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Mortgage Broker vs. Real Estate Agent

There are many people in the market for a new home, and there are many different professionals to help them find it. Some people turn to a mortgage broker, while others go through a real estate agent. So which is better? Well, that depends on your specific needs. Here’s a look at the pros and cons of each option.

So, what is the difference between a mortgage broker and a real estate agent? The main difference between a mortgage broker and a real estate agent is that a mortgage broker is a licensed professional who represents borrowers in the process of securing financing for their home purchase. A real estate agent, on the other hand, is someone who helps buyers and sellers find properties that meet their needs and budget.

White and brown house with a yard

However, sometimes mortgage brokers can be real estate agents, even though it is rare. There are a lot of differences between these two professionals, and you will probably have to hire both of them to finish purchasing a property.

Mortgage Broker vs. Real Estate Agent – What Is the Difference?

Applying for a mortgage is a dreadful process. You need to gather all the documents, find a house, sign a deal with a seller, and then wait for mortgage approval. But before all this, you need to find a lender and a property you wish to purchase.

Here is where a mortgage broker and real estate agent steps in, both with different assignments. 

What Does a Mortgage Broker Do?

If you wonder if a mortgage broker is a lender, the answer is no. A mortgage broker is a professional who acts as a middleman between you and lenders. Their job is to help you finish your mortgage application and search for the best deals among the sea of lenders available.

If you have a good mortgage broker, he will make sure you get the best loan possible, explain the whole process, and present you with multiple options to choose the one you prefer.

A mortgage broker is similar to a loan officer, with the main difference being that they don’t need to work for some specific lender. Here are some main responsibilities of a mortgage broker:

  • Gathering financial information from buyers,
  • Finding the best lenders for buyers,
  • Negotiating with lenders on behalf of buyers.

Their qualifications might include some background in finance, marketing, or sales, while many often have experience working in banking. To be eligible to work as a broker, you will be required to have a high school diploma (at least,) and to get a broker’s license. To obtain one, you should take the SAFE Mortgage Loan Originator Test. Along with it, you should take a test on the regulations and rules that are applicable to the state where you plan to work.

What Does a Real Estate Agent Do?

A real estate agent’s main job is to find you the property you wish. The realtor will negotiate the price of a property with a seller and go through all the paperwork regarding that property.

The real estate agent must know current market conditions and trends, all about the area where the property is located, and can even recommend some lenders. You also hire a real estate agent when you are planning to sell a property.

Their qualifications might include the following:

  • Some background coming from marketing or sales,
  • At least a high school diploma,
  • They should be licensed,
  • Depending on the agency they work for or the state they are in, it might be required for them to have some additional education.

Can a Realtor Also Be a Mortgage Broker – the Differences

So, can a real estate agent be a mortgage broker? Here are some main responsibilities of a broker and realtor compared, to clearly see the difference between mortgage agent and mortgage broker.

Mortgage BrokerReal estate agent
Gathering financial information from a buyerLooking at current trends in a market
Mortgage applicationGiving advice for a property price
Finding the best lendersNegotiating the price
Explaining the mortgage processDealing with all the paperwork regarding property purchases

Can a Real Estate Agent Also Be a Mortgage Broker?

It can be possible for your mortgage broker to also have a license as a real estate agent. So you can actually hire a mortgage broker that can find you both a property and a lender. To be a mortgage broker, one needs to have a Bachelor’s Degree in Business or Finance and local certification to be a broker.

In contrast, real estate agents must have a state license and a finished course for real estate agents. It can be quite beneficial to have a broker that is a real estate agent because you will pay one person to do two services.

On the other hand, some brokers work for a lender’s fee, which means the higher the mortgage loan they get, the bigger the fee will be. That can lead to a conflict of interest if you have a broker to act like a real estate agent.

It can happen that this broker only offers you properties with the highest prices, so they can get a higher fee from a lender. So to answer “can you be a real estate agent and mortgage broker” – they can, but it should be something you should stay away from.

When Is Best to Only Hire a Mortgage Broker?

To have a successful property purchase, you will have to hire a real estate agent and a mortgage broker, but there are situations when you don’t need one or the other.

For example, if you already have a property in mind where you know who the seller is, all you need is a mortgage broker to find you the best lender possible. 

When Is Best to Only Hire a Real Estate Agent?

On the other hand, if you already have a broker or a loan officer that you prefer and wish to find the best property, you can only hire a real estate agent to do that for you.

Also, if you have already worked with a realtor and trust them, you can ask them for a lender recommendation.

Most real estate agents will know how to advise you on most things regarding property purchase.

Should I Hire a Mortgage Broker or a Real Estate Agent?

Most often, people do hire both. In fact, people hire real estate agents and brokers or loan officers because it will be difficult to do the whole home buying or selling process without either of them.

An agent will help you with documentation regarding a property buying or selling and find you the best deals. While mortgage brokers will scout for the best lenders possible, you need to purchase property suggested by your real estate agent.

As you can see, even though it is almost like the same line of business, it is completely different, and if you wish to get the best deals, the best would be to hire both professionals. Both a mortgage broker and a real estate agent are important for your home-buying process.