by Michele Newbern Gillis
Staff Writer
How would you like to get part of your commission before closing to use to market other listings?
Now you can.
Commission Express is a provider of working capital to real estate agents and brokers located in Duval, Nassau, St. Johns, Baker, Union, Bradford and Clay counties. Commission Express will advance up to 82 percent of the net commission due an agent or broker.
The typical transaction is a $5,000 or $6,000 funding of a portion of a commission on a sale closing within 30 days.
“Typically, our customers work with us about four times a year to fuel their business,” said Don Mullinax, owner of the Northeast Florida franchise.
Here’s an example.
“You sold 123 Maple Street and have a net $6,000 commission due in 30 days,” said Mullinax, who bought the franchise in March 2008. “You call Commission Express to convert part of your commission into $3,000 in working capital to use today at a total cost of $292.”
The $292 is deducted from the commission due to the agent upon closing and retained by Commission Express as a fee.
Mullinax said working capital is an asset to any business.
“If you don’t have working capital, you are essentially out of business,” he said. “If small businesses don’t have working capital to market their business, they tend to diminish. Our typical client is someone who is a professional in real estate. They’ve been in business for six, eight or 10 years.
“In a normal market, they are earning a six-figure income. My clients are agents who know how to use capital effectively. Our market is not new agents.”
In addition to handing out capital, Mullinax said the company also gives advice to help agents be more successful.
“Our goal really is to make our clients more successful because it reduces our risk at the same time,” he said. “The more successful our clients are, the less risk that we have.”
What if the sale doesn’t go through?
So far, Mullinax said that has not happened since he’s owned the franchise in Jacksonville. But, if it does, obviously you need to pay the money back. They do offer a 30-day grace period on the settlement date if needed.
He said you can use the capital to market your best listings aggressively to generate another sale.
“If there is an opportunity for an agent to use working capital today, normally it wouldn’t be available to them for 30 to 60 days,” he said. “We give them the opportunity to get that capital in hand to market other listings to make another sale.”
Mullinax said he underwrites the transaction with the agent and gets a copy of the accepted contract of the sale, Multiple Listing System printout of the property and a copy of the lender’s pre-approval or approval letter.
Commission Express is re-paid from the settlement agent when the first sale closes. The funding is not a loan as the receivable is underwritten on the strength of the sale and probability of the closing.
Currently, they fund about 30 transactions a month.
“We do some as low as $2,000 and on the high end, we’ve done transactions for $30,000,” said Mullinax. “We have provided over $385 million in working capital to agents and brokers. Nationally, the company has been in operation since 1992.”
Mullinax has over 25 years experience in mortgage banking, real estate title and the banking industry.