissions by factoring them instead of waiting for transactions to close.

Enter the amount of a pending commission you would like to factor to see how much working capital you could unlock with commission advance financing:

Fees – and hidden fees

Fees (also referred to as financing fees or factoring fees) also impact your ability to maximize cash flow by factoring commissions instead of waiting for transactions to close, and for escrow and title companies – or other brokers – to release commission funds.

Some commission advance companies charge fees for notifications, account management and set up, due process, and other administrative tasks that drive up your financing costs. Some companies even offer what looks like a low rate but is in reality a compounding rate (assessed weekly or daily from day one) that dramatically increases factoring fees depending on how long the transaction takes to close and for the parties involved to release commission funds.

We want to earn your business by being an effective financial partner, which means transparency in our fee structure.  In most cases a low factoring fee will be your “all in” cost when you choose Corsa Finance, but depending on how you choose to have funds distributed, a wire fee may apply as well. We would be happy to provide you with a free quote, including a rate schedule – scroll down and request a quick quote below or apply online.

2. Process 

From the application process to the request for an advance on a specific commission to the ability to submit documents electronically, the speed at which commission advance companies process your submissions is important.

We understand that speeding up cash flow and taking control of your pipeline is your ultimate goal in factoring commissions for an advance, so we look for reasons to say “yes!” – often providing same-day answers and funding in 24-48 hours – or even less.

In addition, commission advance financing is not dependent on your credit score, so there are no checks on your credit. A low credit score that might make it difficult for someone to obtain traditional financing shouldn’t impact your ability to get an advance on pending real estate commissions.

3. Contract requirements 

Commission advance minimums can come in more than one form. One type is that a pending commission must rise to at least a minimum dollar amount to qualify for financing.

Another type is that you, as the realtor, must agree to factor multiple commissions or even all commissions earned over a period of time. Or that you provide notification of a desire to stop factoring commissions (or factor with a different commission advance company) months in advance, with financial penalties for canceling your contract.

We offer clients flexibility to factor only those commissions they want to factor, and we are one of the few commission advance companies that will give an advance on small commissions as well as large ones. And we don’t require clients to commit to long term contracts. We want you to stay in control, so you can always do what is best for your business.

4. Use of funds

Since they are business revenue, tying use of funds to business purposes makes sense, and commission advances can be used for nearly any type of business purpose. Realtors may want to gain fast access to working capital for many reasons, such as:

  • marketing and advertising – including both digital and print
  • holding home buyer or seller attraction events
  • paying for property staging, photography, video or drone videography – or other vendors
  • meeting payroll for office staff or assistants
  • paying state and/or federal taxes
  • paying for a new work vehicle, or for work vehicle repairs, maintenance, etc.
  • traveling for business, such as attending conferences
  • continuing education and licensing expense
  • lease, office and operating expenses

5. Customer service

High advances and low fees can’t make up for poor customer service, slow decision making or delays in funding. When comparing commission advance companies, consider the level of service offered and the relationship that you want to have with your account manager.

At Corsa Finance, we are interested in knowing more about your business and how we can help service its financial needs over both the short and long term. We want to earn your repeat business and referrals, and we know the only way to do that is by providing a high level of professional and courteous customer care.

Get a free, no-obligation quote:

We would be happy to provide you with more information about factoring real estate commissions or give you a free, no-risk quote to help you decide if an advance would be beneficial to your agency. Contact us at 855-882-6772 or complete the form below and we’ll reach out to you with answers.

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5 Signs Real Estate Buyers Send When they are Ready to Pull the Trigger

5 Signs Real Estate Buyers Send When they are Ready to Pull the Trigger

Despite the advice to sales pros proffered in the iconic movie, Glengarry Glen Ross, “Always Be Closing” is not a good selling strategy. Here are five signs real estate buyers send when they are ready to make a decision.

Trying to Close Before You See Buying Signs Can Bring on Rejection

Trying to close a sale before your buyer is ready to make a decision can negatively impact relationships with decision-makers or even drive them away. Here are five signs both commercial and residential property buyers send when they are ready to sign on the dotted line.

5 Signs Real Estate Buyers Send to Let You Know It’s Closing Time

1. They ask about the process.

Clearly, if a commercial property or residential home buyer is asking you what the next step in the process is, they are at – or nearing – the point where they will make a buying decision. This is your opportunity to see just how painless and easy you can make it for them to take the next step in the real estate buying process.

2. They ask if the “best offer” is on the table.

While this might mean the most recent offer was not good enough, it could also mean they are ready to accept it and just hoping for one more concession. If the sellers have made a fair offer, it may be best to say that the best offer is on the table, rather than potentially opening up a new round of negotiations.

On the other hand, if there is a way to sweeten the deal that may be especially meaningful to your buyer, you might consider offering additional incentives for signing on the dotted line (along with an offer expiration date!) in the form of a “here’s our bottom line” number.

3. They ask about options or alternatives.

If a real estate buyer asks about add-ons, buyer bonuses, upgrades, HOA or maintenance fees or other options, it could mean they are ready to make a decision and want to be sure they will have what they want most, or it could be an indication that they are comparing the property to other options. In either case, it’s an indication that they are ready to make a buying decision but want to be sure they are getting the best deal for them. Find out which of these “extras” are most important to your buyers and see if you can deliver them; it might set your property apart from all the others they are considering.

4. You overcame or satisfied objections or concerns voiced by buyers.

Addressing real estate buyer concerns, providing education, comparisons and specifications, providing guarantees or offering buying incentives can all be the means of overcoming buyer objections, and it’s a natural time to ask the buyer to pull the trigger or ask “trial closing” questions (see below).

Alternatively, objections raised can also be a signal that a buyer is not quite ready to make a decision or is having second thoughts, especially if the buyer is raising new objections after you have addressed their initial concerns. It’s also important to be aware that buyers may not always provide you with the real reasons they are not ready to buy. Don’t be afraid to take a step back to give them time to re-consider their decision or to evaluate whether you have correctly identified what’s really holding them back.

5. Readiness has been identified using “trial close” questions.

The “trial close” is usually a type of question asked to determine if the buyer has any additional concerns or objections that have not yet been discovered yet, such as:

  • Do you need any more information before you buy? (or sign the contract, etc.)
  • Do you want to see any other options?
  • If all concerns / buyer requests are met, are you ready to make a decision?

Trial closing questions can help you evoke buying signs and determine how close a buyer is to making a final decision. They also help ensure that you don’t lose a sale simply because you didn’t ask for one, but without putting the buyer into a final “yes” or “no” position.

While many in sales use the term “closing” to refer to what they do to motivate buyers to take action, the “closing” of a sale is simply the final step of a transaction, whether that involves a buyer signing a contract or submitting payment. In commercial and residential real estate, the buying cycle can vary widely in length, with some buyers arriving to the process nearly (or completely) ready to make their final buying decision, and others needing additional information, incentives or time.

Regardless of the length of your buyer’s individual cycle, it’s important to pick up on buying signs that can tell you where they are in the buying cycle, so you don’t scare them away by demanding a decision too early or lose a sale because you never asked for one.