• July 10, 2013

Earlier Pay Days for Estate Agents

Earlier Pay Days for Estate Agents

150 150 Prevance - Bridging Finance South Africa

House sales are set to grow in 2010 but this could mean further delays for estate agents expecting commission.

After the dry spell experienced in the housing market over the last months, new sales are a much needed and welcomed injection into estate agent’s pockets, having to wait months to receive their commission however, puts a damper on the increase in sales.

There is a solution however, Prevance, a division of Chester Finance, offers estate agents an alternative to waiting for months on end for their commission, explains Jeffrey Froom, executive at Prevance Bridging Finance.

“Prevance offers bridging finance to estate agents, where once an agent has made a sale and all the necessary documentation relating to the purchase of the property is in order, Prevance will assess the transfer, and if successful, they will advance the amount to the agent which they would normally receive at completion of the transfer process,” says Froom.

After prices and sales experienced a drop due to the 2008 economic downturn around the world, house sales have been steadily on the increase again since mid 2009, with prices rising and banks relaxing their requirements on mortgage loans.

Says Froom, “This however means more paperwork moving through the deeds office and in turn starts slowing down the process, causing delays in the finalisation of home loans.”

With more property transfers going through the deeds office a backlog starts developing, causing longer turnaround times proportionate to the increase in sales. Further, process updates and system changes at the deeds office may further delay transfers and associated payments.

“A typical transfer of property will take on average approximately three months, but this can be extended if there are additional changes to the agreement, if the deeds office is overextended or at different times of the year. Selling property towards the end of the year means that you can often lose an entire month over December when many firms close, pushing mortgage finalisation out to four or five months.”

“For estate agents who have to wait until the entire transfer process is finalised in order to receive commission, it can often be a very long couple of months. Providing them with a means to receive the funds at the time of sale greatly facilitates their cash flow,” concludes Froom.

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