The real estate industry is a huge and growing one and it shows no signs of slowing down any time soon. It is no wonder that each year there are thousands of would be real estate brokers that try their luck in the market. There is however a huge turnover in this market for real estate brokers and many, more than 50% don’t even make it through an entire year. This is why there are real estate commission loans that real estate brokers can take advantage of while they wait for their commission checks. But how exactly do real estate commission checks work? How is it that there are some that make it and many don’t?
Real estate agents work for real estate brokers that run brokerage firms. Everything that is paid to the real estate agent goes through his or her broker first because only the broker is allowed to sign a listing agreement with a seller. So the broker is the one that hands the agent his or her commission check.
Different real estate brokers compensate their agents variably. The brokerage gives out only 30 to 40% of the total commission to new real estate agents. From this amount, there are also other deductibles such as office expenses, advertising, and sign rentals. It’s no wonder why new real estate agents have a hard time thriving in the industry so they apply for a real restate commission loan. Top agents on the other hand get 100% of the commission and just pay the broker a desk fee.
One of the usual types of listing agreements between homeowners that sell their homes through brokers is the right to market the home exclusively in the market. The seller agrees to pay the broker a certain amount of commission in return for bringing a buyer in the table. This is typically a percentage of the sales price and is shared by the listing broker and by the broker that brings in a buyer.
Just the same with everything else in life, the division of fees between brokers and their agents is not always equal. It’s not always a 50-50 split. Listing brokers may stipulate for example around 7% commission and will give only 3% to the selling broker. The agent then that is able to sell a home is left with a smaller cut from the total commission and he does most of the work of closing the sale.
Most of the time especially when an agent has what we call a dry market spell and he’s not able to sell units for a while, there may come emergencies that necessitate the need for extra cash. This is when a real estate commission comes in very handy to help real estate agents get by while waiting for their commission checks. Real estate commission loans are usually provided by lenders that specialize in bad credit. This makes the requirements and the loan application process easier and faster for those agents that need extra cash real bad.