Who has it better ? Realtors or Loan Officers ? (buyers agent, commission, contract)

[LiptonGuy]

Who has it easier ? Realtors or Loan Officers (mortgage brokers) ?

I've heard many loan officers say, that they would rather earn 1% on a mortgage origination, than work as a Realtor and earn 3% on the sale of a house.

I think both jobs have its Pros & Cons:

It seems like a new loan officer could begin earning money, more quickly, than a Realtor. LO's don't spend a lot of their time spinning their wheels, talkng to unrealistic sellers or flaky buyers. After some period of time in the business, LO's could develop relationships with several Realtors, that send them regular business. LO's aren't showing houses on Sundays; although some do sit in open houses.

Loan Officers do have a lot of competition in the industry. Plus, internet originations are increasing, year by year. There seem to be less restrictions placed on Loan Officers, in the area of preliminary classes, licensing requirements and continuing education. And a loan officer could become a mortgage broker and hire several loan officers, to work under him and get a slice of the pie from everyone.

Realtors seem to juggle a lot more tasks....ie Personal marketing, Listing Presentations, Internet Marketing, Pricing, Showings, weekly or bi-monthly follow-up, Price Reductions, Contract Negotiation, dealing with property inspector, title company, real estate appraiser and Closings.

Many Realtors work long hours; working lots of evenings and weekends. And then they answer their cell phone at 9:30 at night, when Mary Jane calls, because she wanted to know what color the wallpaper was, in 1 of the 5 houses they looked at earlier that day.

It is more difficult for Realtors to start their own brokerage, with its own sales agents. Many Realtors believe that working under a system like Remax, is a better alternative to owning your own company (without all the headaches). A Remax agent could hire their own buyers agents, contract coordinator and closing agents, to give them more time to spend on critical areas of the business. But it seems like top producers, could earn very...very nice incomes.

I personally think that a mortgage originator (or mortgage broker), might have a more balanced life and enjoy more career satisfaction.

It would be interesting to hear some statistics on turnover, for both fields. I thought I read something a few years ago, that said that for a group of agents that get licensed this year, only 20% will still be in the business in 5 years. I've also heard people say that 10% of Realtors do 90% of the business. It would be interesting to hear what the ratio would be for Loan Officers.

Anybody have any opinion or commentary on this subject ?

Also, has anyone ever gone from selling residential real estate, to selling commercial real estate ? What are the major differences ?

[rwally]

"It seems like a new loan officer could begin earning money, more quickly, than a Realtor. LO's don't spend a lot of their time spinning their wheels, talking to unrealistic sellers or flaky buyers."

Really? Try dealing with realtors that tell you they’re very interested in discussing the benefits of working together then two days later won’t return your messages. Or the ones that encourage applicants they send to you to request a GFE so they can shop it around to get a 1/8 of a point lower or $100 less in closing costs deal.
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"After some period of time in the business, LO's could develop relationships with several Realtors, that send them regular business. LO's aren't showing houses on Sundays; although some do sit in open houses."

Unless you're willing, and financially able, to commit to a year or longer to build your business network, don’t start. Although I don’t know what the statistics are for originator fall-out, I would venture to guess it’s more than 50% by the end of the first year. And I work seven days a week. When my realtor business partners are working, so am I. If the prospect they’ve shown twelve houses to on a Saturday finds one at 4:30 pm that’s just right but $30,000 more than what the husband and wife had been talking about spending, I’m the guy that answers the “can they afford this house” question. And that can make mean the difference between my business partner buttoning-up the deal or playing chauffeur again all afternoon Sunday.
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"Loan Officers do have a lot of competition in the industry. Plus, internet originations are increasing, year by year."

Web-based competition doesn’t really come into play that often, at least not for me. The increased competition I’ve seen is partly because of the sub-prime collapse and partly because of the rise in interest rates from the lows a few years back. Many potential buyers can’t qualify since lenders have raised standards and refinancing business has slowed because many people think it only makes since to do so if they can shave 2% off the loan rate. The net result is a mad-dash chase for the remaining 'A' paper business.
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"There seem to be less restrictions placed on Loan Officers, in the area of preliminary classes, licensing requirements and continuing education. And a loan officer could become a mortgage broker and hire several loan officers, to work under him and get a slice of the pie from everyone."

Yea, well wait till you see what congress cooks up by year-end to raise the bar on originator qualification, continuing education and application disclosure standards. A few bad apples in the originator barrel have caused a real firestorm that will, in turn, cause a lot of good people more time and expense just to maintain their current business status quo. And if you think hiring employees is the ticket, you’ll need a net worth of at least $250,000 and a performance bond for $150,000 to hang a shingle. Plus all the regulatory compliance – documentation, record keeping, reporting and the most enjoyable part, surprise audits.

Add to all of this the general public’s perspective that ALL originators are untrustworthy and that mortgage loans are a commodity that they know as much about as the originators and you’ve got yourself a ballgame. And if that’s not enough, many of the borrowers you work with will show little meaningful appreciation even when you've bent over backwards to get their hair-of-the-dog complicated deal done. Oh, and lest I forget, you'll get more basic training to become a barber than you will to become an originator. Aide from these few things, the origination biz is a boatload of fun.

