Should Real Estate Agents Be Loan Officers???

By
Services for Real Estate Pros with ERA Top Service Realty, Inc.

I view ActiveRain as another forum.  So, I beg to answer the question: Should real estate agents also be loan officers???

A case could be said for pros and cons, but I want to know what the general public feels.

Personally, I believe that it is a conflict of interest.  I don't see how an agent can truly represent the interest of either the seller or the buyer of they are trying to do the loan at the same time.  My company's policy is that my agents are not permitted to do real estate sales and do the loan.  I would rather my agents focus on doing more sales.  I don't believe in kickbacks and view that instead of giving me a point from the loan give me more business.

What do you think???

I'm curious.

Regards,
Melissa Gomez
VP of Operations
ERA Top Service Realty, Inc.
www.ERATopService.com

Comments (21)

Ken Cook
Content, coding, marketing, host. - Marietta, GA
Content Marketer/Creator

Before I get started :) let me say I LOVE real estate agents and many of my best friends are agents. They already know how I feel about the topic so ...

This experiment, agent as loan offier, has been played out thousands of times with great failure. There is one very outspoken member of Active Rain who is often featured as a "mortgage industry expert" but who is actually a real estate broker. I have watched some video clips of the person with great hilarity at his "expert answers" about the mortgage industry and his blog posts about the mortgage industry are equally inept.I can only wonder at the number of customers he has misguided.

Recently I had a Team Captain here who wanted to develop a team of real estate agents as loan officers. He hired 12. They turned in the worst packages I have ever seen in my life, constantly wanted to demand the underwriter to approve files, gave the processor absolute fits and still did not return the documents required by underwriting. In the end we had to step in and take over to get the files closed and terminated our agreement with the Team Captain and his team. C'est la vie.

Having hired ex-real estate agents as loan officers I have had the experience that it is very difficult for them to make the switch mostly because they already think they know everything about the mortgage industry. But here is the problem Melissa: You have big lenders, bankers and mortgage brokers letting agents "think" they are loan officers when all they are is agents of referral. Since it is illegal to pay an agent for a referral these lenders (the largest in the nation is well known inside the industry to pull this trick) the lender will hire them as a "loan officer" so they can pay them for their referrals. There is also a multi-level company which uses real estate agents the same way to skirt the law. They are not long for this industry although they already have about 5 years in the biz. Amazing how long it takes the FBI to build a water-tight case.

To be a real mortgage professional requires constant education and following the industry which has moving parts which change constantly. So there. how's that for an answer? (By the way, I used to own a real estate company but I didn't have anything to do with it. It was run by a professional broker who had 30 years in the industry.)

Mar 30, 2009 08:22 AM
TIM MONCRIEF
Tim Monciref - Austin, TX
Over 2,000 homes sold…..

Massive conflict of interest and a lawsuit waiting to happen.  Sign all the disclosures you want, but you are a sitting duck awaiting problems.  KISS and focus.  Best to you........and stay out of court.

Mar 30, 2009 08:24 AM
Robert Rauf
HomeBridge Financial Services (NJ) - Toms River, NJ

Melissa, not sure I can add too much more than above... but I think it is a big BIG conflict.  Jack of all trades, master of none!  especially in today's world, as a full time 22yr Veteran of the mortgage biz it is difficult to keep up with the changes the mortgage world is going through, it would be impossible for some one doing it part time to do so. 

In NJ it is not legal to hold a real estate license and a Mortgage bankers license, but you can be a realtor and a LO.  as a buyer, would you want some one working for you doing 2 of the largest transactions in your life, and doing both of the part time???

Mar 30, 2009 08:27 AM
Lynn Meldrum
Lynn Meldrum with Verico Canada First Mortgage - Calgary, AB

I believe it might just be a conflict of interest un less they are not doing the selling and mortgage selling.  Also getting a mortgage is more complicated than it seems and if you are not in the business full time then you probably don't know what lender offers what product and you would tend to spend more time trying to figure out who does what that the client would be a little more stressed than regular.

Just my point of view from a Mortgage Professional

Mar 30, 2009 08:30 AM
Brian Brumpton
Keller Williams Boise - Boise, ID
Boise Idaho Real Estate

I think it is a conflict of interest.  You can't be fully dedicated to either and they are two professions that require full time dedication. 

