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Surviving a Recession: 3 Tips for Real Estate Agents

Have a Marketing Plan, Diversify, Access Capital Financing Options

Surviving a Recession: 3 Tips for Real Estate Agents – As a real estate agent, it is important to be prepared for economic downturns. During a recession, there are always winners and losers, and there are steps you can take to ensure that your business is one of the winners.

business comparison with and without planning

Step #1: Have a Marketing Plan – Failing to plan is planning to fail. When the economy is expanding and everything is going well, it can be easy to get out of the habit of planning. But when markets contract, having a plan and executing your plan can help you survive and even thrive while everyone around you struggles.

Step #2: Diversify – It is always a good idea to have multiple income streams, but during a recession, it may mean the difference between succeeding versus having to close your company and get a job (if you can find one). Having a niche might work well during an economic expansion, but during a recession, a niche can dry up entirely.

Step #3: Access Capital Financing Options – Access to capital financing options can help realtors weather a recession by providing them with the financial resources they need to keep their businesses running. Realtors and brokers may need access to working capital to cover expenses like rent, payroll, and marketing costs. Closings might become further apart – capital financing can help you bridge the gap. Plus, when a recession happens, this is often the best time to get in on good deals while prices are low, but without capital financing available, you might miss the best deals.

Markets Fluctuate – this is normal. But it doesn’t make it easy. Recessions can make it challenging for realtors and brokers to adjust their strategies, diversify, find new deals, and stay in business. Nobody knows how long a recession may last or how deep it might be. But by taking these steps, real estate agents and brokers can prepare themselves for a recessionary market and ensure their businesses remain successful even when times get tough.

Surviving a Recession: 3 Tips for Real Estate Agents

Have a Marketing Plan

“Failing to plan is planning to fail.”

People who plan will always outperform people who don’t – particularly during recessions. You should develop a plan for how you are going to market your business, and you should follow the plan (making course adjustments as you go). A marketing plan should not be something you make and then throw in a file somewhere on your computer. You should refer to it often to make sure you are still on course and executing the plan.

It is important for realtors and brokers to have a marketing plan to survive a recession because during an economic downturn, the real estate market slows down, and there may be fewer buyers and sellers in the market, which increases competition between real estate agents and brokers for market share. This can make it difficult for realtors to generate revenue. Without an effective marketing plan, realtors and brokers risk losing potential clients to competitors by being “out-marketed.”

An effective marketing plan will allow realtors and brokers to focus on cost-effective methods of reaching potential clients like social media marketing, email campaigns, Search Engine Optimization, Google Ads, and targeted direct mail. By using these methods, realtors can reach a wider audience at a lower cost than traditional marketing methods like print, billboards, television, and Radio.

Highlight your unique selling proposition (USP)

differentiate or die book by jack trout

An effective marketing plan should clearly demonstrate the differences between your business and competitors and highlight your unique value proposition (USP). For example, a realtor may highlight their experience, expertise in negotiating deals, knowledge of local market trends, or their ability to provide personalized service to clients.

In the book Differentiate or Die: Survival in our Era of Killer Competition Jack Trout, a marketing strategist and author, and Steve Rivkin, a branding consultant, and author, explained why it is essential for businesses to differentiate themselves from their competitors in order to succeed. During a recession – being perceived as clearly different from the competition is critical to your success and should be an integral part of your marketing plan. If there is nothing special or unique about your business, why should a consumer choose you?

Build and Maintain Relationships

In addition to attracting new clients, having a marketing plan should emphasize the importance of building new relationships and maintaining relationships with existing clients. When times get tight, the best deals disappear quickly. By continuously developing new relationships and maintaining existing relationships, you position yourself to be among the first to learn about new opportunities as they arise so you can capitalize on them.

Business owners often overlook relationship building as a marketing strategy. Often, they see it as something they “just do” – or conversely, something they aren’t really good at and therefore do not focus much energy on. But in real estate, as in most businesses, relationships are often the very thing that determines whether your business thrives or languishes. Make sure your marketing plan includes strategies for relationship building.

