All Forum Posts by: Alexander Levit

With the advent of Rocket Mortgage & other technology apps & alternatives to the traditional service industry of Realtors+Mortgage Loan Originators, will people be ultimately replaced by technology or automation? Millennials & future generations are very adept & comfortable with utilizing the instant convenience & speed of online everything...Will these two industries eventually be obsolete or challenged drastically? I'm looking at these two industries as a possible new career path & doing as much research as possible (I've worked in R/E before prior to 2008, so it wasn't a fun time), but I'm looking at what the future holds & where there could be some serious challenges. Would love some insight from seasoned professionals & what your outlook is towards the future of these two service industries (MLO's/LO's+Realtors) - Everyone also likes to save money & desire instant information, with technology, there is a much quicker turnaround time....

All insights are appreciated...

Thanks - Alex 

You forgot to factor in one important aspect of that REA commission, the brokerage split. So most likely fits a 50/50 split after the other agent (buyer/seller) received their half of the commission, the REA has to split that with their brokerage (for marketing, name, office, support, mls, etc)....

So back to your formula in that scenario with a 50/50 split, the actual commission made (1.5%) would be half of that figure, so $72,000 (minus realtors other expenses - marketing, lead generation, car depreciation, etc...), which should definitely be factored into the breakdown. There is however a benefit with REA's & that's the tax side of things since your your own business & if you plan ahead & setup a LLC or Corporation, you reap many tax rewards potentially based on your earnings (lower tax rate, maximum tax deductions, retirement funds for self employed, etc)...

Actually wondering if a MLO can create a LLC entity & reap many of those benefits

@Charles Stewart II I would also like to ask this same question & add one more focus area...

A realtor is their own business & can setup an LLC (Elect S-Corp for taxes), so there's a greater tax advantage with being a real estate agent, especially when it comes to deductions.

Can you also structure yourself as an LLC as a Loan Mortgage Originator even though your an employee? Tax benefits of Realtor vs being an employee (unless there's a loophole here with being a LO) should be factored in?