It's good for you..but not for me..I am exempt! (RE agent, appraise)

[deuterdu]

Originally Posted by rcarrillo

I think some agents are paid too much for what they do, some not enough. Its all about what they provide for that fee.

As for why loan officers are (sometimes) paid less.... no clue. There were plenty of loan officers charging 4-5% in yield spread by steering customers into riskier products or pre-payment penalties that were not suitable. Both Realtors and Lenders should have a duty to advise their clients of their options and act in their best interest.

We had too many "salespeople" in it to make a quick buck and not in it to advise and consult clients about their financial options. Accountants, Financial Planners and every industry has their share of "salespeople" versus "advisors". I think in the last few years both real estate and mortgage financing tipped the balance towards the sales aspect.

I actually hope there will be serious changes in the way business is conducted and fees are done. I like YSP (when used properly, so should clients) and this is a profitable and rewarding business for me. Change can be painful, and we will need to adjust but I think in the end we will be better for it.

Thank you. This is the first intelligent and honest answer. I agree that those who misuse YSP should be removed from our industry. Same with agents who steer their clients into the highest priced home that they can qualify for. Amazing when i go to fraudblog.com there are an equal amount of real estate agents and loan brokers going to prison for fraud.

[deuterdu]

Originally Posted by TuborgP

Now we know how we got in the mess we are in. Right out of the mouth of the culprit.

I'm not in a mess nor are my clients. Are you caught up in this mess?

[deuterdu]

Originally Posted by magellan

Mortgage brokers in California make 1%?!! What a ripoff! What exactly do you do to make $2000+ per transaction?

Well let's see, first the average loan amount in California is 400,000 so that would mean I make double.

I put forth the same amount of effort in marketing, pricing and processing the loan. Both of our jobs require effort. I know because I am also an agent.

Here's the kicker Any person can represent themselves in a real estate transaction but they cannot originate their own loan.

A real estate agent can handle a real estate transaction but you cannot do your own loan.

I can do your job, a regular person can do your job (without E&O protection) but neither one of you can do my job. Hmmmm....so what do you do that warrants $10,000?????

[deuterdu]

Originally Posted by Bill Keegan

I'm a big fan of and believer in the free market system. In such a system, the market will eventually figure out what a fair fee is for a service performed. The market has decided that at this point in time, what I do warrants a higher fee than wha you do.

The market has decided? No, this is based on the old system. There used to be only a few loan products available and they were at the bank. Clients would sit down in front of a kid who didn't know much and would get quoted the rate that the branch manager told them to quote. Thus spawned the "you are paying too much" attitude. Since then loan programs have expanded into so many that it would make your head spin.
That being said, a good educated loan broker warrants a good fee for service performed. Being an agent and loan broker I have handled purchases, sales and loans. I have found that both professions demand the same amount of effort to sustain so therefore an agent does not warrant a higher pay than a loan broker.
I really have no problem with a real estate broker making the money they make. The income is usually inconsistent, we all have marketing costs and overhead. I just find it amazing that the real estate agent mentality about loan professionals is so unjustified.

[Poltracker]

Originally Posted by deuterdu

So why is it that those of us with the same or more education than the agent should make but a fraction of what they make? We too have marketing expenses, offices, receptionists, E&O insurance,licensing, phone etc..

Your marketing and other expenses are there to promote yourself by attracting customers and selling your product. An Realtor's marketing and other expenses are there to promote and sell their client's product.

If you want to compare it evenly, the banks would be your client as you are selling their product to a consumer, so they should be the ones paying you more. Not the consumer in this case.

[Mike1306]

Originally Posted by deuterdu

Well let's see, first the average loan amount in California is 400,000 so that would mean I make double.

I put forth the same amount of effort in marketing, pricing and processing the loan. Both of our jobs require effort. I know because I am also an agent.

Here's the kicker Any person can represent themselves in a real estate transaction but they cannot originate their own loan.

A real estate agent can handle a real estate transaction but you cannot do your own loan.

I can do your job, a regular person can do your job (without E&O protection) but neither one of you can do my job. Hmmmm....so what do you do that warrants $10,000?????

How long does it take you to process a loan from start to finish?

Being most loans in Florida close in an average of 1 month and most listings are averaging 5-6 months to close you have a basic answer right there.
There is much more work involved for a realtor and alot less cost involved for a mortgage broker.

[deuterdu]

Originally Posted by Brandon Hoffman

Lenders have far less work per transaction, have a team under them to complete the transaction(processors, underwriters, etc.), don't have to pay as much in advertising, and can close many more transactions per month than an agent. It's not the origination fee but all the other junk fees that get slapped on the loan that can create issues. Apparently you've been called out for padding your fees, what other junk fees do you throw in there?

