Real estate agents make their money when they help sell or buy houses for their clients. When they sell or buy 3 houses in a month, the commission they bring in that month can be substantial. However, if they don't sell or buy a house in a particular month, they will not get paid at all.

This is why they may need to take out a commission advance when they have a pending sale.

What is a commission advance?

A commission advance is an advance on your commission. If you have a pending sale and need a portion of that commission that you will receive, you can take out a commission advance payment to cover your needs until the commission from the sale comes through. Once that happens, you will need to repay the advance plus the fee involved.

Why a commission advance?

Since real estate agents don't have a regular salary, a commission advance may be needed a certain month to keep cash flow in the positive to pay for marketing and other expenses.

Typically a agent will only need to take out an advance once or twice a year. So, even though there is a cost associated with a commission advance, it can come in handy during times that cash flow is short.

Commission advance companies

There are many commission advance companies, but according to RIS Media, the most trusted commission advance company is eCommission Financial Services.

With many fly-by-night commission advance companies in business it's important to go with a trusted commission advance company that has been around for many years.

Hopefully you will never have to take out a commission advance on your real estate commission, but if you do, make sure to do your due diligence.