Before I start, let me just say that I really love Real Estate Agents. A knowledgeable and experienced Realtor makes all the difference in a transaction. I work with some of the best in the industry and I admire the commitment they have to their buyers and or sellers.
Having said that, this experiment, agent as loan officer, has been played out thousands of times with great failure. It’s not that it’s a conflict of interest, I don’t believe it is. You just can’t do both jobs and do them well.
Having hired ex-real estate agents as loan officers I have had the experience that it is very difficult for them to wear both hats, mostly because they already think they know everything about the mortgage industry.
The fact is that to be a real mortgage expert requires constant education and following the industry which changes continually. The same applies to being a professional real estate agent. Both are full time jobs. A true professional Loan Officer will:
- Know program guidelines just as well as the underwriter.
- Review comparable sales to determine if there could be appraisal issues.
- Do a thorough interview and fill out a complete and accurate loan application (believe it or not, most don’t).
- Analyze paystubs, w-2’s and tax returns to get all allowable income (this can take quite a bit of time and much practice).
- Review your bank statements and reveal any deposit that the underwriter might subject to sourcing.
And a whole lot more. The one thing we hate the most is to send a buyer to a realtor and find out later that they don’t qualify for the mortgage. Do realtors that are also loan officers do all this? Of course not, they wouldn’t ever sell any real estate.
Another drawback is recommendations. No realtor is going to send you a referral as a loan officer if they know you are also a realtor and vice versa. What loan officer would send a pre-qualified buyer to a realtor that’s also his competitor? You won’t create relationships.
We usually have a pipeline of qualified buyers that we obtain thru social media, prior customers, etc. We refer those buyers to a quality real estate agent. In turn, they refer us buyers for mortgages. Here, the client is the real winner. He’s getting a Realtor who’s only concern is finding him the right house at the right price, and a mortgage lender that only cares about getting them the best mortgage and closing on time.
Satisfied clients refer other clients and the cycle starts again. In all my years of mortgage lending, I have never met anyone that does both and is effective.
In closing, pick one profession and do it better than anyone else and you’ll be successful. Be a Jack of two trades and you’ll master neither.