Having a clear and well-defined marketing plan is essential for realtors to survive a recession. It allows them to attract new clients, differentiate themselves from competitors, build new relationships, maintain relationships with existing clients, and position themselves as trusted advisors in the real estate market. Remember – Failing to plan is planning to fail.


You should always be diversifying your business revenue streams. But once a recession begins, having multiple streams of revenue is more important than ever. The height of a recession is often the best time to buy real estate and enter new markets. Recessions have a way of “washing out” all the amateur real estate investors and may be the first time in many years that more deals are available and easier to capitalize on – you should be ready. But if you are tightly focused on things that worked well for you during expansion and fail to diversify, beyond missing deals, your business may not survive the recession.

Having a niche focus is great when everything is going well, but during recessions, realtors or brokers who have been too tightly focused tend to disappear entirely. There are realtors who have been selling lake homes around one single lake successfully for ten years – unfortunately, during recessions, those are the first types of properties to take a dive and tend to stay down longer than urban marketplaces. Those realtors and brokers may not survive a recession.

In addition, diversification can also help a real estate company take advantage of different market opportunities. For example, if the residential housing market is slow, a company with a diversified portfolio may be able to shift its focus to buying fix and flips or multi-family properties that have been too expensive to make sense for the last five years. This flexibility can help the company maintain profitability even in challenging economic conditions.

Be Flexible, Creative, and Open Minded

Realtors and brokers who are not creative, flexible, and open minded do not do well in economic downturns. Economic downturns can make you feel as if one day you woke up and none of your plans and strategies worked any longer. Everything you’ve been doing suddenly stops working, and no matter how hard you try, they never seem to work again.

Business owners who are not creative, flexible, and open minded tend to keep trying what worked in the past rather than trying something new. But you must be creative when times get hard. You must adapt and be flexible and open minded to change – otherwise, your career in real estate may come to a sudden end.

Remember – Diversify. It may be the difference between becoming wealthy when the economy rebounds versus being forced to take a job you don’t enjoy because you ran out of money.

Access to Capital Financing

We saved the best and most important tip for last. Having access to capital financing options for realtors is always important, but it is doubly important during a recession. You will need access to capital to cover expenses like rent, payroll, and increased marketing costs, and to take advantage of new deals at excellent prices.

You will also need capital financing options to “finance the gap” between finding new deals and closing on them. During the height of the real estate market in 2019 you might have been receiving checks from closings once a week or every few days. But during a recession, you might be closing on a deal and getting paid once per month (or less).

Because of this, it is important for realtors and brokers to have access to capital to finance the time gap between closings or to get access to cash while you are waiting on a closing (like using a real estate commission advance for realtors or brokers).

You will also need access to capital financing to keep taking on new deals while prices are down. Realtors and brokers who don’t make it a point to always be on the lookout for new capital financing sources may find the best deals pass them by to better capitalized competitors.

For example, if foreclosed properties become available at a discount, realtors may need access to financing to purchase and renovate these properties for resale. If you can’t get financing, you can’t get in on these deals.

Having access to capital financing options can also help realtors position themselves for growth once a recession ends. By investing in marketing and advertising during a downturn, realtors can build their brand, attract new customers, enter new markets, and take market share from competitors which can position your business for growth when the economy recovers.

As we mentioned before, recessions have a way of washing out weaker competitors. For the ones left standing, they are often perfectly poised to be the go-to business for customers because often there aren’t as many choices available after a recession.

Having Finance Options is Important for Realtors and Brokers

There are a lot of financial vehicles available for real estate agents and brokers, and it is important you know what they are and how they work. You should do your best to always have multiple sources of capital financing available to you.

You should not trust your future growth to any single source of financing or any single institution (although it is often the case that agents build relationships with just a few financiers they know and trust, who know and trust them).

