Here’s a scenario: you are the broker of a local real estate office and one of your agents comes to you wanting to know about getting a commission advance. You have some options: either a) say no, but that could negatively effect your relationship with the agent, so you think b) offer the service yourself, but that would involve dipping into your own credit lines and in this market, money is tight so you decide to go with option c) refer your agent to one of the many commission advance companies out there…but which one? They are all the same, right? Wrong!

It appears the only similarity between commission advance companies in the United States is that we are all based on the practice of receivables factoring. Beyond that, no two advance companies are the same. As Broker, your biggest concerns over choosing the right company to work with are ones of liability and reputation. Generally speaking, you’re fine signing off on the advance, just as long as neither you nor your Company is ever held liable to repay it if the sale falls through. Secondly, you want to know the Company you’re working with sees you, the Broker, as the rightful owner of the commission and therefore requires your approval prior to funding. Right now in the marketplace, eCommission is the only commission advance company that works this way.

eCommission understands that all commissions legally belong to the Broker. We never advance a commission to an agent without the Broker’s consent. Brokers need to be extremely careful in this regard, because there are companies out there that will advance commissions directly to the agent, only to submit a payment demand to the Broker after the fact. In certain situations, this can catch the broker off guard because the possibility exists the agent might owe the Broker money or have left the company. It’s a bad day surprise for the Broker and it’s not right.

If you are a Broker and want to allow your sales associates to receive the financial benefits that come with offering advances on commissions, then eCommission is the only Company you should endorse. We have been the exclusive partner for Century 21, RE/MAX, Prudential, Coldwell Banker and ERA since 2000, along with hundreds of large, independent companies. eCommission sees the Broker as a true business partner, requiring you to sign off on every advance prior to funding. If a sale falls through, it is 100% the responsibility of the agent who received the advance to repay or replace the commission with a future sale. The only thing we ask of the Broker is to direct the next commission payable to that agent to us if / when they put their next deal into escrow. If no sale materializes, there is nothing the Broker can do and it remains the agent’s responsibility to repay.

I speak to Brokers everyday on this subject. Some confuse eCommission with other companies or assume our contracts are the same. They are not. eCommission has no liability for brokers and because they are the rightful owners of all commissions, we require brokers to authorize each advance prior to funding. In my experience, building relationships with Brokers and treating them with respect has always led to more business. I invite your questions or comments.

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This entry was posted on Tuesday, April 15th, 2008 at 11:17 am and is filed under Real Estate Brokers. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.