Understanding Real Estate Commission Factoring

More people than ever before are working for a commission instead of settling for the traditional salaried occupations. It seems like getting paid for your direct effort has become more lucrative. Becoming a real estate agent is the in thing. As a result, there is a desire to understand commissions and factors.

What is commission factoring?                               

Would you not be excited at the prospect of being able to access your money sooner than later? Real estate commission factoring provides a way for you to gain access to your cash without having to wait until the contract is formally in force. The application process is pretty fast. In a matter of minutes, you are through with the application process and you can start even within aweek.

Enterprises rely on cashflow. This is even more important for the real estate industry because the brokers and agents, who are the backbone of the industry, must be paid.  They cannot promote or market their products if the funds to do so are not available.  It is imperative, therefore, that funds be made available and in good time. Also, you live off commissions and having the money available in record time is a motivating factor for better performance.

At Diversified Funding Services, we can provide up to 90 % payment on commissions before contracts are closed—often as soon as hours after the papers have been signed.

How it works

A factor is used. This basically means that the service provider buys the receivables from the real estate sales before the contracts are in place. Once the contract is in force, you as the agent or broker receive 90% of the capital and the company awaits payment on the contract. Once that is done, you receive the remaining 10% less the company’s rate. The company rates are simple and based on the 90% advance you get on your total commissions. Here is the scale used to calculate the fees. NB: The numbers of days to close the contract are used to determine the fees.

  • 0-30 days:8%
  • 31-45 days: 11%
  • 46-60 days:14%
  • 61-75 days:16%
  • 76-90 days:17%
  • 91-120 days:19%

How does the agent/broker receive their money?

Your money can be wired to you or you can be paid by check. When the contract is closed, the company makes sure that it pays whatever commission that was not sold to them.

It is in your best interest to choose a company that offers fair rates in order to serve real estate players better. This way, you are able to have more capital left over to work with at a speed that is convenient for you and your business.

Advantages of real estate commissions factoring

  • You can easily access your receivables.
  • You can access your cash when needed and avoid missing out on opportunities.
  • Agents and brokers receive their money in record time, which motivates them to perform even better.
  • Your credit score is not a factor.
  • It is easy to start and the process is fast.

Working in an industry that relies heavily on cash flow makes factoring real estate commissions a timely solution giver, which ensures that neither your life nor your work suffers from a lack of funding when you need it.

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