Far removed from the glittering penthouses of Manhattan or the sprawling estates of Palm Beach, hundreds of thousands of agents pound a humbler pavement.
Those who sell detached $400,000 single-family homes in quotidian suburbs or prefabricated condos in commuter towns frequently run into problems, especially if they’re still building a consistent stream of deals. Commissions on sales might not arrive by the time bills for rent, utilities, car payments or child care are due.
That’s what happened to Andrea, a single mother who had been selling homes in the desert heat of El Paso, Texas, for 15 years when a deal fell through in 2019.
“It just kind of caught me in a bad moment where I had things to pay, you know, just obligations, bills, things like that,” she said.
Andrea, who requested anonymity out of fear of retaliation, grew up in El Paso and had worked at ERA Real Estate once before, recently returning for a second stint. When she needed money, the head of her brokerage, Doug Van Nortwick, suggested with Southwest Commission Advance, who provided her a cash advance on other deals that had yet to close. At the time, this was a “godsend,” she said.
Like anyone else who needs money, agents can budget, dip into savings, take out loans, run up credit card balances or lean on friends and family. They have one other, increasingly visible option: Take out a commission advance.
Firms offering them have become ubiquitous at industry trade events and in brokers’ inboxes. Their products are somewhere between merchant cash advances and payday loans, offering cash upfront against future receivables, which in this case are the agent commissions on a pending contract.
The advances can be a valuable lifeline. But when the deal that secures them doesn’t pan out, or agents find themselves borrowing repeatedly, small financial holes can turn into big ones. Interest payments, late fees, liens and lawsuits quickly accrue for the agent who doesn’t make required payments.
It’s a long way from El Paso to West 57th Street, but as the overall industry grapples with how agents get paid following the NAR settlement, the two are closer than they appear.
Even agents who market top-tier penthouses — or bring their buyers — run into payment problems, getting into skirmishes with their brokerages or other brokers over vesting periods, commission splits or delayed payments. Often, the agents most affected are the newest, and if they take advances they can wind up paying to break into a career that promises millions but often provides pennies.
Meanwhile, commission advance companies and their competitors have proliferated amid industry changes that could leave more agents in need of quick cash. Newer companies promote themselves as tech-forward and insider-y, but they continue to operate in the same unregulated gray zones, away from the cumbersome regulatory standards for traditional loan or credit card companies.
It’s hard to track the industry, or how widely advances are used and how many end in lawsuits. There are some hints it is growing. In New York, a handful of firms appear to have been filing liens against non-paying agents more aggressively in recent years. From 2022 to 2024, three of the more active companies — Premier Commission, Concord Commission Advance and Commission Express through its franchisees — filed 103 combined liens on average per year, triple the amount from 2019 to 2022.
Nailing down the scope, ownership and historical trajectory of these companies can be difficult, as they often reorganize or change names.
Premier Commission managing principal Ashley Joffe cautioned against making too much of that metric, since there are all kinds of reasons for liens. “How many advances are done by any company, and volumes and all this type of stuff, [it’s] very, very tough to get this data.”
Beyond the larger players, there are hundreds if not thousands of smaller firms offering advance-payment services to agents in need with little to no oversight.
Once Andrea started with the advances, it was hard to stop. She continued to use the service on nearly every deal for the next several years, but when she tried to pause payments after realizing Southwest Commission Advance had been taking out more money from her closings than she expected, she was slapped with a $19,000 lawsuit, which included covering Southwest’s attorney fees, according to public records.
“They give you some kind of relief at the time, but it’s just a slippery slope,” she said. “It’s just so dangerous. I will never do that again.”
Van Nortwick said he “did not consent to being reported on,” but noted that Southwest Commission Advance stopped doing business less than a year ago as it “didn’t make money.”
Band-aids
Brokerage heads can see the value of letting agents leverage future deals for cash today.
“They perform a useful function for some people that are newer in the business, some people that have a string of unexpected delays or interruptions in their transactions,” Bill Lublin, CEO of Century 21 Advantage Gold in Pennsylvania said, echoing the sentiments of several others.
The time from contract to close, which used to take months, can still take 30 days or longer, and gets held up by inspections, negotiations or mortgage approvals. Contract cancellations can be as high as 15 percent in residential real estate, so agents’ finances dance on a razor’s edge, leaving some in need of quick cash.
“We are big proponents that agents need advanced commissions,” said R New York CEO Stefani Berkin. “The closing could be delayed — if it’s a co-op, or if there’s a financing or underwriting issue, it could take a little longer. So if they need more of that money up front or prior to the close, then that’s totally fine with us.”
Brandon Wright, who runs a startup geared toward providing agents with lines of credit, points out that the current financial system is not constructed for individuals getting a handful of lump-sum payments a year, rather than regular deposits.
“You’re taking people at their most vulnerable spot, and you’re giving them the opportunity to bury themselves deeper — but it’s not a credit card, you can’t declare bankruptcy from this.”
“The whole financial economy is built for salaried professionals,” he said. “All of your bills are due monthly, your credit rewards you for making on-time monthly payments. And there’s this underlying assumption by the financial services industry that you’re getting paid every two weeks.”
The misalignment between the finance industry and the real estate world is reflected in the numbers. The average real estate agent carries $25,000 in credit card debt, more than double the average American, according to Wright. Agents also hold nearly six credit cards compared to a general population average of about four.
Agents needing to smooth out their income streams have created a hole that commission advance companies have been more than happy to fill.
