Real Estate Agent vs. Mortgage Broker: An Overview
Real estate agents and mortgage brokers share similar job attributes, as both help their clients obtain residential or commercial properties. A real estate agent helps buyers and sellers find or sell a physical property, and a mortgage broker helps their clients purchase them.
Real Estate Agent
Because the real estate industry can be extremely competitive, if you are 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: shows properties and homes, finds properties and homes to sell, acts as a liaison between buyer and seller, follows his or her local real estate market, and in some cases, provides financing guidance.
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, and depending on the state and agency, if not working independently, additional education in financing and/or 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.
[Important: A real estate agent may be moving from location to location during a typical work day, but a mortgage broker may spend most of the workday on the computer or phone in an office.]
Some agencies may pay a nominal salary on a weekly, bi-weekly, 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.
Cited below are compensation ranges in various categories, from PayScale.com for 2018, 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.
|Item||Range Of Compensation|
|Salary||$23,952 - $103,719|
|Bonus||$0 - $15,456|
|Profit Sharing||$1,021 - $78,297|
|Commission||$973 - $151,672|
|Total Pay||$24,461 - $115,698|
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 credit-worthiness 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 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.
Many mortgage brokers have a sales or marketing and/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 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.
|Item||Range of Compensation|
|Salary||$29,130 - $173,295|
|Bonus||$0.79 - $35,745|
|Profit Sharing||$1,250 - $112,500|
|Commission||$2,534 - $369,872|
|Total Pay||$28,850 - $176,850|
- Real estate agents will be less concerned with financial details.
- Mortgage brokers must study credit reports and lending contracts.
- Both jobs may require working nights and weekends; compensation for both careers is based on productivity.
- A real estate agent may be moving from location to location during a typical work day, but a mortgage broker may spend most of the workday on the computer or phone in an office.
- Both jobs require obtaining the proper license by the state in order to practice, and keep the license up to date via renewals and further education and testing.