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Because you are not "central" to the real estate deal. A good real estate agent is, and facilitates and manages all the ancilliary services like closings, inspections, carpet cleaning, staging, mortgages, contracts, offers/counteroffers, marketing, showings, etc.. You can't have a mortgage without a house, but you can have a house without a mortgage.
And if you actually have buyers and sellers coming to you first, and then you set them up with an agent, then sure you can say "that guy charges too much".
If you are really traveling that much to process loans, you're being taken advantage of.
DMenscha, it doesn't matter if you care how much your mortgage guy makes. It matters to the client and the consumer.
Actually I travel that much because it builds more business fom other professionals. I don't have to, I want to. It sets me apart from my competition and offers me the chance to find good REO's for sale in different areas.
So I was wrong. It is several days for you not even a month.
And yes, when the market was moving quickly we often did have to negotiate down in some instances.
So I guess we agree then that my basic answer has merit.
If you consistently reduce your fees on an easy quick deal then yes you have merit. Based on the posts I have read loan officers are expected to give it away on every deal and some agents are not except "in some instances"
I really haven't heard a really good reason for this imbalance in our industry. I have not heard a solid justification for the higher income derived on each deal. It will be interesting to see what happens in the future with the feds and the regualtory laws. I am done on this post. Although I have most likely made some enemies from this thread I think it was worthwhile. To all of you who conveyed your feelings whether i agree or disagree, thank you and best wishes for all of us in real estate this year.
If you consistently reduce your fees on an easy quick deal then yes you have merit. Based on the posts I have read loan officers are expected to give it away on every deal and some agents are not except "in some instances"
I really haven't heard a really good reason for this imbalance in our industry. I have not heard a solid justification for the higher income derived on each deal. It will be interesting to see what happens in the future with the feds and the regualtory laws. I am done on this post. Although I have most likely made some enemies from this thread I think it was worthwhile. To all of you who conveyed your feelings whether i agree or disagree, thank you and best wishes for all of us in real estate this year.
A couple of observations;
First, I haven't seen or heard all the animosity from real estate agents aimed at loan brokers as you seem to suggest exists. At most, I have seen real estate agents, myself amongt them, advising that our buyer clients in need of mortgage money talk to more than just one, as prices & services may differ, and you might be able to save some money by using that guy instead of this one. No hate, no slamming, no insistence that the mortgage guy is trying to rip you off, better watch your purse.
Second, there isn't an imbalance "in our industry." These are two seperate but corrolary industries. Mine is the marketing & sale of real estate. Yours is the lending of money to purchase real estate. They are not the same industry at all. Your questions about an imbalance are akin to wondering why your Securities Advisor makes more money than the teller at your local bank.
Okay I am sure this will rattle some cages but what the heck...
Us mortgage brokers have always wondered why it is that a real estate agent can make 2.4% or more on a listing and nobody complains. If they act as dual agent they can make around 5% or 6% in some states! If a mortgage broker makes more than 1% then he or she is ripping off the customer. If a mortgage broker/loan officer/banker etc.. did a 1st and 2nd loan combination why can't they charge 2.4% on each loan? (The old double standard).....
In many respects I agree with you. But as someone else the market should decide. My complaint against realtors is that they think they are due a flat 6% in today's internet world. The market will finally decide about their commissions also. Of course they have expenses and the commission is split but competition will improve their service and reduce the cost.
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.
I don't even know why I'm participating in this thread, but what they hey, I'm bored tonight.
Bill said it best and this pretty much explains why each are paid what they are paid. In the loan industry you brokers have to compete directly with the banks...sometimes even against the banks you broker through! Especially in the latter, why would someone go through a broker if they can go straight to the bank with the only middle man being the banks LO making their 50-65 basis points or less.....and being able to provide the same rate, and sometimes less in fees. In the Real Estate industry we just compete against each other, no big conglomerates that can provide the same end result more efficiently than anyone else.
I'll be one of the first to tell someone a broker's advantage is being able to offer ALL the loan products of almost ALL the lenders out there. But the fact of the matter is, most people don't know or don't need 90% of the programs out there, and a single good bank can offer 90% of all the loan programs out there should the need arise.
Especially lately, banks compete neck and neck with what legitamate brokers can offer. And to the consumer 6% is 6%, as long as the loan gets done....and the banks have the image of stability that usually puts their perception of reliability much higher than your neighborhood broker.
Heck, I started off as a Loan Officer before I became a Realtor, to me the money you make isn't worth all the work you have to do. So I no longer originate loans. It wasn't worth my time making .5% to compete with the bank down the street, and I couldn't ethically charge more than 1-2% knowing they could get the same loan from somewhere else for much less.
