Real estate agents have come to realize that they do not have to wait until a sale is closed to receive their full commission and have increasingly chosen to convert their receivables to cash. Getting a commission advance is not the same thing as getting a loan. It allows real estate agents access to funds quickly after showing the lender documented proof of an impending sale as opposed to a financial institution checking credit, requiring paperwork, and not being able to provide access to the funds in a timely manner.
A real estate commission advance is a tool that the agent can use to advance their business and is often seen to be the superior tool to loans and credit card advances. Once you receive your commission advance, there are a number of things you can do to grow your business and below are 4 smart things to put your real estate commission advance towards.
1. Advertising and marketing expenses
The bulk of business for a real estate agent stems from advertising and marketing activities. It is therefore logical that as an agent, a sizeable chunk of your resources would be channelled into this area. Using your commission advance to fund your advertising and marketing expenses is a smart option. Without it, your business may suffer due to the ability of your competition to pay for these things and in turn be more visible to potential clientele.
You can use the commission advance to do such things as improve your website, marketing materials, business cards and take out more advertisements on billboards and in newspapers, magazines, and online.
2. Make payments towards estimated tax
Businesses are required to pay income tax and it is often beneficial to pay it when you can so it does not hang over you and you can move on to funding other obligations. It is advisable to make a conscious effort to pay your estimated tax in good time to avoid penalties. Your real estate commission advance can help you in this area.
Your obligation to pay taxes could interfere with your ability to advertise your services and pay employees and office expenses which will result in your inability to stay competitive in a crowded real estate industry. Therefore, paying your taxes while you have the money in hand will then allow you to use any money earned in the near future to put towards your business.
3. Business expenses
You want your office to be a nice, welcoming, clean place to have clients visit you so using your commission advance to spruce up your office so it has these qualities would be beneficial. To be a fully operational real estate office you need office supplies such as computers, printers, copiers, desks, and chairs and they should obviously be functional and in good shape.
These items are not cheap but using your commission advance to purchase high quality office supplies will show customers that you mean business and they will last for years to come, allowing you to avoid costs for replacement.
4. Offset other debts
Debt can curtail how much capital your business has and because it takes money to make money it may threaten your ability to operate. Consider using your commission advance to pay down debts that are high interest and are causing you to pay little against the principal amount.
These types of debts take a long time to pay off and will not allow you to address other financial needs. Be mindful of the fact that when you are debt-free, more money will be going into your pocket and allow you to pursue other interests that could benefit the company or even expand your operations.