Should I Become a Loan Officer or a Real Estate Agent | Learn the Truth

Should I become a loan officer or a real estate agent is a commonly asked question by many people today? To choose whether to become a loan officer or a real estate agent, you must define your capabilities and willingness. For example, if you want to earn money a little bit fast, work the necessary hours weekly, don’t like dealing with different people to close a deal, you should become a loan officer.

On the contrary, if you have a salesman spirit, can wait for your earnings at the right time, and are available, your option is to become a real estate agent.

However, loan officers and real estate agents have comparable job responsibilities. Both are licensed real estate agents that assist their customers in purchasing residential or commercial real estate. A real estate agent assists buyers and sellers in locating and selling physical property. A loan officer, on the other hand, assists purchasers in obtaining finance to purchase a property.

While a loan officer helps buyers obtain financing to purchase a home. Thus, real estate agents bring buyers and sellers together, while loan officers bring buyers and lenders together.

Should I Become a Loan Officer or a Real Estate Agent?

Should I Become a Loan Officer or a Real Estate Agent

I would like some advice on what you think would be the best career path for me, or if my skills are transferable to both industries. Also, which one offers more money, stability, and growth potential?

A loan officer has seen an increase in 5-15% salary since 2006, which is way better than inflation rates. Salaries tend to range from $33k – $80k, with very few positions earning higher wages. They often work long hours, and their advanced positions require significant experience (and education).

The benefit of this career would be its stability. They’re more likely to be working within the next five years instead of real estate agents (who may suffer from a significant decline in their industry). If you like traveling and job hunting, this is not the position for you.

And what makes it different from being a realtor? Do they perform similar functions?

They do work similarly; however, there are differences. The primary difference between them is that loan officers tend to focus on each borrower’s interest rates and eligibility requirements.

Realtors will typically help clients buy and sell homes, but they also work on commercial properties and investments such as stocks, bonds, and mutual funds. In my opinion, I would choose a mortgage broker because there’s pay stability, and they have a low probability of being out of work in the next five years. 

It is also more detailed, but I don’t really like that aspect. Real estate agents get to travel and help clients, who are appealing to me; however, there’s no stability (the real estate market has been declining over the past decade and could decrease even more).

Fundamentals of a Loan Officer and a Real Estate Agent

  • Real estate agents help their clients buy or sell a property depending on who they represent; while loan officers help their clients obtain financing for the property.
  • Loan officers must review credit checks and contracts; realtors are less concerned with the financial details, focusing only on the purchase or sale price.
  • Both positions may require working evenings and weekends; compensation for both jobs is based on productivity. They require obtaining a state license to practice and keeping it active through renewals and continuing education.
  • A new loan officer can start making money sooner than a real estate agent; they don’t waste time dealing with unrealistic sellers or inflexible buyers. After some time in the business, they may have ties to many real estate agents who send them business regularly. 
  • Realtors have more tasks, such as personal and internet marketing, listing presentations, pricing, negotiating contracts, dealing with property inspectors, title companies, real estate appraisers, and closings.
  • Loan officers face a great deal of competition in the industry; online assignments are expanding year after year. On the other hand; Loan officers seem to be less constrained in terms of course requirements, licensing, and continuing education.
  • Many real estate agents work long hours, including nights and weekends. However, it appears that top producers could earn an excellent income. When a sale is made, a real estate agent earns 3%, compared to the 1% generated by the loan officer.

What do you need to become a Real Estate Agent?

Should I Become a Loan Officer or a Real Estate Agent

Since the profession can be quite competitive, you must have an outgoing personality, desire to serve others, maturity, and confidence to become a real estate agent. You must also show a home and market the features it offers attractively. Having a creative eye for design and detail can be a valuable asset in this field.

Depending on whether you represent the buyer or the seller, the following tasks are typical:

  • Homes and properties on display.
  • Searching for houses and homes for sale or purchase.
  • Act as an intermediary for the buyer and seller by negotiating and acting as a liaison.
  • Monitoring the local real estate market.
  • Give financial advice (in some cases)

To be a real estate agent requires a background in sales or marketing and a high school diploma; they must be licensed. Depending on the state and the agency, additional training on financing and housing regulations may be required.