In Andrea’s case, the referral from her brokerage head turned out to be little more than a kickback. According to public records, Van Nortwick is the registered owner of Southwest Commission Advance, something Andrea said he never disclosed.
“Had I known that he had a hand in [the company], I wouldn’t have taken the money,” she said. Van Nortwick repeatedly told her he would “talk to them and see what they want to do” when Andrea raised concerns about how much money was being taken out of her checks.
(Van Nortwick claims he did disclose his relationship, which he referred to as “helping manage it.”)
Payback
Commission advances are not loans, but if they were, the interest would often land in the high double digits.
The contracts have a lot of fine print. Often, they offer agents a grace period — usually two weeks — after the closing date to come up with the money, or a small daily fee gets tacked on to the bill. Firms make UCC filings that give them a continuing security interest in and lien upon not only current and future commissions, but all the personal assets of the agent.
For example, one North Carolina agent who declared bankruptcy in 2020 was on the hook for just under $11,000 after taking out advances of $6,000 in 2018 with SELH Dix Hills, another name for Concord Commission Advance. The total consisted of the original commission, commission fee and a $13.10 fee for each day she didn’t pay back the money. Buried in the bottom of the contract was a clause making the agent liable for an additional 33 percent of the total amount owed, depending on attorney’s fees, collection costs or court costs.
The commission advance firms are quick to pursue non-paying customers and take them to court.
Once Andrea tried to stop paying, somebody named Adrian Pena began texting her in July 2023. Pena informed her that a company called Commission Holdings had purchased from Southwest Commission Advance a pending $11,700 commission on a two-story spec home on the outskirts of town and filed a UCC against it.
While she was trying to sort out his demands and understand exactly how much she had coughed up in the past two years and to whom, she was sued by Southwest Commission Advance for allegedly not paying back $16,500 in commission advances and fees.
The companies often follow a common playbook in the merchant cash advance world and obtain a confession of judgment as part of the original contract, where an agent confesses in advance that they owe the money being claimed and waive any right to appeal.
“When you’re in a pinch, you’re kind of desperate,” said New Jersey agent Ronda Tolliver. “So you’re like, I’ll take out a little amount, but then…when it’s time to pay back, it’s pretty much double of what I just borrowed.”
Tolliver, who took out an advance of $4,000 in 2017 with Concord Commission Advance, faced a repayment of almost $10,000 in 2020, according to court records. That figure included penalties and she settled with the firm for $7,200, according to Concord Commission Advance.
“They’re obviously bottom feeders,” Marc Caputo, a New Jersey lawyer who represented a client fighting one commission advance firm. “They’re coming after distressed businesses and individuals.”
A shiny finish
This reputation hasn’t diverted entrepreneurs from the space, and in recent years, new competitors have entered the business, including RLTYco, a Serhant-backed startup that provides agents with health, tax and legal support as well as commission funding. RLTYco raised $20 million in series A funding at the start of this year.
The branding is modern compared to the drab web 1.0 feel of many of its ilk. CEO and co-founder Briggs Elwell described the commission advances of the past as an “unprofessional business.”
“A lot of smaller entities were issuing, in many regards, noncompliant loans or advances to agents with very unfair terms,” he said, adding he believes his platform has “the best pricing,” which varies depending on agent profile but can be as low as 3 percent of a purchased commission.
In the 2023 bankruptcy case of a Corcoran agent, RLTYco deducted anywhere from 6 to 15 percent of the agent’s purchased commission (the 15 percent deduction came on a deal to cover previously unpaid commissions), and was allowed to pursue 125 percent of the purchased commission if the agent violated the agreement. While unable to provide specifics due to the nature of the settlements, RLTYCo told The Real Deal that it had pursued this kind of solution three times out of “thousands” of transactions. The company filed 26 UCCs in New York last year, all of which place liens on “all assets” of the agent, according to the filings.
Elwell said the filings are a “last-ditch” recoupment effort, and estimated that default rates are in the single digits. “We do our absolute best to exhaust every effort and work with the customer and even pursue a payment plan or alternate options prior to doing things of that nature,” he said.
Brandon Wright’s startup, called Tongo, integrates with brokerage sales platforms and gives agents access to credit lines where they can draw up to 75 percent of the total volume of pending transactions.
Wright says he doesn’t charge any fees for late payment, just a carrying cost of “as low as 3 percent” on the drawn credit. He would not say how high those carrying costs could get but is still tweaking the business model.
“As our cost of capital comes down, we’re going to be more aggressive [in lowering] our fees,” he said.
Unlike commission advance companies, he insists, his goal is to help agents across the credit spectrum. His customer base is as likely to have a credit score over 700 as it is to have one under 700, he said.
Some call foul on the whole business.
“They’re all bad,” said Keller Williams’ William Krooss-Tadas. “You’re taking people at their most vulnerable spot, and you’re giving them the opportunity to bury themselves deeper — but it’s not a credit card, you can’t declare bankruptcy from this.”
For Andrea, the $19,000 Southwest claimed she owed would have been too much of a burden to fight, she said, and she settled out of court. She admits she could have been more fiscally conscious.
“I should have read, and I should have been more aware, and I should have questioned,” she said.
The saga also impacted her beyond her financial livelihood. She split with her most recent husband, the breakup partially due to the financial strain of the advances. Her 17-year-old daughter dreams of going into real estate law after witnessing her mother suffer from the advance payments and lawsuit.
Andrea, who has since left her firm and opened up her own brokerage, said she has put the ordeal behind her — except for the $500 check she still writes, once a month until 2027, to pay back the advance.