Finance Options Infographic

Finance Options May Include:

  • Bank Loans
  • Credit Cards
  • Lines of Credit
  • Private Equity Investment
  • Selling Shares of Stock
  • Selling Bonds
  • Angel Investment
  • Mortgaging Assets and Converting them to Cash
  • Real Estate Commission Advances
  • SBA Loans
  • And more!

It is important to know how each of these financing options work, how to gain access to them, and to begin building solid business relationships with the financing firms who offer them. Over time, your best financiers will come to know you well, trust your judgment, and become more willing to offer you options for financing your business growth.

Why Having Multiple Financing Options is Critical for Realtors and Brokers During a Recession

You should never rely on a single source of financing for your real estate business or brokerage, but this is especially true during a recession.

Most people think a recession is a mythical thing that just comes along every so often and wreaks havoc on the real estate market (and everything else). But the bottom line is, recessions are caused by increased interest rates. As interest rates rise, people can’t afford their monthly payments and prices must decline until they can make their payments again. This makes prices decline on major products like homes.

A lot of people know this – but what most people don’t know is that inevitably, along with increasing interest rates, come “tightening lending standards.” This is a fancy way of saying that banks and credit card companies loan less money – and the money they do loan becomes a lot harder to get.

If your business has been relying on a single source of financing from a bank, and that bank decides to tighten its lending standards, you may find yourself in a situation where you took out a loan yesterday, and the next day the same bank won’t loan you a dime (even though nothing about you or your business has changed). It happens a lot during recessions.

This is why you should never be overly dependent on one single source of financing. You should always be building relationships with new banks, but also with private equity investors who often have tons of cash sidelined during recessions and are looking for investments.

You should also be figuring out how to use SBA backed real estate loans. When banks tighten lending standards, they may be more willing to make loans if those loans are “backed” by the government. Using the SBA for loans isn’t easy. There is a lot of paperwork and red tape to cut through. But when times are tough, you do what you have to do to keep going, including learning how to apply for and secure SBA backed loans.

Agility and Flexibility in Finance

Agility and flexibility are important when you are considering financing options. If you need to secure a large amount of capital in a short period of time to get in on a real estate deal (or multiple real estate deals in the same week), you need financing options that are fast and flexible.

Banks are some of the most powerful financial institutions in the world and they control a great deal of the wealth in the world today, but they are not generally known for being agile. They tend to be somewhat more risk averse than a private equity investment fund might be (but not always). And during a recession, they become even more risk averse.

This can have the effect of making their underwriting less agile. Unfortunately, the best opportunities rarely wait. During a recession, although deals may be everywhere, they still go fast. If a deal is good enough, someone is going to show up with a check and close the deal while you are waiting for someone else to loan you money.

But other investors, like private equity or real estate commission advance companies often have different lending standards than banks, making them faster, and much more flexible. As an example, a real estate commission advance company can get your money in your bank in as little as 48 hours after your application is received.

How Real Estate Commission Advances Work

When a recession hits, one of the things that tend to happen is there are fewer closings, and they are further apart from each other. This can leave realtors and brokers on the sidelines while they wait for their next paycheck at closing.

One way to get your money faster is by using a real estate commission advance to get your money right away instead of waiting until closing.

When you sell a home, you are owed your commission. That commission is considered an asset – just like a stock or a bond is considered an asset. And just like a stock or a bond, you can sell your pending real estate commission to a real estate commission advance company and get some of your money now, rather than waiting for closing which could be months away.

The way this works is: You sell the commission you are owed to the real estate commission advance company at a discount. You get your money right away. They wait to get paid at closing. It is as simple as that. You get some of your money now, and they get paid to wait. This arrangement allows you to get cash flowing into your cash account faster which can keep you going during tough times.

What Is the Difference Between a Realtor Commission Advance and a Bank Loan?

A real estate commission advance is not like a bank loan in any way. A real estate commission advance does not require a credit check and does not require monthly payments. The fee structure is much different than that of a typical bank loan. Also, a real estate commission advance doesn’t accumulate daily, monthly, or yearly interest like loans do.

