Real Estate Agent vs. Mortgage Broker: An Overview
Real estate agents and mortgage brokers share similar job attributes. As licensed professionals in the real estate industry, both help their clients obtain residential or commercial properties. But their specific duties are quite different. A real estate agent helps buyers and sellers find or sell a physical property, and a mortgage broker helps buyers find the financing to purchase a property.
- Real estate agents put buyers and sellers together; mortgage brokers put buyers and lenders together.
- Depending on whom they represent, real estate agents help their clients purchase a property or sell a property, and mortgage brokers help their clients find financing for the property.
- Mortgage brokers must study credit reports and lending contracts; real estate agents are less concerned with financial details (other than purchase prices).
- Both jobs may require working nights and weekends; compensation for both careers is based on productivity.
- Both jobs require obtaining the proper license by the state in order to practice and to keep the license up to date via renewals and further education and testing.
Real Estate Agent
Because the real estate industry can be extremely competitive, if you want to become a real estate agent, an outgoing personality, a desire to be helpful, maturity, and trustworthiness are essential qualities. A residential real estate agent should also be able to present a house and sell the features it provides in a pleasing manner. A creative eye for design and detail can be a strong asset in this profession.
Depending on whether an agent is acting on behalf of a buyer or seller, the following responsibilities are typical:
- Show properties and homes
- Find properties and homes to sell or for buyers
- Negotiate in between and act as a liaison between buyer and seller
- Follow the local real estate market
- Provide financing guidance (in some cases)
The qualifications for becoming a real estate agent may include a background in sales or marketing and at minimum a high school diploma. Every real estate agent must have a license. Depending on the state and agency, additional education in financing and housing laws may be required.
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 whenever their clients need them.
|Real Estate Agent Compensation|
|Item||Range Of Compensation|
|Salary||$24,000 - $101,000|
|Bonus||$259 - $21,000|
|Profit Sharing||$989 - $49,000|
|Commission||$2,000 - $184,000|
|Total Pay||$25,000 - $104,000|
Cited above are compensation ranges in various categories, from PayScale.com as of March 2020, the most recent figures available. The numbers reflect a range of averages. Some agents may earn less, others who are very good (and perhaps very lucky) may earn more.
Some agencies may pay a nominal salary on a weekly, biweekly, or monthly basis, but most agents are compensated with commission after a sale, based on a predetermined percentage of the sale price. Earnings as a real estate agent tend to increase with experience.
A real estate agent may be moving from location to location during a typical workday, while a mortgage broker may spend most of the workday on the computer or phone in an office.
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 and ongoing part of a mortgage broker's job of securing the best rates for a client. Some brokers may develop relationships with favored lending institutions, but a good broker will look out for his or her clients' best interests.
Given the job's key component of finding the best loan options for their clients, a heavy knowledge of lending institutions, lending rates, and terms is a must. Familiarity with creditworthiness criteria and credit reporting is important, as is a strong proficiency in math, verbal, and writing skills.
Mortgage brokers must accommodate their customers' schedules, and a friendly, outgoing personality can go a long way with clients. Being a mortgage broker often requires long hours and many days of searching for a lender willing to work with the prospective borrower, so patience is just as key in this field. This quality will also serve brokers well when they have to accept several rejections from lenders when trying to put a loan together.
What Are The Differences Among A Real Estate Agent, A Broker And A Realtor?
|Mortgage Broker Compensation|
|Item||Range of Compensation|
|Salary||$31,000 - $125,000|
|Bonus||$1 - $20,000|
|Profit Sharing||$0 - $16,000|
|Commission||$15,000 - $84,000|
|Total Pay||$30,000 - $141,000|
Many mortgage brokers have a sales, marketing, or finance background, especially in banking. If you want to be a mortgage broker, you will need a high school diploma at the very least, and obtain your broker's license. To do so, you must take the national AFE Mortgage Loan Originator Test, and a test on the rules and regulations for the state you plan to work in.
Mortgage brokers may earn a salary as well as additional compensation in the form of a commission based on a predetermined percentage of the mortgages secured. Compensation ranges from PayScale.com for 2018, the most recent information available, in various categories are cited below. The numbers reflect a range of averages. Some brokers may earn less, while better, more experienced brokers may earn more.
National Association of Realtors. "Licensing for Real Estate Professionals." Accessed August 21, 2020.
PayScale. "Average Real Estate Agency Survey." Accessed August 21, 2020.
NMLS Resource Center. "Testing." Accessed August 21, 2020.
PayScale. "Average Mortgage Broker Salary." Accessed August 21, 2020.