What a winter!
During the past few months, have you been identifying and organizing priorities for your business? What about for your cash?
For instance – recruiting, retaining and growing productive agents OR financing a request(s) for a commission advance. Which is the best use of your capital in this changing market place? Which yields the best return for you and your business?
Let’s look at a possible scenario when an office does commission advances internally –
* 25 in-house commission advances per year
* $25 – 30,000 or more outstanding to agents (this spring alone)
* $4 – 5000 is your annual gross profit from this activity
* 3 – 4% cost of borrowing
* administration costs (until these funds are repaid)
* 1 deal down (with or without an agent departure) = Bad Debt + a Loss against gross profit
* High Risk
* No guarantee of return
When you advance commission today internally for your agents you may be left “holding the bag” (an empty bag at that).
Take a look at your numbers and your office and agent situation today. Maybe outsourcing your commission advance service is the best answer for you?
Just a couple of thoughts – hope they help!
May your agents’ deals be double-ended.