How to Get Paid Directly From Escrow
Transcript from the podcast episode:
Greetings agents. I’m using a different microphone this time to eliminate that creepy background noise that was in the first recording, so hopefully the audio quality is better. We’re still testing things out. All right, so the topic of this podcast is how to get paid directly from escrow and what we’ll do is look at a typical scenario, the traditional scenario and then the difference of being paid directly from escrow. So in a standard scenario, the escrow is going to send the check to the real estate office and escrow companies typically overnight it, but I’m seeing more and more of snail mail and letters with commission checks in it. I don’t know why. Probably asked for companies are trying to cut costs either way, the check arrives here at the real estate office. Now when the check comes in the same day, we scan that check and we send a copy to the real estate agent so they have a record of it and provided the paperwork is done.
We immediately cut a check to the agent and what I do almost daily is drive these these letters down to the post office. The reason is that there’s a noon pickup at the post office, there’s a 5:00 PM pick up at the post office. I just think things get processed faster down there and it kind of expedites the whole, the whole process. I know that dealing with correspondence all the time with different real estate companies and then mailing us checks, sometimes someone will say, oh, we mailed it such and such day and then it takes several days to arrive and I’m just imagining someone taking a a letter and putting it up, you know, at the front desk and then that person might take it down maybe that day or maybe the next day and maybe they take it down, mail it at 2:00 PM but the mail carrier comes through at 10:00 AM and so now it sits in the office park mailbox for a day or God forbid this happens on a Friday or sits there a whole weekend.
I just don’t like those delays and that’s why I personally take our mail down to the post office to make sure that it goes out. When it does, it arrives very quickly at the agent. So that’s what we do in a traditional scenario. And already there we are much faster than other brokerages, but there’s a faster way. And I know that agents want to be paid as fast as possible. It’s common sense, right? And agent’s worked for weeks, probably months with or with their client. They’ve done all this work, they haven’t been paid yet. Now the property is closed, the transaction’s closed. Why would they want to wait any longer if they don’t have to? So there is a faster way and the faster way is being paid directly from escrow. Now here’s how it’s different. So the broker signs a commission instructions in escrow.
And then what we provided that the agent’s paperwork is squared away. We send a CDA commission disbursement, authorization to escrow signed by an officer of the corporation. In this case myself, and this instructs escrow to split the check, due the brokerage. So the brokerage will receive a portion, Balboa real estate. And then of course the agent will receive their portion do. And, and that of course cuts out all the time of escrow, having to send a check to our office and then our office having new cut a check and send it back to you. So I mean it, it’s not a huge amount of time. It cuts a cut out of the process, but a solid couple of days at least I would say. Now here’s something to consider. In order to have a CDA done, a couple of things have to happen. Number one, the file must be complete in advance to recording.
So what an agent should do is go to www.turbotransaction.com, make sure they have their paperwork in there and then before the escrow records, towards the end of the transaction, the at the agent’s going to click a button, the green submit complete file button, and that’s going to send a notification to the office that that the file needs to be reviewed. And then someone at the office will review the file and send an email back to the agent. Now if there are missing items, the email is say, dear agent, your files missing, document x, Y, and Z, please upload and click that green button again to let us know that you’ve been in there and you’ve updated the file or you’re going to get an email. Dear agent, thank you. Your file is complete if you get the complete email, then you have the green light to go over to Balboa team.com/CDA so it’s our company URL forward slash, CDA.
That’s the commission dispersement authorization I was talking about and in there there are fields that you fill out so that we can create a CDA that instructs escrow to to pay you directly. Now there are a couple policies that have changed over time. We used to not have that CDA page on the website, but I added it because I wanted to avoid any sort of misunderstandings in terms of what the gross commission is or how much the agent expects to receive and all of those terms have to be addressed on that page. Second, I’ve actually instructed our office administrator to send out a CDA. Two with the agent as well to have the agent initial the CDA because again, I don’t want there to be any surprises. The process needs to be transparent the whole time. So then we send that off to escrow. Now it’s important to note that the file must be complete in order to get this CDA.
The reason is that the file is incomplete and the commission’s been paid, then it’s very difficult, very difficult to get those outstanding documents. We essentially become like bill collectors here and this is just something that we’ve experienced firsthand through trial and error over the years. I mean, a lot of what works at Balbo works well because we’ve done trial and error and those of you that have known the company for years and years, you’ll, you’ll know that our commission plan has changed over the years. Little things have changed always for the better. And, and that’s based on trial and error. What works and what doesn’t, what causes problems, um, and what, uh, makes things run smoothly. So there you have it. That’s what you need to do. Just make sure your paperwork’s in order. Now there’s another thing to consider that is if you use an inhouse transaction coordinator, you are always entitled to getting a CDA.
Why? Because again, that that compliance factor of paperwork, we know how it’s been addressed with the Trent, with an in house transaction coordinator word we’re taking, we’re assuming all that responsibility of document collection and your outsourcing the paperwork, right? You’re having another trend, you know you’re having a transaction coordinator step into the do all the leg work for you. So the paperwork should be as good as done. And if we’re the company, assuming that responsibility, it’s as good as you’ve submitting a complete file in, in, in our eyes. And so for that reason, you’re entitled to a CDA. So the transaction coordinator is going to offer a CDA to you if, if you want to be paid directly from escrow. So keep in mind that if you use an inhouse transaction coordinator, you also can, can get a CDA, your files as good as complete. All right, I think that will conclude today’s episode. Thank you.
