Commission advance companies, loan sharks or helping hand?

Real Estate Broker/Owner with Tutas Towne Realty, Inc and Garden Views Realty, LLC BK607690

Commission advance companies. Loan sharks or helping hand! Nine years ago when TLW and I opened Tutas Towne Realty, Inc., we did it on a shoe string. Actually, I guess it was more of a goose egg, than a shoestring, since we didn't have any money. We opened our business on pure determination and a prayer. We had a lot of confidence, since we had both been in the business for a few years, working for a management company. TLW and I were the only Realtors in the company. Since the company we worked for did short term vacation rentals they did not need a Real Estate license. They had an out of area "rent a Broker" who did nothing more than qualify the company. So TLW and I were on our own. I did all the sales and she took care of all the marketing. We were pretty smart from day one and did a lot of advertising for ourselves and just had the company name in fine print as required by law.

Anyway, a few years into this, we tried to purchase the management company, with the backing of several investors. Unfortunately, this deal fell through, at the last minute, so we decided to leave and do our own thing. So we left and opened Tutas Towne Realty, Inc., in our home. The good thing was, I took all of my listings with me. At that time I had 20 houses and about 50 lots on the market. So we were up an running. The only bad thing was, all the money we had, was spent on incorporating and getting signs. Most of this was put on credit cards. So here we were, new business owners with lots of listings, lots of signs in the ground and no money. But you know, it was very exciting and we were up to the challenge.

Still, we had bills to pay and we needed money to continue our advertising. Our goal was to run our little business as a big corporation and spend lots of money on advertising. We knew this would payoff in the long run. Well, needless to say is was a struggle. We knew if we could just hold on and sell some of our listings we could make it over the hump. We needed cash. As anyone knows that is in business for themselves, cash flow is a must. No cash. No flow. It's as simple as that.

That's about the time I saw an ad in Realtor magazine for a commission advance company. Now this sounded interesting. If I could write a deal and place a property pending, this company would advance me 80% of the commission, for a price. It would cost us, but we could get a check within 24 hours. I liked it. I liked it a lot. There was light at the end of tunnel. Over the next couple of days I wrote a deal on a duplex, I had listed, and decided to test out this commission advance scheme. Well folks, it worked! I sent them a copy of the purchase contract and the next day we received a check for $4,000. We were off and running. We ended up doing this a couple more times, and before we knew it, we were over the hump. Our pipeline was full and we never looked back. Without this company we may not have been able to get our business jump started. So for us, they were a much needed helping hand.

There are quite a few commission advance companies available to Realtors. Some require no qualifying and some you have to complete an application and credit approval process. The non qualifying programs obviously charge the higher fees. The fees vary, but you can count on paying between $300-$500 on a $4,000 advance if it is paid back in 30 days or less. The fee structure varies with the length of the loan. If for some reason the deal doesn't close you can normally substitute another property closing or you have a certain amount of time to pay them back the money. These are basically paycheck advance companies for Realtors. The money is very expensive but can offer a short term solution to a cash flow problem. Here are some links to a few different companies if you are interested in getting more details.

Now folks, just so you know, the interest on these advances, if you figure it out, is real, real high. Like 100% to 200% annually. So they are not a long term solution to money problems. They can, however, be a viable short term solution to cash flow management. They are not for the faint of heart. So read up on them and see if it may be something that can help you get over the hump.

So, commission advance companies, loan shark or helping hand? What say you?

Posted by


Join Our Facebook Fan Page Check Us Out On Google+ Follow Us On Twitter


***I am NOT an Attorney nor do I play one on TV. Click the button below for my Bio.

The BIO for Bryant Tutas


 Tutas Towne Realty, Inc handles Florida real estate sales, Florida short sales, Florida strategic short sales, Florida pre-foreclosure sales, Florida foreclosures in Kissimmee Florida Short Sales, Davenport Florida Short Sales, Haines City Florida Short Sales, Poinciana Florida Short Sales, Solivita Florida Short Sales,  Orlando Florida Short Sales, Celebration Florida Short Sales, Windermere Florida Short Sales. Serving all of Polk, Osceola and Orange Counties Florida. Florida Short Sale Broker. Short Sale Florida.

