How Do Commission Advances Work in Real Estate Industry?

In the current business world, people have come up with various ways to facilitate better engagements between the business, clients, and other parties. Commission advance is one of the many new financial services in the real estate industry.

Real estate agents can sell pending commissions to third parties and receive funds in advance whenever financial needs arise. Commission advances have been a life-saver to many real estate businesses regardless of the myths constantly surrounding the service. To benefit fully, ensure you’re working with a reputable company by evaluating the above characteristics. Your real estate business deserves a continuous flow, free from financial constraints.

Let’s learn how commission advances work in the real estate industry.

Reasons Why Real Estate Agents Use Commission Advances

Commission advances are mainly found in the real estate industry and used by real estate agents for various reasons, including:

Due to the unpredictable nature of the industry, real estate agents sometimes run out of funds for personal or business-related issues. They need to sell properties through commission advances to get immediate funds.

Enhance business performance

Real estate agents use commission advances services to enhance the growth and performance of their businesses by building a better cash flow. All businesses rely on a steady cash flow to run and perform tremendously.

Market their business

Real estate agents have plenty of ways to market their businesses, including commission advances. But how? The funds acquired from commission advances can fund marketing services and materials.

Cover business expenses

Every business has expenses even when it’s not making enough profits. That’s where commission advances cover all or a large part of the business’ expenses, such as overheads, license fees, and electricity bills.

How Do Commission Advances Work?

Real estate agent commission advances are easy to obtain, especially if you work with a reputable company. As highlighted earlier, the service allows real estate agents to acquire funds from selling pending commissions to third parties.

When a stock (property) or bond is listed as an asset, it can be sold at any time and price through a mutual agreement. Similarly, when you have a real estate commission (due at closing), it’s considered an asset, meaning you can sell it (entirely or partially) to other parties and acquire funds before the closing.

The real estate agent then acquires the funds immediately in exchange for ownership of part of the sold commission. However, the full ownership is transferred at a future date when the new owner pays the total price.

Benefits of Commission Advances

Commission advances boast plenty of benefits compared to other business funding options that a real estate agent would consider, including:

Quick application

Commission advances do not need application or processing fees like other funding options such as bank loans. The only extra fee real estate agents incur with the service is a small percentage of the entire advanced amount.

No new credit history research, reports, or other details are needed for a real estate agent to be granted commission advances, thus making it more reliable than other funding options.


With commission advances, you can acquire funds for different reasons based on your needs, unlike with other funding options such as bank loans which limit clients to specific reasons for borrowing.

Quick approval

Commission advances are quicker to apply and process than other ways of funding businesses. The service takes 12 to 24 working hours for the entire process.

High acceptance

It’s nearly impossible to be denied access to commission advances even with a poor or average credit score. Commission advance companies focus on the value of the commission at hand rather than the business or its owners’ credit history.

Myths Surrounding Commission Advances

There will always be some myths surrounding different financial services. Below are a few myths that tend to hold real estate agents from pursuing their rights for commission advances:

Acquiring commission advances ruins your credit score

Wrong! Commission advances aren’t loans and have no impact on your credit score.

Commission advances are expensive

From the above information, commission advances are probably the cheapest and easiest way of funding a business for real estate agents.

Commission advances ruin business-customer relations

Working with a reputable commission advance company ensures the entire process remains confidential and protected from unauthorized parties, including your clients.

Commission advances are meant for new and developing real estate agents

Any real estate agent can acquire commission advances for different reasons, whether new or developed in the industry.

Characteristics of Reputable Commission Advance Company

Your business and career deserve the most trustworthy partners possible. Below are various characteristics to help you pinpoint a reputable commission advance company.

  • A long and excellent experience in the real estate industry.
  • An interactive physical and online client experience.
  • Companies that have embraced localization into their services.
  • Reliable payment systems after applying for commission advances.
  • A strong base of positive client reviews and testimonials.