Mar 30, 2009 08:31 AM
Rick Huffman
Mortgage Banker - Kent, WA

Melissa, I worked in an industry that had the same situation. What happens is that you don't get very good at either mortgage or Real Estate. These are peoples lives your dealing with and with the changes in the industry happening so fast it's hard to keep up unless you are totally committed to one or the other.

Mar 30, 2009 08:37 AM
Diane Daley
Caron's Gateway Real Estate - Northumberland, NH

This would be a huge conflict...

Mar 30, 2009 09:00 AM
Patrick Schutte
Flex Realty - Prescott, AZ
REALTOR

I think it's less of a conflict than it is a lack of expertise in all areas.  You can't be all things to all people.

:) PS

Mar 30, 2009 09:04 AM
Steve Graham
Inactive - Atlanta, GA

If properly trained, it could actually benefit the client, as the buyer would be fully in the loop about all aspects of the transaction; and, you might offer extra savings by bundling the services.

However, if not properly trained, it could be a fiasco; and, it could cost the buyer extra money.

As with many things, it's about proper implementation and sincerity to help the client.

Mar 30, 2009 09:23 AM
Bobby Wallace
Vacant Land Solutions - Charleston, SC
Sell Your Vacant Land The Hassle Free Way!

Hey Melissa ~

Great question!

I can see both sides...just not sure of the liability.

(You would be wearing a lot of "Hats") 

Mar 30, 2009 10:19 AM
Konnie Mac McCarthy
MacNificent Properties, LLC - Cobb Island, MD
Broker/Owner - VA & MD "Time To Get A Move On!"

I don't know how the public feels, but I don't see any reason why they couldn't..as long as it is not in the same transation..

Mar 30, 2009 01:37 PM
Johnny Burke
Keller Williams Realty - Los Angeles, CA

I would have to agree with Konnie; this can work, but just not both in the same transaction. Since many realtors are doing loan mods, they will inevitably come across homeowners who can refi instead, so it makes sense for them to be able to do this.

Mar 30, 2009 03:45 PM
Sharon Harris
Keller Williams Keystone Realty - Hanover, PA
Realtor

I think not. It is great to know all the mortgage information to pass along to our client. But no to writing the loan. It is one or the other.

Mar 31, 2009 12:13 AM
Robert Rauf
HomeBridge Financial Services (NJ) - Toms River, NJ

It appears that the consensus is overwhelmingly "NO".

even the "YES" votes say... not on the same transactions.  I still think you pick your career and stick with it.  Find the one thing you enjoy and do it right!

Mar 31, 2009 03:52 AM
Troy Erickson AZ Realtor (602) 295-6807
HomeSmart - Chandler, AZ
Your Chandler, Ahwatukee, and East Valley Realtor

Melissa - It seems that this question pops up every now and then.  I actually have done both, but not at the same time.  I was a loan officer before I got into real estate.  I personally feel that I wouldn't want to do both at the same time, or on the same transaction.  I want to focus on one thing, and be really good at it.  There is no reason to get greedy.  If you are a real estate agent, find a really good loan officer and partner up.  What's next?  Should real estate agents also be home inspectors, appraisers, etc.?

Mar 31, 2009 04:37 AM
Brien Berard
Remax Professionals Laurel MD - Laurel, MD
Maryland Real Estate Agents - Laurel Real Estate

no way could I be a Realtor and a loan officer.  Too much work!  Though I must admit, sometimes I get really frustrated with loan officers.   However, when you get a good one, they are invaluable.

Mar 31, 2009 07:23 AM
Richard Weeks
Dallas, TX
REALTOR®, Broker

Melissa,

I would say no problem if they do not represent the buyer or the seller.

Mar 31, 2009 10:11 AM
Mike Frazier
Carousel Realty of Dyer County - Dyersburg, TN
Northwest Tennessee Realtor

Melissa,

How can a person be the best realtor or best loan officer if they are wearing two hats?

Apr 02, 2009 03:07 AM
William Collins
ERA Queen City Realty - Scotch Plains, NJ
Property and Asset Management

Melissa,

Thanks for the post. Clearly there are varying opinions on this issue. Here in New Jersey you can do both, as long as there is full disclosure. That being said, from my experience most agents choose not to wear both hats.

May 01, 2009 06:34 AM
Raymond Denton
Homesmart / Evergreen Realty - Irvine, CA
Irvine Realtor®

No, it's not a conflict.  I'd only want to do both roles on my own transactions.  I can depend on myself more then anyone else, and if the deal doesn't happen, there's no finger pointing - I'm 100% responsible.

Jan 13, 2013 03:10 AM