Comparison of a Real Estate Agent and a Loan Originator
After being a real estate agent for a while you may be considering becoming a loan officer after having represented so many qualified buyers and someone else beats you out on the offer due offering above asking price or your buyer’s unattractive low down payment and contract terms.
Or maybe you’ve gotten tired of spending a lot of time spinning your wheels, talking to unrealistic sellers or buyers who become flaky when an offer is accepted and they back out.
Will I Be Happier as a Realtor or Loan Originator?
Realtors often juggle considerably more duties ….for example marketing their farm area, giving listing presentations, performing online marketing, giving estimates, showing properties in the buyer’s preferred neighborhood(s), follow-up with prospects, negotiating contracts, interacting with home inspectors, title company, real estate appraisers and escrow/closing.
However, as a mortgage loan originator (MLO as professional designation) you may work less, but if the realtor is showing homes to a prospect on a Saturday and they finally decide to make an offer at 5:30 pm the MLO will be the one they call to see if their buyer “can afford that particular house”. So, while you may not be driving clients around, you will be at the Realtor’s beck and call. Because that can be the difference between your realtor closing a deal or improving their driving skills and familiarity of neighborhoods in North OC and South Orange County.
Lately, some agents have heard other loan agents they work with say that they would prefer to earn 1% on a mortgage loan, than work as a Realtor and earn 2-3% on the sale of a house.
LO’s aren’t showing houses on Sundays; although some do sit in open houses.
Loan originators also can expand and limit their territory as they please by being licensed in more than one state or working throughout the state via the internet whereas a realtor is limited often to their own county due to logistics. Additionally, a loan originator may become a mortgage branch manager and employ multiple loan officers, to work under him or her and receive a cut of their commission for the branch.
Education/Experience Requirements for a Loan Originator
The qualifications for becoming a mortgage originator may include:
A background in sales or marketing; banking experience is very helpful
Familiarity with financing institutions, their lending rates and terms
Passed the national mortgage loan originator’s test by NMLS
Pass an FBI background check
Competent in mathematics
Excellent communication and interpersonal skills
A mortgage broker must have the ability to clearly explain in laymen terms financial methods and present clients with their options. Provide them with verbal and written information about how certain mortgage products apply to that consumer. Explain to clients how they can strengthen their credit to obtain better mortgage rates.
It is not an 8-5 job unless you are employed by a bank that defines your hours. If not working for a bank, like a realtor, it is not uncommon to receive calls on weekends or during week nights. A loan originator, for certain clients, will be required to spend the whole day searching for a lender that fits best for borrowers with unique financing needs, so persistence is essential in this field like it is for real estate agents.
Maybe you feel hiring loan originators is the solution to higher earnings. This may be true but for that you’ll need to have a net worth of $250,000 and a bond for $150,000. And don’t forget you must always be in compliance with federal and state regulations and maintain documentation, run reports, and be prepared for audits. Fortunately, Netbranch Nationwide has this covered for you and solved so you are allowed to grow your business and succeed. Get in touch with them if you want to become a mortgage branch manager.