The Mortgage Broking Industry is faced with an uncertain future and significant changes to its structure after The Royal Banking Commission released its recommendations. One of the recommendations that has the potential to affect the financial position of Mortgage Brokers (“Broker/s”) is the recommended ban on trailing commissions (ongoing commissions from the banks for the lifetime of the loan, which ultimately the customer pays). This ban would allow Brokers to only charge an upfront commission to the customer.
Brokers who are concerned about their financial future within the industry could consider alternative career opportunities should the recommendations get implemented by the Government.
We discuss our Top 5 Reasons Mortgage Brokers Make Good Real Estate Agents with the help of Validum Student Robby Antonio (Director of Eclipse Mortgages) who has recently completed his Full Real Estate Agent Licence Course with us.
Even though a Broker is in the finance industry and a Real Estate Agent (“Agent”) is in the property industry, essentially they both help clients buy and sell real estate.
Robby Antonio said “As a Broker, I work with clients who are looking to purchase properties – I take them to developers and recommend they talk to particular agents, so you’re already on the lookout to help the client with the property aspect.”
He went on to say “I believe it’s a natural progression to move into a real estate career and become a ‘one-stop-shop’ for my clients as I understand how the property industry works at a base level from working as a Broker.”
With Brokers handling a high volume of applications, they begin to see property values in various locations and they also get a general understanding of the buying and selling process of property.
Similar to Agents, Brokers can also work for themselves. They are usually confident decision makers and take full responsibility for their workload and schedule just like Agents. Brokers understand what it’s like to manage every aspect of their business and personal brand.
Antonio said “They are extremely comparable, as a Broker you have to be very driven and independent, go and source new business as well as keep your current clients satisfied, which is very similar to an Agent.”
As a Broker, if you love the independence and freedom, a transition into Real Estate would be easy for you as you’re familiar with the type of work style you would need as an Agent.
2016 data from the Mortgage & Finance Association of Australia (MFAA) found the average Broker earns $83,000 in gross upfront commission and $60,000 in gross trailing commissions per year.
Indeed states “the average salary for a Real Estate Agent is $104,637 per year in Queensland, which is 17% above the national average.” While the Courier Mail stated “some agents are making upwards of $500,000 per year, with top sellers making in excess of $1 million.”
Antonio said “In both positions, you work solely for the client and both incomes are completely dependent on how much work you choose to put in.”
Both industries offer commission based work which is a key motivator for some. So, if you’re a Broker – working for commission transferring into Real Estate won’t come as such a change.
Agents and Brokers know what it’s like to work with a client at a very stressful time. A Broker knows how to communicate the details around each mortgage and loan and explain how it all works in simple, plain terms. They must make the process as smooth and pleasant as possible – as well as communicate with their clients in several ways, over the phone, email and in person.
Antonio says “It’s vital for Brokers and Agents to be able to negotiate with clients to secure business and explain why you are different from any other Broker as well as negotiate with banks – just like Agents negotiate with buyers and sellers to get an acceptable contract price.”
Strong skills across various communication methods puts a Broker in a great position to succeed as a real estate agent as both careers need similar communication skills.
The job of an Agent is getting listings, just as the job of a Broker is getting borrowers. Antonio says “with so many Brokers, we have to compete for the same clients, just like Agents – we have have to know what makes using us better than any other Agent or Broker, then we have to convince our potential client to use us exclusively.”
Brokers will find their experience in selling and presenting themselves to potential clients will help them excel in a Real Estate career.
Antonio says “Smart Brokers would diversify their income in a time like this. If Labor does change the policies around how Brokers are paid, it will really affect the brokerage livelihood, so being qualified to do the closest thing to my job now (Real Estate) makes sense.”
So, if you or someone you know is a mortgage broker and is feeling the pressure of the recommendations from The Royal Commission and is considering becoming qualified in another industry as a back-up… a career in Real Estate might just be the perfect fit
Think real estate could be your next career choice? Let Validum help you on your journey to real estate success, with user friendly real estate courses and personalised customer service. Experience the Validum difference today and call us on (07) 3193 5270 or visit www.validum.edu.au.