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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?
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)
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 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.
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?
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.
Well, not entirely. The NAR is a huge powerful organization that can control the playing field very well. If I had my choice, I would pay a flat fee for both the loan and the realtor. None of these percentage based fees. Find a realtor that will do that and he'll be pushed out of business by the other realtors, or the NAR will lobby for legislation to make what he's doing illegal.
Well, not entirely. The NAR is a huge powerful organization that can control the playing field very well. If I had my choice, I would pay a flat fee for both the loan and the realtor. None of these percentage based fees. Find a realtor that will do that and he'll be pushed out of business by the other realtors, or the NAR will lobby for legislation to make what he's doing illegal.
There are plenty of flat fee real estate brokers out there. IT's just not a business model that many choose. The NAR & Other Realtors are not pushing them out or making it illegal.
...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?
Isn't that whay you just did, on a public forum?
So now maybe you'll discover the answer to your question of "I wonder how customers view loan officers after an agent makes a comment like that?"
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)
You can. Unfortunately for you agents will often tell their customers to shop it out so if your competition beats you in price, you lose.
Quote:
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 don't think they would be looking at me in anyway. I do think they would be looking at you kind of funny because they already know they are the buyer and it's generally the seller that is paying the commission. They also know if they didn't want commissions involved they could have gone directly to a FSBO but have chosen not to.
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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!"
