Questions you should ask when choosing a commission advance company.

At FRAME, we understand the importance of having all the facts when it comes to commission advances. To help you make an informed decision, we’ve compiled a list of FAQs about commission advance services.

What is a real estate commission advance and how can it benefit Canadian REALTORS®?

A real estate commission advance is an agreement that allows a real estate agent and their broker to immediately access a portion of their pending commissions. This type of financial service is typically used when a real estate agent needs immediate funds to support their business operations prior to closing a sale. Through the agreement, the broker will agree to sell a fraction of the agent’s commission in exchange for a fee. Canadian REALTORS® typically take advantage of commission advances when they need cash quickly. Some typical uses include covering marketing costs, paying taxes, purchasing supplies or advertising, creating business collateral and insurance fees, as well as other business necessities that may arise prior to closing a sale. Real estate agents look to commission advances as an alternative financing solution that can help them run their businesses more efficiently and fund certain operations without having to wait for the home sales transaction to close.

How do you choose the right commission advance company?

1. Find out what services the company offers.

Before you make any decisions, find out what services the real estate commission advance company offers and how much they charge for those services. Make sure to ask questions such as:

  • What fees will I be responsible for?
  • How quickly can I get access to my funds?
  • Does the company offer additional financial serviceS? 
  • How does it work? Same day funding? What is required to access the funds?
  • Does the commission advance come with any risk or other obligations?

2. Check the commission advance companies’ reputation & social reviews.

It’s also important to check a company’s reputation and read reviews from other real estate agents who have used their services. Ask around in your industry circles to see if anyone has worked with a particular commission advance company before. Research online reviews on sites like Google, Yelp, and popular social media platforms, and look at the ratings given by previous users. This will help you get an idea of what other people think about a certain commission advance service provider before committing to their services.

3. Consider the funding options and terms of use offered by each commission advance company.

Ask questions to understand terms of repayment and any fees or interest rates, such as:

  • What repayment methods are accepted?
  • What is the minimum and maximum advance I can get?
  • What is the repayment process?
  • Are there any hidden fees or costs?
  • Are there any restrictions or limits on how long I can keep the funds? 

4. Consider the financial stability and experience of the company when making a decision. 

When choosing a commission advance company, it is important to take into consideration the financial stability and experience of the company. It can be difficult to assess how stable a company is without doing extensive research, but there are certain questions that can help you get a better idea.

Firstly, ask how long the company has been in business and what type of track record they have. It is also important to inquire about the company’s financial resources, such as their cash flow, capital base and other funding sources. Additionally, you should ask about their lending policies and how they manage risk. Finally, it is important to inquire about any customer complaints and the steps taken by the company to address them.

5. Ensure Customer Support Is Available.

When researching and choosing a commission advance company, it is important to ask questions that will help you determine the quality of customer service they provide. Knowing that your chosen commission advance company offers accessible and reliable customer support can make a big difference in the success of your business.

Questions to Ask:

  • How long has the commission advance company been in business?
  • Is there an online customer service portal available?
  • How quickly do they respond to inquiries? 

Once you’ve answered these questions, you should have a better idea of which commission advance company is best suited to your needs. Remember to research thoroughly before making a decision, and if possible, consult with other real estate agents who have used the service before. 

In closing, choosing a real estate commission advance company is an important decision for any real estate agent. You should take the time to research what the company offers, make sure they have a good reputation and experience in the industry, understand the terms and conditions of the advance, factor in all costs and fees associated with it, and ensure customer support is available. With careful consideration of these points, you can better choose a commission advance that meets your needs. 

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