 Copyright © 2017 | All Rights Reserved

Comments (55)

S. Leanne Paynter ☼ Broward County, FL
United Realty Group, Inc. - Davie, FL
Davie, Plantation, Cooper City & Weston Specialist
Bryant, if there weren't a market for these services, those companies wouldn't exist but I, for one, am tired of having to delete their spam e-mails and dump their unsolicited letters.
Dec 04, 2006 05:14 AM
Suzanne Marriott
Keller Williams Arizona Realty - Anthem, AZ
Associate Broker, CLHMS, e-PRO
Bryant - Great Blog - And I agree - these companies can be great ways to load level cash flow in the real estate business.
Dec 04, 2006 05:50 AM
John Hruska
Homes Charlotte, LLC - Charlotte, NC


Thanks for the tips.  I was always curious how these companies operated.  Sounds like a good SHORT TERM solution for some.

Dec 04, 2006 07:34 AM
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert
Bryant, a draw versus commission is common in the mortgage industry, but I did not realize that Realtors are able to get commission advances on their listings.
Dec 04, 2006 09:08 AM
Christine Forgione
1 - Whitestone, NY
Associate Broker
Excellent Post Bryant.  Scary though.  I don't think (Remember I am a NY) that I could ever trust something like that though.  I think that I would probably use a credit card first and pay back.  To me a credit card it just "buying me 30 days"  I charge and use and pay all back.  I dont have much cash on me (I have the buring a hole in my pocket syndrome).  If there is a time that I fail to pay all of my charge back - I remove the card from my wallet.  I refuse to use it.  I hate credit card balances but use credit cards 95% of the time.  So, what I am saying is if you know that you are going to have a closing - it might be better to link a credit card to a checking account and do a transfer if you have to - in tight situations and then when the check comes pay that back. 
Dec 04, 2006 11:56 AM
Bryant Tutas
Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL
Selling Florida one home at a time
Hi Christine, I'm fortunate I don't have to worry about these things anymore. But at the time, I only had one credit card and it was full. Things were very very tight. WE could have maybe stopped spending money on advertising but when you first get started in business that's the last thing you want to do. However I knew with 70 listings I just needed to buy some time. And it worked.
Dec 04, 2006 12:13 PM
"The Lovely Wife" (Broker Bryantnulls Wife) The One And Only TLW.
President-Tutas Towne Realty, Inc. - Kissimmee, FL

"Christine aka NY Chic"...I didn't trust it at first. Naturally I read all the fine print. Now bear in mind we had lots of listings when all this happened. Add that to self control and hard work and we had a good game plan. :) TLW...ROAR!

Dec 04, 2006 12:20 PM
Christine Forgione
1 - Whitestone, NY
Associate Broker

BB and TLW - the key term would be SELF CONTROL.  I can say that I see alot of my agents in my offices that spend before they get.  and I am NOT talking about on advertising - they tend to pre spend and by the time the closing comes the money is gone in three folds.  If by chance that for some reason the deal does not close  - LIKE TODAY - the agent is filled with panic - LIKE TODAY.  The agent paid bills BEFORE they even got the closing check - KNOWING that I cant pay them for 3 more days.  So now they have in theif gut - fret.  I hate this.  I will admit - I prespend - I know where my closing money is going to go - but I do not write anything until I have the CLEARED bank check in my hand. 

IF like you said have SELF control - then yes - I would agree, but if one on my agents came to me and asked me to sign off for them - I would have to refuse. 

NOW, you were in a different situation than most of my agents - you had listings and more than one deal going - some of my agents.. don't. 

I think that the situations are apples to oranges and you two work as a team - and TLW has a gun, so - I highly doubt that either would spend more and get into a hole.  But my agents just might.  Get my drift?  I totally get yours.  And like BB said at the time it was needed to be done and it worked in your favor! 

Dec 04, 2006 12:33 PM
Angus in Naperville IL
RE/MAX of Naperville - Naperville, IL
Broker Bryant _ I cringe when I see the terms... but there were times early in my career when I needed my credit cards to get through the winter... and would run out of room... blind faith and determination are what kept me going. Sometimes this business is not for the faint of heart, especially when you are broke and trying to build it.
Dec 04, 2006 02:15 PM
Margaret Rome Baltimore 410-530-2400
HomeRome Realty 410-530-2400 - Pikesville, MD
Sell Your Home With Margaret Rome

Bryant, You saw the challenge and you found the solution. And the RE industry is fortunate to have you!


Dec 04, 2006 03:47 PM
Peter Andres - Lic. in FL & NY GRI,SRES,CNE
REALTOR - The Villages, FL
I know a few friends who tried this and were happy they did. I was always afraid to try it and had decided that the easiest option instead was to work on rentals which paid fairly quick.
Dec 04, 2006 04:05 PM
"The Lovely Wife" (Broker Bryantnulls Wife) The One And Only TLW.
President-Tutas Towne Realty, Inc. - Kissimmee, FL

"Christine aka NY Chic"

I understand perfectly what you are saying. Without self control or discipline with a cash advance they are financially screwed.

