Pay Upfront vs Pay at Settlement.
When a vendor approves a property marketing campaign, the next question is how they will pay for it. Learn the difference between paying upfront and paying at settlement, and how to explain each option clearly to vendors.
When a vendor approves a property marketing campaign, the next question is how they will pay for it.
The two main approaches are:
- Pay the marketing costs upfront
- Use an approved pay-later option and repay at settlement
Both can work.
The right option depends on the vendor's circumstances, available cash and the payment choices offered by the agency.
Paying upfront.
Paying upfront is the simplest option.
The vendor pays the agreed marketing costs before the campaign begins or as invoices are issued.
This may suit vendors who:
- Have funds readily available
- Prefer to pay expenses immediately
- Do not want to use a funding facility
- Want to avoid additional funding fees
- Are comfortable using their savings for the campaign
Once the marketing costs are paid, the campaign can proceed.
Paying at settlement.
A pay-at-settlement option allows eligible vendors to fund approved marketing expenses now and repay the amount later.
Property.Credit, for example, offers a property advertising solution where approved advertising costs can be funded before the sale and repaid at settlement. Eligibility, fees, lending criteria and terms apply.
This may suit a vendor who has equity in the property but does not want to use available cash before the sale settles.
The difference.
| Pay upfront | Pay at settlement |
|---|---|
| Vendor pays before or during the campaign | Approved costs are funded before the campaign |
| Uses the vendor's available cash | Can preserve the vendor's cash |
| Usually no funding cost | Funding fees and conditions can apply |
| Payment is dealt with early | Repayment usually occurs later |
| No application for funding required | Approval and eligibility requirements apply |
Neither option changes the marketing campaign itself.
The difference is how and when the vendor pays.
Why a vendor may choose to pay upfront.
Paying upfront can be suitable when the vendor has enough available cash and wants to keep things simple.
For example:
- A vendor has approved a $5,000 marketing campaign and has the money available.
- They pay the advertising invoice and the campaign begins.
- There is no funding arrangement to manage.
Why a vendor may choose to pay later.
Not every vendor wants to use their cash before settlement.
They may already be paying for:
- A deposit on their next property
- Moving costs
- Repairs
- Styling
- Furniture hire
- Legal costs
- Mortgage payments
- Pre-sale improvements
In these situations, paying at settlement may provide another option.
Property.Credit states that its property advertising product can fund upfront advertising costs, with repayment at settlement under the approved arrangement.
A simple example
Two vendors approve the same $6,000 marketing campaign.
Vendor A
- They have sufficient savings.
- They pay the $6,000 upfront.
- The campaign begins.
Vendor B
- They would prefer to keep their savings available.
- They apply for an approved pay-later option.
- The marketing costs are funded and later repaid under the provider's terms.
The marketing campaign can be identical.
Only the payment method changes.
Pay later does not mean free.
This needs to be explained clearly.
A pay-at-settlement option is a funding arrangement.
The vendor still pays the marketing costs.
There may also be:
- Funding fees
- Application requirements
- Maximum loan periods
- Eligibility criteria
- Repayment conditions
- Other provider terms
Agents should use the provider's current approved information when explaining these details.
What happens if the property does not sell?.
This will depend on the provider and agreement.
For example, Property.Credit states that its standard maximum loan term is six months. If the property has not settled within that period, repayment or another approved arrangement may be required.
Agents should not make assumptions about what happens after a certain period.
Check the current provider terms.
The agent's role.
The agent's job is to explain the available choices clearly.
That does not mean telling the vendor which financial option they should use.
A simple explanation may be:
“The marketing campaign is $[amount]. You can pay the campaign costs upfront, or you may be able to use an approved pay-at-settlement option. I can show you how each option works.”
The vendor can then decide which option suits them.
Questions the vendor may ask.
Be ready for questions such as:
- When do I need to pay?
- What fees apply?
- Do I need to apply?
- How long does approval take?
- What happens if the property does not sell?
- Can I repay early?
- Can I fund only part of the campaign?
- What happens if the campaign changes?
For provider-specific questions, use the provider's approved information.
Keep the choice separate from the campaign.
The marketing recommendation should come first.
Then discuss payment.
A practical order is:
- Agree on the marketing strategy
- Confirm the campaign budget
- Explain the available payment choices
- Let the vendor choose
- Complete the required paperwork
This keeps the conversation focused on the property and the campaign before discussing how it will be paid for.
What agents should avoid.
Avoid presenting pay-later funding as:
- Free advertising
- A guaranteed approval
- The best option for every vendor
- A way to spend more than the property needs
- Something the vendor does not need to understand
The vendor should know what they are agreeing to.
The payment choice should be clear before the campaign starts.