In fact, a real estate commission advance is more like selling futures (puts and calls) than it is a loan. You are selling an asset (your pending commission) at a discounted rate, and the people you sell it to receive their money at some designated date in the future and make a profit.

Credit Checks Are Not Used in Commission Advances for Real Estate Agents

In the underwriting process real estate commission advance companies don’t check your credit. They do however check for liens and judgments before they enter into an agreement.

They do this to make sure they can collect their money at closing and there are no other lien holders who have a priority claim against the commissions they intend to collect at closing; however, your credit score will not stand in the way of you getting approved.

Why do Real Estate Agents Use Commission Advances?

Commission advances are funds provided by a commission advance company to the agent or broker before the final closing meeting. Real Estate Agents often use commission advances as a finance option to free up working capital. These funds can be used to cover marketing costs, legal fees, and other expenses associated with closing real estate deals.

One of the biggest advantages of using a commission advance is the ability to access funds quickly. Instead of waiting weeks or even months to receive your commissions, you can get some of your money in as little as 48 hours. This can give you the reprieve you need to keep going when times get lean (like during a recession).

Summary – Surviving a Recession: 3 Tips for Real Estate Agents

Recessions are a reality of doing business, but there is a lot that realtors and brokers can do to prepare themselves. By having a marketing plan, diversifying your business, and making sure you have multiple access points to capital financing, you can survive and even thrive during an economic downturn.

Have a Marketing Plan – Have a plan and follow your plan. Failing to plan is planning to fail. Develop a marketing plan and make sure you execute your plan. Yes, you can and will need to adjust your plans. But once you adjust, go back to executing your plan.

Diversify – Businesses that do not diversify don’t do well during recessions. Being over focused in one area may work during times of easy capital and lending, but when things tighten, often niche markets are decimated. If you only have one egg and one basket, it is too easy to take heavy losses you can’t recover from.

Access Capital Financing – Access to capital financing options can help realtors weather the storm during a recession by providing them with the financial resources they need to keep their businesses running and even thriving. You will need capital to take on new deals and bridge the gap when the times between closings widen.

During a recession, it is critical for realtors to adjust their strategies, diversify, find new deals, and stay in business. Nobody knows how long a recession may last or how deep it might be. But by taking these steps, real estate agents can prepare themselves for a recessionary market and ensure their businesses remain successful even when times get tough.

Often a recession means that things that used to come easy are going to be much more difficult. You need to be creative, flexible, and open minded. You need to work hard and keep making moves – if something doesn’t work any longer, then try something else. And if that doesn’t work, try something else, and keep trying until you find a winning strategy.

About Accel Real Estate Commission Advance

We are a direct funder, not a broker like most real estate commission advance companies. Because there’s no middleman involved, our fees are among the lowest in the industry, as we pass our savings on to you.

We factor numerous asset classes, helping attorneys, professional athletes, business owners, and of course real estate agents and brokers. Let Accel finance your next Real Estate Commission Advance.

Frequently Asked Questions about Real Estate Commission Advance

Question: Is there a minimum size commission that you advance Real Estate Agents?
Answer: There is no minimum size commission, but the minimum fee is $300.

Question: Is there a maximum size commission that you advance?
Answer: Yes. The maximum amount is $30,000.

Question: Are there any reserve holdbacks?
Answer: Yes, there is a 10% reserve holdback on every advance.

Question: Are there any administration fees?
Answer: There is a $30 wire fee for any outgoing wires. Agents can opt to receive funds via eCheck for no charge.

Question: Are there any application fees?
Answer: No

Question: Do you advance brokers of record?
Answer: Yes, on a case-by-case basis.

Question: Can I advance more than one deal at a time?
Answer: Yes

Question: How much of my Commission can I Advance?
Answer: Up to 80% of the net commission is due to the agent.

Question: How quickly can I get my advance processed?
Answer: Advances are processed in 48 hours or less. The majority of advances fund the same day.

Question: Are your advances restricted to a closing within 90 days?
Answer: Within 120 days.

Question: Do you require a minimum size deposit?
Answer: No