For residential real estate brokers, the Internet means cash-in-hand. Will commercial brokers be next?

The company is eCommission. The offering is a Web-enabled service providing real estate folks with their commissions in 24 hours or less, and up to 4 months before closing. The result is a steadier income for agents, plus one less headache for brokers who are hounded for cash.

As of this week, eCommission has signed up more than 1,000 real estate companies nationwide. This means that more than 30,000 real estate sales folks have access to the site, which this year expects to buy $30 million in real estate commissions.

Think it can’t happen in commercial real estate? Well, isn’t that what they said about online auctions and Web-enabled closing services?

“Technology is dramatically improving the way agents and brokers do business,” said John Bearden, CEO of eCommission Systems, LLC. “We see eCommission as an important delivery channel offering agents the consistent income they need to harness the latest technologies and maximize their effectiveness within the marketplace.”

eCommission claims to have signed exclusive marketing and distribution agreements with 80 percent of the top brokerage firms in the nation, plus some of the largest members of the RE/MAX franchise. In addition, Cendant (which includes Coldwell Banker, Century 21 and ERA), Prudential, RE/MAX of California & Hawaii and RE/MAX of Texas have all joined eCommission.

“Cendant has a strong tradition of providing only the best value-added services to our franchisees,” said Richard Smith, Chairman and CEO of Cendant Real Estate. “eCommission gives them an affordable mechanism for stabilizing their income flow, which we anticipate will result in increased levels of productivity for both our brokers and their sales associates.”

So here’s how it works. eCommission provides real estate agents up to 80 percent of their commission, or a maximum of $7,500 per transaction, up to 120 days before closing. The remainder of their commission is paid at closing. Agents complete an application online and receive notification of approval within one hour.

eCommissions are electronically transferred to the agent’s bank account, or sent overnight via check. Either way, an agent receives an eCommission in 24 hours or less. Agents without Internet access can also use eCommission by fax.

The worst that can be said of the site at this point is that it has availability problems – not unusual for a growing dot-com with a somewhat captive audience. Of course, there are fees involved. But when you live off of commission, sometimes that’s a non-issue. Cash flow is everything. Coming soon to a commercial brokerage near you?

In other news, Lend Lease Group is deservedly touting the performance of its Value Enhancement Fund I, which recently offloaded its last property. The sale marks the close of the fund, which had a one-year return of 70.6 percent in 1999. Total return since inception wasn’t too shabby at 32.6 percent.

VEF I was launched in 1993 at the end of a severe real estate market downturn when real estate was viewed as a risky investment. The fund initially raised $256 million and purchased 13 properties during its life. In the meantime, the real estate market has recovered, and investors have reaped the returns.

The fund was round-tripped three years ahead of schedule, with investors already receiving back their capital and then some.

Lend Lease Real Estate Investments is one of the largest real estate investment managers in the world and a leading U.S. real estate advisor to pension funds. The company has $35 billion in real estate and commercial mortgages under management for more than 500 institutional and private clients in the US. In addition, the group services some $50 billion of commercial real estate loans.

Published: July 3, 2000

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Lesley Hensell covers commercial real estate and financial issues for Realty Times. Based outside of Dallas, Lesley works with high-tech and real estate clients as an independent marketing and public relations consultant. She also writes for several publications, including the Dallas Morning News. E-mail Lesley at: lhensell@earthlink.net