Even many experts in cash flow management would become wary of managing the cash flow of real estate business due to the highly dynamic state of the industry. The most concerning aspect that hinders proper cash flow management is that sales and demand keep fluctuating throughout the year. Never would you be able to forecast the cash that would be required in the coming months and this poses a great challenge to tide over the occasional lean period in sales. Some financial companies have created a unique model of paying advance to real estate agents to take care of any dip in cash flow that often threatens the daily business operations and marketing activities. The arrangement consists of payment of commission advance California against committed sales so that the agent need not wait for the closure of the deal to access the cash.
Advance commission provides buoyancy to cash flow in real estate business.
Get the commission early
Commission advance schemes aim to make the cash available to real estate agents without having to wait for the deal closure when the commission becomes due for payment. The process consists of the real estate agent selling the commission to the financial company for a discount and collecting the cash. Whether the real estate agent wants to sell the entire commission or only a part of it is a business decision that they have to take. The agent can cash out as much as 75% of the commission subject to a maximum amount set by the financial company. Excepting for agents with a poor track record in meeting legal obligations, any real estate agent with a valid license is eligible for the advance.
Keeping debts under control
The advance money received from the arrangement help real estate agents to avoid getting trapped in debts when there is a slump in sales and the market is sluggish. Every business lead becomes highly sensitive at these times to sustain an income that is necessary to run the business without compromising on reputation. The financial stress occurs because there is a scarcity of funds necessary to meet the overheads expenses when little or no money is flowing in. By having access to the commission in advance, the threat of scarcity of funds diminishes that gives real estate agents the confidence to survive through the bad times.
Staying relevant in the industry
The real test of real estate agents is to stay afloat and remain in touch with prospective clients when the going is not good. This requires carrying out a good amount of public relations activities and advertising the business to take forward the marketing initiatives. For promoting the business, it requires good money not only to attract new clients but also to retain your existing clients. Since commissions are the only source of funds, receiving it early would ease the flow of cash that helps to sustain the business activities that could promise of better days ahead.
Commission advance cannot solve the problems arising from financial crunch, but it works as a stitch in time that could pay dividends in the long run.
Author: Alexander Fernandise Email: firstname.lastname@example.org https://www.minutefunding.com/