Long hours, several days, or nights of showing residences or commercial properties to prospective buyers are often required; without a sale, so patience is also required.

Real Estate Agent Compensations

Range of remuneration

Item$24.000 – $106.000
Salary$999 – $31,000
Bonus$2,000 – $35,000
Profit Sharing$2,000  – $247,000
Commission$25,000 – $141,000

Some agencies may pay a weekly, bi-monthly, or monthly salary, but most agents are reimbursed with a commission after a sale, based on a specified percentage of the sales price. As a result, income as a real estate agent usually increases as experience increases.

A real estate agent must be able to show, and identify properties and homes, to sell. Must negotiate between buyer and seller, function as a liaison, follow the local real estate market, provide financing advice and be patient.

Loan Officer.

They work on behalf of their clients to discover the best interest rate and terms for a mortgage. So it is whether for a residential home or a commercial property.

Researching current interest rates and loan terms is an ongoing element of the job; to acquire the right ones for the client. Some create links with preferred lending institutions, but a professional broker will look out for the best interests.

Given the importance of discovering loan solutions for your consumers, knowing lending institutions, interest rates, and terms are necessary. Thus, they must be familiar with creditworthiness standards and credit reports, and have strong quantitative, verbal, and writing skills.

Must work around customer schedules, with a cheerful and outgoing attitude; can be very helpful to consumers. On the other hand, it involves working long hours and finding a lender willing to deal with the prospective borrower, so patience is essential in this industry. This trait will also benefit agents when they accept many rejections from lenders while selling a home.

Most mortgage brokers have a background in sales, marketing, or finance, in the banking industry. To become one, you must first obtain a bachelor’s degree and then a broker’s license; pass the AFE’s national mortgage loan originator exam, in addition, a test on the rules and regulations of the state in which they intend to operate.

They may receive a salary as well as a commission based on a certain proportion of mortgages obtained. Mortgage brokers in New York City earn a median salary of $93,000. This means that for every dollar 100% of the total money spent on the mortgage, there are about 56 cents for rented housing and 46 cents when the rent is paid. Therefore, Mortgage brokers in New York City may earn between $47,000 and $73,000.

Loan Broker Compensation

Mortgage Broker Compensation
ItemRange of Compensation
Salary$36,000 – $138,000
Bonus$493 – $35,000
Profit-Sharing$0 – $1,000
Commission$12,000 – $175,000
Total Pay$31,000 – $145,000

Frequently Asked Questions

Can Realtors be Loan Officers and Real Estate Agents at the same time?

No; Realtors are licensed professionals licensed to represent home buyers and sellers. A professional Realtor should learn the basics of the numerous home loan programs available in today’s market. Thus, they know the right questions to ask to obtain a credit report on mortgage loan terms.

Do I need good credit to become a licensed mortgage loan officer?

No, obtaining a license requires training, attainment of certain qualifications, and compliance with specific standards. Although there are national and state criteria for licensing mortgage loan officers, no minimum credit score is required for licensing. A poor credit score or other problems need not define your professional destiny.

How loan officers can build trust with realtors?

Real estate agents and mortgage lenders often collaborate, helping buyers throughout the process rather than just showing them suitable places to live. This includes advising them on how and where to obtain financing for the purchase.

Referrals are essential to expanding your business and increasing revenue; develop trusted relationships with several successful real estate agents and thus have a steady source of referrals.

Can I become a mortgage broker while working another job?

Yes, it is possible to work as a mortgage loan officer or loan originator full-time or part-time. This is fantastic news if you want to change jobs, require flexibility around family and school, or need some extra money to augment your current salary.

How long does it take to become a mortgage loan officer?

The time it takes to become a loan officer is determined by the type of schedule that works best for you and how quickly you can complete the licensing requirements. Generally, it takes 45 days to complete the requirements and become certified. However, because each state has different criteria, this may differ; it will depend on your ability to pass the appropriate tests and background checks.

Bottom line

At this point, we have everything related to the question; should I become a loan officer or a real estate agent. Thus, this material’s interpretation and accurate application will clarify doubts and reinforce knowledge on the subject. But, on the other hand, you will have a unique guide that will accompany you through all the steps to accomplish your goals, taking you on the right path to success.

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