Moderator cut: personal - off topic
Less work per transaction? Let's see...place a property on MLS and wait for the phone to ring. oh wait, put a couple of flyers in the box! Whew..that wiped me out. I need a day off. Oh here comes an offer a month later I better read it and explain it to my client.

Of course this isn't correct about your job as an agent. Your comment about a loan brokers responsibilities are incorrect too.
I know plenty of agents who have "transaction coordinators" who assist them. That is because they have high volume-an indication that they are good at what they do.
I have done your job so I know how much work it entails. Have you ever originated loans? Of course not, you are not AUTHORIZED nor knowledgeable in how to do a loan properly. Funny how a person can represent themselves in a real estate contract but cannot do their own loan.
As far as advertising I could buy a house every year with my advertising commitments so your comment is unwarranted.
I know agents that close more transactions than some loan brokers. Should they drop their fee to 1%?

Junk fees. Most of the junk fees are 3rd party fees. We charge a broker fee. You can talk to the appraiser, attorney and lender about these "junk fees"
If you compare all of my company's fees (not 3rd party fees) against your fee, you are three times more expensive. I don't have to throw in junk fees since you have already bled the seller for 5% of the sales price.

[Bill Keegan]

Originally Posted by deuterdu

The market has decided? No, this is based on the old system. <SNIP>
That being said, a good educated loan broker warrants a good fee for service performed. Being an agent and loan broker I have handled purchases, sales and loans. I have found that both professions demand the same amount of effort to sustain so therefore an agent does not warrant a higher pay than a loan broker.
I really have no problem with a real estate broker making the money they make. The income is usually inconsistent, we all have marketing costs and overhead. I just find it amazing that the real estate agent mentality about loan professionals is so unjustified.

You don't sound like a free market guy, but rather like an equitible distribution guy. Clearly we disagree.
Yes, the market has decided. And if that's wrong, the market will adjust. As it always does.
In fairness, I had never thought much about what you (loan brokers) make & why. Now that I have, here goes.
First, you don't do a ton of work "HOPING" to get the business. Someone comes in, sits down, maybe even calls instead of coming in. Usually because a real estate recommended they do so, by the way. Within a short while, you know if you are working with them or not. If & when you & they decide you are working with them, then you have to do all that that professional work you told us about. Valuable stuff, and yes, very difficult. You do NOT spend hours, days, weeks, even months searching for the right house, visiting dozens, taking pictures sending reports, taking them out looking at houses whenever something comes to market that might work, negotiating several offers that don't pan out and one that finally does, all without any sort of guarantee of payment. I do.
In short, I take a much greater risk. I put myself out there, taking the chance that all my work goes totally unrewarded, for any of a variety of reasons. Hell, my buyer could love me & the work I do, think I am the greatest thing since sliced bread, but if, 5 months into the search, his company decides he's working in Toronto instead of Bridgewater, I'm still screwed. You're a finance guy. You understand risk/reward ratios. There ya go.

[Bill Keegan]

Here's a question for you, deuterdu;
You've stated that you are qualified to both sell houses and sell loans.
You've made it abundantly clear that those who sell real estate make more money than those who sell loans,
Why are you still selling loans instead of real estate?

[deuterdu]

Originally Posted by Mike Peterson

How long does it take you to process a loan from start to finish?

Being most loans in Florida close in an average of 1 month and most listings are averaging 5-6 months to close you have a basic answer right there.
There is much more work involved for a realtor and alot less cost involved for a mortgage broker.

Okay, now we are getting somewhere. Thank you for your comment. Some loans are processed quickly and efficiently. I have had loans processed and to docs in less than 1 week. For those loans I keep the fees low. Some loans are problematic. Less than perfect credit, work history issues. I have spent 4-5 hours a day for several days working intensly to find the best terms for my client. There are many lenders who cannot do these loans so it's back on the phone, I courier the rep the loan application, credit, documentation etc.. to be told it cannot be done. Sometimes this process can go on for some time. There are instances where the loan file is submitted and the underwriter disagrees with the appraisal. Now you must coordinate with the appraiser to find comparables to justify the value. Now that some time has gone by the lender needs updated pay stubs the lock is close to expiring the attorney still has not provided the prelim etc.. There are many variables that can cause some loans to take alot of effort to complete.

My question to you is when properties where being listed and sold in a matter of days during the real estate boom, did you reduce you fees since it didn't take much time to close the deal or did you charge the normal fee?
If you didn't reduce your fee during a quick closing then your basic answer has no merit.