When it comes to the real estate business, there’s a good chance you’ll work with a real estate agent, broker, loan officer, or realtor at some point. These are terms and titles that get thrown around a lot, often interchangeably. A particularly puzzling pair is the difference between mortgage broker and real estate broker, which we’ll get into. There are distinct differences between each term, and understanding what they are will improve your understanding of the industry, and help you know who to talk to in certain situations, and more.
Summary of each
To start, we’ll define each term, as well as what their primary role (or roles) in the real estate industry are. A common similarity to give us a baseline is each of these professionals is licensed to help you rent, sell, or buy a property. Now, let’s discuss in more detail:
What is a real estate agent?
Real estate agents are professionally licensed individuals who help others buy, sell, or rent real estate. While requirements vary from state to state, general criteria include:
- Over the age of 18
- Legal resident of the U.S.
- Complete their state’s pre-licensing class
- Pass their state’s real estate licensing exam
- Undergo a background check
- Be sponsored by a licensed real estate broker
- Maintain their real estate license through continued education
What do Real Estate Agent do?
Real estate agents act as a middleman between a buyer and seller for a property (and owners and renters), connecting the two parties and organizing transactions. Agents will also advise their clients about market conditions, arrange property walkthroughs, and provide guidance through the purchase process.
What is a real estate broker?
A real estate broker is an agent who has continued their education and completed additional training and license requirements to receive their state’s real estate broker license. Similar to real estate agent licenses, some general requirements for a broker license include:
- Complete their state’s pre-licensing class
- Meet experience requirements
- Pass their state’s broker exam
- Undergo a background check
Another type of broker in the real estate industry, which we’ll get into more detail on below, is a mortgage broker, who connects buyers and lenders (rather than buyers and sellers) to set up loan contracts. Mortgage brokers also study credit reports, lending contracts, interest rates, and other financial information to make sure that their client gets the best deal for their situation. In most instances of residential real estate, mortgage brokers need an NMLS license, which also varies by state.
What do Real Estate Brokers do?
Real estate brokers do many of the same things as real estate agents, but also can own their own firms and often negotiate, arrange, and oversee real estate transactions. They also have various additional responsibilities such as hiring and training agents, marketing, and writing up offers for properties.
As mentioned above, mortgage brokers focus on the financial aspects of real estate, including researching the latest interest rates, loan terms, and more. Often, mortgage brokers are seen as someone who will look out for their client's best interests, and ensure that they get the best deal or the best opportunity for their circumstances and financial needs.
What is a mortgage broker?
As we said previously, a mortgage broker is a financing professional who finds the best mortgage lender and the best interest rate for their clients. A mortgage broker does not lend clients any money, but rather acts as an intermediary between clients and lenders. For FHA loans and conventional loans, mortgage brokers are required to have an NMLS license. However, for alternative non-QM and DSCR lenders, such as Visio Lending, a broker's license is not needed.
What do mortgage brokers do?
Mortgage brokers maintain ongoing professional relationships with loan officers and mortgage lenders. The successful mortgage brokers have a wide arsenal of loan options and know the best lenders for a client's loan needs. A client will have to pay the mortgage broker a fee. However, this is worth it for many clients since mortgage brokers act as an intermediary between them and the mortgage loan originator, advocating on their behalf and finding the best deals. Many investors who are professionals choose to work with mortgage brokers for help securing financing at the best rates and terms.
What is a loan officer?
A loan officer is a salesperson who works directly for a credit union, bank or other type of lender. They work directly on the financing side to guide the client through their entire loan process.
What do loan officers do?
Loan officers are in the business of closing loans. They'll provide quotes for a given property, gather loan application materials, provide approval letters, and move your loan into processing.
What is a realtor?
A realtor is a real estate professional (not necessarily a broker or agent) that is a member of the National Association of Realtors (NAR). Realtors can be a range of real estate professionals, including property managers, appraisers, counselors, brokers, agents, and more. By becoming a member of the NAR, individuals agree to follow the NAR’s strict Code of Ethics, which is a set of guidelines around the realtors’ duties to clients and customers, other realtors, and the public.
What do Realtors do?
Realtors can have a wide range of responsibilities because many different types of real estate professionals can be members of the NAR. The common thread among all realtors is following the NAR’s Code of Ethics and its 17 articles, which govern members’ conduct and services to serve clients’ best interests.
So what’s the difference?
To summarize their differences, while realtors, real estate brokers, mortgage brokers, loan officers, and real estate agents are all licensed professionals, there are still some key differences. When you are comparing real estate agents vs. real estate brokers, agents are the “base level” of real estate professionals and have to work for a broker or brokerage firm. Brokers are a step up from real estate agents, havinge completed supplemental training and licensing requirements, and can now own their own real estate firm (and can hire other real estate agents to work for them). In other words a real estate broker is still a licensed real estate agent but with additional license requirements.
The difference between a real estate agent vs. a realtor is simple. Realtors are real estate professionals who are members of the NAR (National Association of Realtors) and follow their heavily regulated Code of Ethics.
The difference between real estate agents and mortgage brokers comes down to working on finding properties vs. financing them. Often, clients work with both mortgage brokers and real estate agents. The mortgage broker will help secure a loan, and the real estate agent will help with the home purchase. Unlike a mortgage broker, a loan officer works directly with a specific lender. A mortgage broker will shop all the lenders to ensure the best rates and terms for their buyer.
Visio can help your real estate business
If you’re a mortgage broker looking for additional revenue streams, our Broker Program is one of the best in the country. Using our program, you can earn up to 5% per closed loan and we do not require any NMLS licensing (except for in California or Arizona), making it much easier to look at opportunities across multiple states. If you’re a real estate agent or realtor, our Referral Program is also a great way to earn money with every lead you find.