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If you're considering a career as either a real estate agent or a mortgage broker, this article is designed to help you make a logical choice between these two careers. Read on to find out which occupation best fits your education, experience, skills and personality.
TUTORIAL: Exploring Real Estate Investments

A Career as a Real Estate Agent

Education/Experience Requirements
The qualifications for becoming a real estate agent may include:

  • A sales or marketing background
  • A high school diploma, at minimum
  • Additional education in real estate financing and law may be required by some agencies
  • A state real estate license, obtained through study and a written licensing test (For more read 6 Steps To Becoming A Real Estate Agent.)

Personal Skills
If you want to be a real estate agent, an outgoing personality, a desire to be helpful, maturity and trust-worthiness are essential qualities. A real estate agent should also be able to present a house and sell the features it provides.

The job often requires long hours, and many days of showing houses or commercial property to prospective buyers without a sale, so patience is also a must. If you like events to move quickly and need a paycheck every week, a commission-based real estate agent's job may not be for you.

People with jobs or other obligations are often occupied during the day and do their house hunting on nights and weekends. As a result, real estate agents must be willing to make themselves available on short notice and at any time their clients need them.

What Real Estate Agents Do
A real estate agent does the following tasks as part of his or her job:

  • Shows homes or commercial property to prospective buyers
  • Finds properties for prospective buyers
  • Studies and keeps abreast of the real estate market
  • Acts as liaison between seller and buyer and sometimes helps a buyer secure financing

Compensation for Real Estate Agents
Some agencies may pay a nominal salary on a weekly, bi-weekly or monthly basis, but most agents are compensated after a sale, based on a predetermined percentage of the sale price. Earnings as a real estate agent tend to increase with experience. (A long list of things needs to happen before a home changes ownership. Find out what to expect in 12 Steps To Closing A Real Estate Deal.)

Cited below are compensation ranges in various categories, from PayScale.com for 2010. The numbers reflect a range of averages. Some agents may earn less, others who are very good (and perhaps very lucky) may earn more.

Item Range Of Compensation
Salary $35,126 - $78,959
Bonus $3,966 - $19,813
Profit Sharing $972 - $10,174
Commission $14,916 - $64,525
Total Pay $41,409 - $106,619

A Career as a Mortgage Broker

Education/Experience Requirements
The qualifications for becoming a mortgage broker may include:

  • A sales or marketing background; a banking background is also helpful
  • A knowledge of lending institutions, their lending rates and terms
  • Familiarity with credit reporting and credit-worthiness criteria
  • A proficiency in mathematics
  • Good verbal and writing skills

Personal Skills
A good mortgage broker tends to have an outgoing personality and a desire to be helpful. Mortgage brokers must also be able to explain financial concepts and provide clients with information on how a mortgage works and what clients can do to improve their credit and become eligible for better mortgage rates.

The job often requires long hours, and many days of searching for a lender willing to work with the prospective borrower, so patience is as key in this field as it is for real estate agents. This quality will also serve brokers well when they have to accept several rejections from lenders when trying to put a loan together.

As mentioned above in the section on real estate agents, people with jobs or other obligations are not available during the day and must conduct their mortgage work on nights and weekends. Mortgage brokers must therefore accommodate their customers' schedules. Often the customers are researching rate quotes after work, so being available could mean the difference between getting a sale or not. (Many mortgage brokers adapted to the post-subprime environment by becoming loan modification specialists. For more insight, check out The New Mortgage Business: More Than Just Loans.)

What Mortgage Brokers Do
Mortgage brokers act on behalf of clients to find them the best interest rate and terms for a mortgage, either on a private residence or a commercial property. Researching the latest interest rates and loan terms is an essential part of a mortgage broker's job of securing the best rates for a client. Because rates and terms are constantly changing, the research aspect of a broker's job is ongoing. Many brokers, however, develop relationships with favored lending institutions.

Mortgage brokers may earn a salary as well as additional compensation in the form of commission based on a predetermined percentage of the mortgages secured. Compensation ranges from PayScale.com for 2010 in various categories are cited below. The numbers reflect a range of averages. Some brokers may earn less, while better, more experience brokers may earn more.

Item Range of Compensation
Salary $33,850 - $81,801
Bonus $1,500 - $10,157
Profit Sharing $1,250 - $112,500
Commission $24,747 - $101,736
Total Pay $41,500 - $102,976

Consider and analyze the similarities and differences between real estate agents and the mortgage brokers, and how they apply to your personality and background. Keep in mind that real estate agents will be less concerned with financial details and the often tedious work of studying credit reports and lending contracts that occupy the mortgage broker. (Read more in 4 Steps To Attaining A Mortgage.)

Both jobs may require working nights and weekends; compensation for both careers is based on productivity. A major difference to be considered is that the real estate agent may be moving from location to location during a typical work day. A mortgage broker, on the other hand, may work from an office or from home, and spend most of the work day on a computer or telephone. Whatever your choice, good luck in your job search. And remember, have a backup plan if you can't land the job you want right away.

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