If all you were making was 1% and no backend on a loan and the realtor said you were making to much, that's messed up. But you can't blame a realtor for looking out for their clients best interest, and I encourage all my clients to shop as much as they can before settling on a lender....though I do recommend those I've done business with in the past and know can get the job done and done fairly.
Okay I am sure this will rattle some cages but what the heck...
Us mortgage brokers have always wondered why it is that a real estate agent can make 2.4% or more on a listing and nobody complains. If they act as dual agent they can make around 5% or 6% in some states! If a mortgage broker makes more than 1% then he or she is ripping off the customer. If a mortgage broker/loan officer/banker etc.. did a 1st and 2nd loan combination why can't they charge 2.4% on each loan? (The old double standard)
Let's see...I am sure I will hear the "You don't have the training I do explanation" Funny, can't use that excuse in California as everyone must carry the same license to do both loans and real estate deals. I am a licensed agent in California but I find it amusing that this attitude by some (not all of you of course. I commend you for making your wage) of the agents are "it's good for you (to make less) but not for me...I am exempt!"
So please, omit the "I have all of this extra training I must do....(I have completed education in escrows, real estate principals, ethics, real estate economics, mortgage loan brokering, california real estate law, north carolina real estate law, real estate appraisal, RESPA blah blah blah.)
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..
I wonder what the agent would say if I told the prospective buyer "They are charging you more than 1%? Wow, I would definitely shop around for a better deal. I think you are getting taken!" I wonder how the customer would view that real estate agent after a comment like that?
I wonder how customers view loan officers after an agent makes a comment like that?
Ahh, are you a direct lender or a broker - because I am under the impression you make half of your fee (commission) from rebates you get from the lender. Right?
How many agents call you with prospective clients, who do think did all the work getting them?
I am also, as noted, a firm believer in the free enterprise system and that includes disclosure....
I disagree. It wasn't a personal attack, and I think it unfair that someone I have never spoken to, that I have not seen post a word on this forum, let alone on this thread, can simply wipe it away and gine ma an "Inftraction", without leaving me any recourse at all. And that by simply wiping it away, you also take away any ability for anyone else to read it and juge whether I was attacking someone.
Agents should respect their loan brokers and should not try to manipulate what the loan agent charges on transactions unless of course it is out of the ball park.
We really have many of the same frustrations that full time agents do. I hope that these threads and posts makes at least 1 agent realize this fact.
I have been reading this thread with much interest....
Since you are both a real estate agent and a mortgage broker, you would understand AGENCY. And when I am engaged by a CLIENT (not customer), I have fiduciary and accountability requirements that I must inform my client and treat his business as if it were my own. To that end, if I see that a mortgage broker has charged more than the standard rates for origination and junk fees, I must inform my client of this. What he/she chooses to do is their business.
From what I can read, you don't want real estate agents to tell their clients if your fee's are out of whack... but what you fail to understand is that I have a responsibility to tell my client when I see it.
And that is also why my fee's are more.... I am not just a salesperson representing my product(s)... I am an advisor, counselor, and more. And by the way, my fee's are (usually) paid for by the seller. So you are barking up the wrong tree. The buyer that is paying your fee's, isn't paying mine. And he/she expects me to guide them and advise them.
am an advisor, counselor, and more. And by the way, my fee's are (usually) paid for by the seller. So you are barking up the wrong tree. The buyer that is paying your fee's, isn't paying mine. And he/she expects me to guide them and advise them.
Wow! This really rubbed me the wrong way. Perhaps why I have such a rotten perception of realtors. I'm a buyer, and I'm sure glad I didn't listen to the great advice and guidance of my realtor two years ago. I would be about 50 grand under water right now!
Maybe buyers should just cut the realtor out entirely. If we aren't really paying their commission and we're such a hassle and all. That's what I'm thinking of doing. A flat fee to a lawyer for the paperwork doesn't sound too bad.
And by the way, my mortgage broker has been immensely more helpful and knowledgeable than the majority of realtors I have dealt with.
In many respects I agree with you. But as someone else the market should decide. My complaint against realtors is that they think they are due a flat 6% in today's internet world. The market will finally decide about their commissions also. Of course they have expenses and the commission is split but competition will improve their service and reduce the cost.
Internet has increased expenses, not reduced them.
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of course. I commend you for making your wage) of the agents are "it's good for you (to make less) but not for me...I am exempt!"
