Real estate agents are using escrow services to get cash on the fly. There are many expenses that need to be covered if you are in this industry. Since sales seasons vary and sometimes you might have money and other times you might not, you might need to borrow some cash so as to keep up with your bills. If you decide to take a listing advance, here is what you should expect.
Application
You will have to apply for the advance. In most cases, this can be done online. You will also have to submit a signed purchase agreement and state where you want the money to be deposited once your advance is approved.
The company will then scrutinize your sales history and check whether you have any other pending sales. If your application gets approved, the company will get in touch with you to confirm this. The money will then be transferred to your account.
You will be charged a hold out fee for these services. When the deal is finally closed, the company will recover their money. However, in case the deal falls through, the company can wait to recover their money from your next sale. You also have the option of paying back the money from other funds. This is especially if you are not able to close another sale on time.
Who can sign up?
Whether you are a new agent or you have many years’ experience in this field, you can apply for the advance. As long as you have a pending sale, you can get the cash.
You can be given the advance regardless of the kind of sale that you have made. It can be an active listing, pending sale, short sale or even commercial resale. The seller or buyer will not be made aware of this arrangement since the company will not contact them.
Agreement
Real estate commission advance companies usually expect that you will sign an agreement with them when you submit your application. Take your time to read through that application and see if you agree with everything that has been included there, particularly the part where it states what will happen in case the deal doesn’t go as expected.
This is so that you are not caught by surprise later on. However, you should know that in most cases, the deals will go through. It is only in rare cases that deals fall through.
Professionalism
Expect to be treated with courtesy and professionalism. In most cases, the company will respond to your application within a short period of time. You will get feedback as to whether the advance has been approved or not within one or two days.
Fees
The amount of fees charged depends on how much money you have requested for and how long the wait is until the sale is closed. Most of these companies have a cost estimator on their websites. Use this to figure out how much you will be expected to pay.