Do-Brokers-have-to-sign-Commission-Advances title

Do Brokers have to sign Commission Advances?

A common question commission advance companies get is “Do Brokers have to sign Commission Advances?”.  The answer is yes because legally under the contract the Broker is owned the commission.  You and the broker have a sperate agreement outlining your split.

The agreement you sign authorizes the purchase by Express Cash Flow of a portion of your commission for a particular sale at a discount, after any split or balance owing to your Company.  This is why brokers have to sign the commission advance agreement.  In doing so, brokers are confirming that the net commission due the agent is sufficient to repay the commission advance. 

Any Liability or Risk to the Broker?

There is no risk to the broker for signing the commission advance if it’s a standard transaction and under contract.  If there is fraud, mis-representation or collusion between the agent and the broker then that’s a different issue.  If the transaction falls through the agent must notify Express Cash Flow and must replace it with another pending transaction or make payments until the balance is paid in full.    If the commission is inadvertently disbursed to the broker in full, it is the broker’s responsibility to ensure that the balance is paid to Express Cash Flow before the agent receives their portion of the commission. 

Ownership of the Commission

The brokerage legally owns the commission when a transaction closes and then has an agreement between their agent, usually independent contractors.  The agreement outlines the split between the agent and the broker.  Therefore, the commission advance agreement that is signed by Express Cash Flow and the agent must also be signed by the agent’s broker.

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