Difference Between Mortgage Broker And Real Estate Broker
When it comes to buying or selling a home, most people rely on the expertise of a real estate broker or a mortgage broker. While both professionals work in the real estate industry, they have different roles and responsibilities. In this article, we will explore the key differences between a mortgage broker and a real estate broker.
What is a Real Estate Broker?
A real estate broker is a licensed professional who helps buyers and sellers with the purchase, sale, and rental of properties. They work with clients to determine their needs and preferences, provide guidance on pricing and market conditions, and facilitate the negotiation and closing of deals.
Real estate brokers may work independently or as part of a real estate agency. They typically earn a commission based on the sale price of the property, which is split between the buyer's and seller's agents. To become a real estate broker, one must complete a certain number of hours of pre-licensing education, pass a state exam, and meet other licensing requirements.
What is a Mortgage Broker?
A mortgage broker is a licensed professional who helps homebuyers find and secure financing for their home purchase. They work with multiple lenders to find the best loan options for their clients based on their financial situation and creditworthiness.
Mortgage brokers help their clients understand the different types of loans available, such as fixed-rate and adjustable-rate mortgages, and guide them through the application and approval process. They also help clients understand the terms and conditions of the loan, such as interest rates, fees, and payment schedules.
Key Differences Between a Mortgage Broker and a Real Estate Broker
Role and Responsibilities
The primary role of a real estate broker is to help buyers and sellers with the purchase, sale, and rental of properties. They provide guidance on pricing and market conditions, facilitate negotiations, and help clients navigate the closing process.
A mortgage broker, on the other hand, focuses on helping homebuyers secure financing for their purchase. They work with multiple lenders to find the best loan options for their clients and guide them through the application and approval process.
Compensation
Real estate brokers typically earn a commission based on the sale price of the property, which is split between the buyer's and seller's agents. The commission is usually a percentage of the sale price, typically around 5-6%.
Mortgage brokers earn a commission from the lender for each loan they originate. The commission is usually a percentage of the loan amount, typically around 1-2%.
Licensing Requirements
To become a real estate broker, one must complete a certain number of hours of pre-licensing education, pass a state exam, and meet other licensing requirements.
To become a mortgage broker, one must also complete a certain number of hours of pre-licensing education, pass a state exam, and meet other licensing requirements. In addition, mortgage brokers must also be licensed with the National Mortgage Licensing System (NMLS) and undergo annual continuing education.
Client Relationship
Real estate brokers work closely with their clients throughout the home buying or selling process. They provide guidance and support, help clients navigate challenges, and advocate for their best interests.
Mortgage brokers also work closely with their clients, but their role is more focused on securing financing for the home purchase. They help clients understand their options, guide them through the application and approval process, and provide ongoing support as needed.
Conclusion
While both real estate brokers and mortgage brokers work in the real estate industry, they have different roles and responsibilities. Real estate brokers help buyers and sellers with the purchase, sale, and rental of properties, while mortgage brokers help homebuyers secure financing for their purchase. By understanding the differences between these two professionals, you can make more informed decisions when buying or selling a home.