I would not sign off if they had no deals either. How in the world will they pay back the cash advance? No collateral there. :)

It is so important for new agents to understand that spending before they fill the pipeline will not work.

Hey they can always file bankruptcy and start over. :) Ha. Ha.

Bet I could have talk you into signing off. I have another Ha Ha for that one. :) I could give you my guns as collateral!  

TLW "The Lovely Wife"...This Is A Touchy Topic. Cool Or Is That But?...ROAR!

Dec 04, 2006 08:40 PM
Silvia Dukes PA, Broker Associate, CRS, CIPS, SRES
Tropic Shores Realty - Ich spreche Deutsch! - Spring Hill, FL
Florida Waterfront and Country Club Living

Enlightening, I've been getting e-mail solicitations (which I usually delete) but it may have caught my attention if I was in a bind.  If used as a tool, anything can work, just know how to use it and be disciplined about it.

Dec 05, 2006 10:10 AM
Steve Goff


 You might want to add the folks at to your list, I just settled my second advance from them. Besides getting me through a tough patch, they were very responsive and really seemed to appreciate the challenges that realtors face.

Feb 18, 2007 02:24 AM
Bryant Tutas
Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL
Selling Florida one home at a time
THanks Steve, I happy to hear you had success with them as well. A commission advance was eesential when I first started my biz. I very handy option if handled correctly.
Feb 18, 2007 03:03 AM
Rosemary Brooks
BMC Real Estate - 209-910-3706 - Stockton, CA
The Mother & Daughter Realty Team

Will keep this in mind.  I have learned allot of what we "need" vs "want" during this -- no cash flow time.  I have actually gotten used to cutting back and back and back and I still manage to have a smile on my face and in my heart because I know that God has my back.  So I am pretty good at relaxing and letting tomorrow bring me "whatever".  I know its already alright.

I have noted the commission companies and I will use them if I need to and will pass on the information.  Again,you have shared a good tip with us.

You are so right, this is our business and we have to be smart about how we run it. Resources are key.  Thanks.

Aug 09, 2007 11:27 PM
Shaun Ramos
M.A. Allen Realty Group - Denham Springs, LA
This is a service that I certainly would be interested in.  However, it would be very scary for me.  In my 4th month of business (July) I had 5 closings scheduled.  Not a single one of them made it to closing... I ended up with zero.  At this point in my career it would have ruined me if I had taken out this type of loan.  I'm very low on cash, and only had 2 closings that next month (totaling about $3800.00 in commissions). 
Sep 03, 2007 05:16 PM
Jim Paulson
Progressive Realty (Boise Idaho) - Boise, ID

Brian, I have a friend that approached me on starting a commission advance company so I ran across your blog while doing my research.  I appreciate your insight.

Jul 17, 2011 07:15 AM
Rosemary Brooks
BMC Real Estate - 209-910-3706 - Stockton, CA
The Mother & Daughter Realty Team

Thanks for the heads up.  In this market some advance money sounds good. But glad we have people that went there, done that and have a story to tell to us when the little voices are saying .... "just do it".

Jul 17, 2011 08:44 AM
chris moates
W.E. Ruth Real Estate, Inc. - Kent, WA

I used a service later in my business.  I wished someone had told me about this ability when I first got started, since I was on a shoestring as well.  Going to your broker and requesting a favor is not the route I preferred. I didn't experience the high interest rates, since the debt was paid within 60 days.  This service is really good for new agents just starting out or someone that just has a huge void in the pipeline.  I felt my success came by doing a few things.  Always have a few scheduled closings in the pipeline in case the one transaction falls through, don't use anyone who requires you to fill out credit information.  The good companies know it doesn't matter.  Find someone as local as you can, so you're not dealing with 1-800 numbers and someone in India.  Make all your payments directly out of Escrow so your office doesn't have to deal with the paperwork and cutting extra checks.  Develop a really good template for processing a deal like this and an arrangement with your broker. (if your broker has issues, find another broker) And always keep the advance company in the loop on the status of the transaction.  After all, you are building a reputation with them.  Finally, I will offer this service in my brokerage once set up.  It's a great tool if used wisely.

In Seattle I used a company called Commission Express.  The gentleman is Michael Goodheim (you can google him)  He charged a flat fee on an 80% advance, minus a small hold back.  I used him atleast half dozen times.  They like 30 day closings and all contingencies removed.  I used him on land and residential sales.  He was very discreet and professional if any information had to be verified with Escrow or a lender.


That's all I have.

Nov 12, 2014 02:58 AM