This article compares and contrasts the responsibilities of loan officers with real estate agents.
What is the difference between a loan officer and real estate agents?
Loan officers focus on providing loans to homeowners and real estate agents focus on finding buyers for homes. Loan officers are sometimes able to provide financing for a down payment and closing costs, whereas real estate agents try to help their clients find properties that interest them.
Loan Officers work within the banking and finance industry and are often lenders or brokers. In contrast, real estate agents typically work with a company to sell a property outright or find a buyer for one. Loan officers may also have their own personal money to invest in a property, but they are paid by commission through their brokerage.
Loan officers vs. Real Estate Agents: The Responsibilities
Loan officers, who can be found in banks, mortgage companies, and credit unions, are the people who help you find a loan. They take your information from start to finish, and have close ties with the lenders. A loan officer will offer you multiple options for loans based on your needs. A real estate agent is someone that can sell a house or other property to another person. They do not handle loan applications like loan officers do. In many cases, they make no money from their side of the deal, so if they buy it themselves, it will make them more money.
A loan officer is typically the person who makes a loan. They usually do this by holding a commercial mortgage, which is when the borrower buys a piece of property with the funds provided in a loan to purchase it. Your real estate agent will be in charge of finding you your next home, which may or may not involve borrowing money.
How Loan Officers Get Paid
Loan officers are paid per their success in approving loans. The more loans they approve, the more money they make.
Real estate agents are paid a commission after they sell your property, but loan officers get paid on the interest rates of the loans that they approve. Loan officers can make a lot more money than real estate agents, so most loan officers are more qualified and have more experience with loans.
To be a loan officer, you will have to pass both the National Mortgage Licensing Examination and the New York State licensing exam. This is because New York State has a separate licensing exam for loan officers. The level of education required to work as a loan officer is not very high. Loan officers will typically make between $20,000 – $50,000 per year depending on the size of the company they work for.
Though it can be hard to find a loan officer with the specific experience you need, a real estate agent can help you find the right lender. Additionally, a real estate agent has an in-depth knowledge of the local housing market and understands how that market works better than most loan officers.