Last week, I wrote about the Commission Advance Program for Brokers/Owners and received quite a bit of feedback.

The management team of eCommission Financial Services created the commission funding industry over a decade ago. Our experience and knowledge, along with a sophisticated approval criteria, can be a great addition to your recruiting and retention efforts. Your Sales Associates will have greater control and predictability over their finances.

Here are some of the questions I received from Broker/Owners:

What are the Broker’s responsibilities?

The Broker must authorize each eCommission application that is made by a Sales Associate. This ensures that you have total control over all of the transactions for your office. If a sale does not close, the Sales Associate is responsible for repayment or replacement with the proceeds of future commissions. The Broker is not responsible for repayment or replacement and does not bear any financial liability.

When can a Sales Associate apply for an eCommission?

When they ahve an accepted purchase contract for a single family, residential home, town home or resale condominium. The closing date must be within 120 days and if financing is a contingency, the buyer(s) must be pre-qualified by a lender. Commercial or vacant land does not qualify.

How much can a Sales Associate need to supply?

The maximum eCommission available is 90% of the Sales Associate’s net earned commission (up to $10,000 per transaction). Should you prefer less than 90% or $10,000 for your office or any individual Sales Associate, you can adjust these amounts at any time.

How does a Sales Associate get started?

By creating their account either online at www.eCommission.com or by calling us toll-free at (877) 882-4368.

What is the accounting process for my office?

eCommission is a simple bookkeeping entry under “miscellaneous adjustments” and does not affect the Sales Associate’s gross commission income on their 1099 form.

With market conditions changing rapidly, many Brokers/Owners are looking for creative ways to ensure their Sales Associates remain productive. One such solution is eCommission. We provide advance payment of commissions within 24 hours on sales closing up to six months in the future. And best of all, you can offer eCommission with no risk or liability for you, the Broker!

You may have knowledge of other advance companies that will hold the Broker responsible to repay a defaulted advance. eCommission does NOT agree with this policy. Our contracts are clear: In the event we advance funds on a sale that falls through, it is the agent’s responsibility to repay the advance or replace it using another sale. The Broker is not held liable. We see you as our business partner and require you to approve EVERY advance request BEFORE funding takes place. With eCommission, you’re always in the loop.

Endorsed by the top five national real estate brands and having advanced over $300 million since 2000, eCommission is the proven industry leader.

With inventories of unsold houses on the rise and pending sales delayed with financing issues, more and more brokers are presenting eCommisssion to their Sales Associates as a solution to gaining control over the timing of their commissions. Register your company with eCommission today. There is no cost or liability involved.

Q. What is eCommission?

A. eCommission is a commission financing service headquartered in Austin, Texas, who provides real estate sales professionals with advance payment of their commissions within 24 hours.

Q. Is eCommission a bank?

A. No. eCommission is a service provided to professional real estate agents by eCommission Financial Services, a privately held corporation specializing in financial services for the real estate industry.

Q. How does eCommission work?

A. Agents can sign up for an eCommission account any time by going to eCommission.com. Agents complete a simple application and submit this, along with the purchase contract, to eCommission. eCommission reviews the contract and if approved, will wire transfer the advance to the agent’s checking account. The Broker also signs the eCommission Agreement to ensure he/she is made aware of the transaction.

We get this question often, especially as a New Year rolls around. The question is: Are the fees associated with receiving a commission advance tax deductible? The answer is: they CAN be. The IRS may allow you to deduct costs associated with using eCommission provided:

a) you were an independent contractor at the time of your advance

b) you used the proceeds of your advance exclusively for business purposes

eCommission will be sending out tax summaries to all active clients who completed advances in 2007 over the next two weeks. I suggest that you consult with your accountant or tax preparer in order to determine whether you are eligible to receive this deduction.

I found a great blog posted in Active Rain by Ginny Nieves-Zmijewski, a Realtor in North Carolina listing 11 things to remember when figuring out your available tax deductions. Check it out here: Tax Deduction Tips

Thanks,

Sean

Not surprisingly given the challenges agents are facing in this tough real estate market, credit scores are falling. Customers inquiring about our service often ask if they need to have good credit to receive an advance. The answer is no. We require only a minimum fico score of 500 or better to receive a commission advance. But the lower the score, the higher the cost to advance. Conversely, the better your fico score, the lower your cost to advance (and the more money you can receive).

Being proactive about your credit score is important because so much depends on it. So to help, I came across this blog posting from Rhonda Porter called “Improving your credit score“.

Rhonda is a mortgage professional in the Seattle area and she does a great job explaining several ways to improve your score. If you have questions, please don’t hesitate to give us a call or post a reply.

Thanks,

Sean