[Rmx Christina]

I don't think RE is "that" easy...but I would hate to have to crunch numbers and handle too much of the financial side.. I would think that LO have tighter deadlines than RE guys have...i would never want to be LO though...

[shellytc]

rwally, I agree with you. You LO have a tough time. I work with some great ones and that keeps my business ticking. they have to answer their phones all hours of the day and night to make sure they get the deal. If I have a hot prospect that needs that increase in loan amount, and "rwally" doesn't answer his phone, I will have to call the other guy...

Shelly

[RyanPKull]

In terms of who has it EASIER, the LO has it easier than the REA.

Remember also, to acquire leads..that LO can do REFINANCING AND PURCHASES.. Some LO's can do loans in all 50 states depending on the bank they are with.

Us REA's are restricted to leads from one state unless we pay to get licensed in another.

In terms of work, REA's I would say still have in harder than LO's. A lot of work is involved when trying to put together a deal.

An LO can punch in a scenario and say YES IT CAN WORK, or NO IT CANT. Other than that, deal directly with the buyer to retrieve necessary docs.

REA's deal with everyone, keep EVERYONE happy, keep the deals smooth and yell at people when they need to be yelled at. The REA also does the commuting work! Most LO's do not attend closings..

Believe me, I love my LO's to death, but I will argue with them all day to determine whether WHO HAS IT EASIER! =)

Ryan P. Kull

[DBrennan]

Working as a loan officer has its advantages in some ways. The hours for me start at 6am and end around 11 pm. i have a decent pipeline of business that keeps me going. True the regs are getting crazy, and the start of HVCC and loan officers and realtors losing deals to inexperienced appraisers, makes this business harder. realtor in my eyes, has it maybe worse, and for this reason only. Forget about the showings and time spent, thats been the job for years. Today, the realtor has to wait for answers on their files, and depending on whom their working with, it can go great or sour. I guess I would rather be in the loop and work the file, than wait for an answer. Communication with the realtor is so important, and letting them know what to expect from the start will help in your relationship down the road. I never forget one thing, a realtor don't get paid unless we close a loan. I like to help train realtors and teach what to look for. FHA,VA,USDA, Converntional. I remember I spoke to a realtor one time and they stated the loan officer had an approval, with a FTB through a conventional loan. I looked at the loan and the ratios where 58%. The one thing the realtor and the loan officer did not understand was that lender had a 45% back ratio, so an approval does not mean much today unless you have the correct product. Frustrating times, but slow down and work together and win.

[scott911]

Realtors have it easier and can make way more money. Someone that is a professional at listing properties can make way more money doing pretty much nothing. They will have hundreds of local realtors working for them to sell the property. All they have to do a couple of times a week is email the seller or call them and give them updates. Posted from someone who made 360k last year hitting expired listings. Good luck

[SmartMoney]

I think Dodd-Frank made the playing field a bit uneven with Federal Regulations and an agency breathing down the necks and pocketbooks of loan officers. Yes, Realtors have peer oversight and state regulation, but this thing with the CFPB has added a layer of nasty oozing garbage. Banks now apply techniques from their security staff to trap their employees doing wrong (mostly the big boxes). Example, one big bank recently pulled a fire alarm in a building.....in the name of security, anyone that didn't property shut down AND lock up their computer was issued a warning, a suspension or termination (depending on other infractions). That's not every bank, but many feel we are heading that way......and when you have to defend yourself against your in-house security, you know it's getting ugly. But the more important issue: loan officers are entrusted with personal, very private customer information and the security alone that goes along is a heavy weight.

My pipeline last year included about 20 real estate agents. The lowest 1099 was in the mid 100's. The highest, well over 7 figures. But everyone that wanted to work hard, earned good money, whether they were LO or REA. I don't think either one works harder, they work different. I work hard to earn a loyal following, by keeping better track of my agents' customers than they do and alert them when their clients are on the lookout again. And the customers that no longer have active agents get referred to my loyal Realtors. I design my own home grown newsletters that are packed with upcoming changes or sales strategies to find one more transaction. I make it worth their while, not to keep dialing for someone else to answer the phone. My tagline is "If you are working this weekend, so am I," so you can bet I am easy to reach. I want people to call on weekends and it doesn't have to be to give me a loan. It can be a question when they can't reach their in-house lender. Eventually, it will come back to me, all in good time.

[agandhi]

This thread started in 2007 when originating was much easier and was a leveled played field. 2014 -- I would say realtors definitely have it much easier -- minimal to no regulations directly impacting them as it does loan originators, with CFPB/Financial Reform, commission reductions, requirements of QM and "ability to repay", re disclosure requirements, its nuts!

--- Realtors need to get a grip and understand that financing is not as easy as it was a few years ago and LO's are working 3-4x as harder for the same deal and less pay per deal. I've been an LO for a few years now and luckily do rather okay through the relationships gained but still stand that realtors have it better, even had a few LO buddies flip to the realtor side and say they find it rather easier...

--Just my two cents and many will probably not agree which is why this is thread!

[2bindenver]

When is the last time you heard a LO was attacked or murdered?