Switch from Realtor to Loan Officer?

Question

I have been a Realtor for about 1.5 years and have done relatively well. However I was recently approached by a Lender who offered me a job as a Loan Officer. I wanted to see if anyone had made the switch (or visa versa) and what your thoughts were.

I've been in sales for a while and am very proficient on the phone, I imagine I can make similar money (if not more). Does anyone find that being a loan officer is more fulfilling than a Realtor? What would be different stress factors or unfavorable aspects of the job? What's better about being an LO vs a Realtor?

Thanks in advance!

Chris Mason · Answer

Eh, I wouldn't say harder or easier. What we do is more efficient. I'm not spending my weekends driving my 100 clients all over town and playing marriage counselor (except once in a while), but you're busy doing exactly that with your 30 as a Realtor (and for nearly all 30 too). So it scales better on our side... provided you can drum up those 100 clients. If you're a 30 clients/yr kind of person either way, stick to being a Realtor.

I do agree that it's yin/yang. If I tried to be a Realtor, was showing a home, and someone told me the kitchen didn't "feel warm," then I'd turn up the thermostat, declare the problem solved, and tell them to write an offer or GTFO. :) That sort of approach works for mortgages where it's a number you can quantify and exactly measure, but not for being a Realtor where it's an aesthetic and a feeling.

There are a lot more failed LOs that become successful Realtors, than there are failed Realtors that become successful LOs. A bunch of my successful Realtor partners, oddly enough, are former LOs.

If you are a member of NAR as a Realtor, I would never personally hire you, under any circumstances. If any of my Realtor partners found out that I had a Realtor in my employ, well, I'm sure you could figure out how that would go.

Gavin Lewis · Answer

So that's exactly why I am considering the switch. I am not the type of person who enjoys playing therapist, marriage counselor, babysitter, and etc. It's frustrating when someone can't quantify why they don't want to do something. I feel like loans are more back and white, yes or no. I worked in bank compliance and the Marine Corps so, as you can imagine,  I don't have much patience for your feelings.

My Real Estate license would be expired before I started so there wouldn't be any conflicts (already had that discussion with lender). In my eyes, the fact that I can do everything from an office and over the phone is also a perk, no more driving 35 miles to show someone a house. I also feel like by having your business spread out over 100 deals instead of 30, it's not as devastating if you lose a couple.

However I think I'm going to give it until the end of 2020 and if I can't change my mind I'm going to start the transition to LO

David M. · Answer

@David Robinson

Thanks.  I was just trying to clarify your term.  So, basically you used to do "conforming mortgages" but now you are basically doing private lending if I understand you correct.  Basically, I never heard of an "investment lender" as a title/job position before.  Thanks.

Russell Brazil · Answer

Maybe @Chris Mason will have some sight as well....but I generally feel that the personality types that make a good agent, wouldnt work as a loan officer and vice versa.

I also personally feel like what guys like Chris do is harder than what I do as an agent. (I wonder if he feels the same way about the reverse.) A loan officer has to do like 3 times as many deals a year as an agent, and they do the good ones. But I think its so much easier coming up with 30 clients a year to deal with instead of 100.

David Robinson · Answer

@David M. Mortgage Originator can be retail (purchase, refi, single family homes) with banks versus investment lender or private lender. Here is some differences

Private Lenders:

Higher Interest Rates –

Faster

Easier Approval Process

Less Regulated – More Flexible

More Customizable Loan Options

Banks:

Lower Interest Rates –

Slower

More Scrutinized Approval Process – Including Financial History and Credit Audit

Subject to Significant Government Regulations – Less Flexible

Choosing the type of lender that is best for a real estate investor is not simply a matter of the least expensive option available. A borrower that will not qualify for a bank loan can waste weeks, or even months waiting for a decision from a bank when they could have been approved and moved forward with a private lender in a matter of days.

In the end, the least expensive loan at the beginning may be the most expensive in the end

Strict Loan Options Due to Regulations

David M. · Answer

@David Robinson

Hi.  do you mind explaining the difference between an "investment lender" and a "mortgage originator?"  Thanks.

David Robinson · Answer

@Gavin Lewis I have never been a real estate agent, but I am currently an investment lender, and previously a mortgage originator. I will never let my license go, the testing was hard for me, but I did it,and I feel like its a great backup for income if I dive into another field or venture, and want to come back. Tennessee allows you to renew your license without a sponsor, most other states will require a sponsor even if your not using your license.

I really enjoyed helping people save money,or cutting years off their mortgage,or helping finance their purchase.  I think you would have some of the same experiences between REA or LO, helping clients find or finance a dream home or first home, networking,  And also some of the same negative experiences like a situation that fails and is out of your control, like low appraisals or unseen repairs. I don't see as many appointments on Saturday or Sunday as I believe a real estate agent sees,but I make myself available when the client is available. I think an LO can have more reach remotely , getting licensed in multiple states and opening up more regions. There is also multiple options in lending, like investment lending,commercial,or retail.

Feel free to connect and pm me if you have any specific questions.

Michael Noto · Answer

Interesting perspectives here by @Chris Mason and @Russell Brazil they both make some great points.

The only thing I would add is if you are going to make the switch, do it now earlier in your career because the more established you are the tougher it is to make a move like this.

Switch from Realtor to Loan Officer?

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