We all know the classic problem in real estate: the misalignment between time and money. You go to contract on a sale, but you’re waiting on closing for three weeks or longer. You need funds for marketing or support, but don’t have them.
Your options are:
- Miss out
- Run up your personal credit card
- Tap emergency savings
- Ask your broker for an advance
- Give up to 30% of your commission to a predatory commission advance company
As a broker, I hated seeing my agents pay high fees to get their commissions sooner. Coming from fintech, I was surprised by the disconnect between standard financial practices and real estate commission payments.
Not all money Is the same
In virtually every other industry, professionals access invoice factoring at reasonable rates. The math is simple: If waiting 30 – 60 days for payment prevents you from taking on business that could generate returns greater than 5%, factoring is smart business.
Yet in real estate, this option doesn’t exist at reasonable rates. Agents use personal credit cards or HELOCs between closings. The commission advance industry exists, but with terms that would make a payday lender blush—creating a perception that agents seeking early access to commissions are struggling.
The industry mindset that “only broke agents need this” misses the point. Using financial services to grow your business is a different mindset altogether.
Bringing smart money to real estate
We started Upfront to create modern financial services for the real estate industry. Here’s what that means:
- Agents matter. The first product we created helped agents solve the time-money mismatch problem. Agents at our partner brokerages access their commissions the moment they go to contract for low fees. If you’re carrying a credit card balance or drawing on a HELOC, we’re definitely better. The agents using our platform aren’t broke; they’re smart. They use their future cash flow to invest in their growth and future.
We also recently announced our national healthcare portal for brokers and their agents, because financial health isn’t just about cash flow. We’re not stopping there. We’re working on tools for agents to manage their deals, save for taxes, track their expenses and much more.
- Brokers matter. Our partner brokers are able to offer immensely valuable services to help them recruit and retain agents and teams while increasing their revenue. We believe in bringing down costs by bringing services in-house.
- Financial services help agents and brokers. Well-designed financial services are like rocket fuel for superstar agents, teams and brokerages. It lets them do more deals, make more money and build toward a financially stable future. Upfront is here to power agents and brokers to maximize their potential with financial services tailor-made for real estate professionals.
If you believe in the future of this industry and want to help change things for the better, and from the ground up, reach out to us. We’re here to build a better real estate industry for brokers, their agents and the clients they serve.
Mukund Venkatakrishnan is the co-founder and CEO of Upfront. For more information, visit https://www.myupfront.com.
