A constant source of frustration for agents around the country is how long it can take to get paid on a closing. In some states, commission checks are cut and handed out at the closing table, so it’s probably not so much of an issue there. In my state, Virginia, we’re what’s known as a wet settlement state. This means that checks aren’t cut until the sale has been recorded, which legally needs to be completed within 2 business days of closing. This includes seller’s proceeds, realtor commission checks, and any contractors being paid out at closing. Because of this, there’s a built in one to day waiting period no matter what! Personally, I can’t stand it, and oftentimes for agents out there who are struggling financially, having to wait these extra days can be a real hardship. So getting your payment processed and into your bank account as soon as possible is a really big deal.
How Commissions Work at Most Brokerages
When we close a buyer side, the buyer’s settlement company will cut the check and oftentimes the agent will go to the title company or attorney’s office to pick it up, then bring it to their broker, and turn it in for processing. My experience at two firms prior to eXp was that those checks didn’t get processed the same day all too often, for various reasons, and I’d end up having to wait a day or two longer for my commission check to be processed. And if I wasn’t available to go get the check myself, I’d either have to go by the next day that I was available to do so, or ask for it to be mailed. Amazing how long it takes to mail something 3 miles down the road! A typical timeline on a buyer side may be 5-7 business days for me to actually get paid. On the listing side, the buyer’s settlement firm still cuts the check, so same process, except in my area it’s not uncommon for someone to close 30 minutes to an hour away, which means I need to take a large chunk of my day to go pick up that check or I’m just going to have it mailed. And half the time they don’t listen and it sits in their office for 5 days until I call asking where it is, and then they finally put it in the mail. Getting paid in less than a week on a listing often seemed like a miracle.
How Commission is Processed at eXp
At eXp, the process is a little different and I absolutely love it. There’s nothing I can do about the whole wet settlement state thing, so as long as that’s going on we’ll always have that delay, but the rest is awesome. During the transaction, eXp will send an email to the settlement companies with a “Commission Disbursement Authorization” or CDA as we commonly call it, and this document outlines the commission expected to be paid, including any admin fees, and provides instructions for what to do with the check once it’s cut. Here’s the great part, you never have to pick it up or wait for it to be mailed to your office. They all get mailed to an eXp PO Box for processing. You just need the settlement company to provide you with an emailed copy of the check and settlement statement as soon as they’re cut. Once you have those, you upload them into Skyslope (our back end transaction management system) and if all your other paperwork is in order, then they’ll most commonly approve your check that evening, process it, and you’ll see your commission in your bank account when you wake up the next morning. That’s what’s so great – they don’t wait for the check to arrive. You get paid right away with the understanding that it’s on it’s way! A typical scenario for me might be close on Monday, checks cut Tuesday at 2pm, uploaded shortly thereafter, approved by 5pm, money hits my account at 6am Wednesday morning. Biggest thing I need to remember is to make sure when I’m on the listing side that the buyer’s settlement company sends me a copy of the check and CD before they mail it off. That’s resolved with a very quick email right after settlement. Overall, I love the payment process at eXp. This was one of the first of many, little, unexpected, yet pleasant surprises when I moved to eXp!