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View Full Version : Freelance mortgage agent: Is it worth trying? Pros, cons?


RickJay
06-14-2008, 11:54 PM
I like my job but I want more money. A local mortgage broker, Northwood Mortgage, is always looking for new agents. So I went in and talked to them. They like me. They don't care if I have a real job.

The cost of entry - of course, they make you pay for your licensing and training and I've no doubt they're making a margin - is about twelve hundred bucks, which I can afford, but, hey, you know, $1200.

The potential rewards are, however, extremely lucrative. A market-average deal would result in a payout of $1000 to $2000, depending on the size of the mortgage. So one deal a month would be a fairly nice side business, two would be amazingly lucrative, and at three you'd have to start considering doing it full time.

It's NOT Amway; you aren't recruiting people. This is a job selling mortgages and lines of credit for commission.

Has anyone done this or thought about doing it?

Thoughts? Drawbacks? Pitfalls? Would YOU do your mortgage through a mortgage company, or do you always want to go to the bank?

I'd just like to bounce this idea around. What do you think?

Tamerlane
06-15-2008, 12:15 AM
Would YOU do your mortgage through a mortgage company, or do you always want to go to the bank?

I used a broker ( one of several recommended by my real estate agent ), after the Wells Fargo folks said they frankly couldn't quite beat him on a 30-yr fixed ( they were pushing heavy on the ARMS at that time in the Bay Area, trying to leverage folks into more expensive houses ). I actually tried three and went with the one who threw out the least bullshit and was the lowest key re: pressure tactics to take a variable-rate loan ( he tried, but quickly relented ).

As long as it saved me a smidgin of money and appeared to be all above board, I had no problem using a broker.

Cat Whisperer
06-15-2008, 02:30 AM
We used a mortgage broker twice now (first to buy and second to re-finance), and he was very good. I did notice that he was available practically day and night, always returned calls promptly, and willing to drive a long way to sign documents and such, and that was very valuable to us. I have a supervisor who had a mortgage broker who would hardly even return his calls - he was very frustrated with her. He also got us a good deal. We'll be using him again for our next mortgage.

Darryl Lict
06-15-2008, 03:24 AM
I hate to be negative, but isn't this period about the worse possible time to try to embark on a mortgage broker career? There must be thousands of people scrambling out there trying to push mortgages.

Please forgive me if I'm dead wrong as I'm not in the business. Perhaps you should talk to some mortgage brokers and ask them how business is,

Cat Whisperer
06-15-2008, 11:33 AM
The Canadian real estate market is not the same as the US one (mostly because our mortgage laws never allowed us to do what has blown up so spectacularly in everyone's faces in the US). Calgary, Vancouver and Toronto are very hot markets (albeit down from superhot the last couple of years). Rickjay of course can speak to the Toronto market much better than I can, but if you're going to be a mortgage broker amongst the many that are already in the business, those would be three good places to be one.

Throatwarbler Mangrove
06-15-2008, 12:16 PM
This business model is essentially the same model used by independent brokers of insurance, or mutual funds.

- The companies that originate or "produce" these products are faced with a problem: They essentially trade in commodities, namely money. Insurance, mortgages and investment funds are all basically agreements between two parties to exchange some amount of money at some future date. There is really nothing to differentiate their products from their competitors. If Company A sells a Mortgage/Insurance policy/Mutual fund with terms B, and it works well, there's nothing stopping Company X, Y, and Z from flogging the same product.

- The only bit where this makes a difference to the end customer is the customer service they receive from the salesman - the guy who can come to your house and explain everything to you, help you evaluate your needs, make recommendations, etc. Basically, the "retailing" aspect. The big mortgage companies are not in the business of sending people to your house to listen to your bullshit, that's not their core competency, so they sell the products "wholesale" to the mortgage brokers who ARE in this business and are good at it. Same reason you want to buy Nikes from Sport Chek, and not Zhejiang Number 4 People's Socialist Democratic Shoe Factory.

- You say it's not Amway, but it's really not that far off the mark: The insurance companies want YOU to do this, because YOU have friends, who are more likely to buy crap from YOU than some call center in Bangalore. Of course they don't know how smooth a talker you are or how many friends you have so they are obviously not going to pay you to get started or cover any of your start-up expenses, but if you do sell something, you'll naturally get a cut.

I don't have a problem with this business model, plenty of people buy stuff this way and most of them are probably better off for it, but you will have to evaluate whether you have the correct personality for this kind of work. Once you get through your existing "circle", you're going to have to come up with some way of marketing yourself beyond that circle, and THEN, it becomes a real business. It is possible that you end up selling a couple of mortgages to some friends and at least break even before you get tired of it, or it is possible that you're really good at this, enjoy going to dog-and-pony shows to meet people and prospect, and generally live the life of a Realtor (TM), In a normal market, the chances of success are probably no better or worse than any other industry.

In the US, excessively loose lending standards meant lots of brokers made a lot of money, often through fraud. The Canadian market is headed in this direction, we're usually a couple of years behind the US and I imagine will go through a similar phase, so there might still be time to get on board that ship before it sails.

Nanoda
06-15-2008, 12:49 PM
Not sure if I used one; I bought my house 2-3 years ago, in the middle of the last housing boom here. I'd spoken to my bank ahead of time, who'd forwarded me on to an agent who apparently worked at arms length to the actual lenders, or I seem to recall TD uses 3rd parties, I'm not sure.

In any case, when I found my house, I needed to get everything done ASAP. All I know is that I ended up infuriated with her after she blew three promised deadlines in a row, along with having two meetings she'd organized with my branch manager get rescheduled the-day-of. I actually shouted on the phone, for about the 2nd time ever. Her excuse was that the actual approvals happened in Vancouver, but c'mon.

Don't know what my point is... communication is key? Actually know WTF is happening with your paperwork? :confused: I guess when things go great, you'll get some nice dough, but when things go wrong, you'll have some previously nice people very angry at you. On preview, Throatwarbler Mangrove seems to have it down.

ZipperJJ
06-15-2008, 09:33 PM
When I bought my house, I talked to 5 friends who had also just bought houses and got the names of all of their brokers (they all happened to be happy with their brokers). Then, I called each one and had a nice long chat to explain what I wanted and some of their ideas of what they could do.

Then, the bidding started. They all called and emailed me regularly to give me instructions, ask me more questions and give me offers. I talked to them all on the phone regularly over a few days, pretty much pitting them against each other.

When I chose my guy I went to his nice big swank office and he was really cool and personable. He had all sort of support staff to take care of everything that had to be done, and it got done on the spot. He had a lot of time to talk to me and explain stuff. It honestly felt like a good "relationship." and I think the others I talked to would have had the same sort of "relationship" with me, as well as swank offices and support staff (which is why my friends recommended them).

Anyway, all of the stuff that made me choose my broker(s) seems dependent on the fact that they were mortgage brokers 24/7 and had support staff. While in the heat of choosing the person I was going to work with, if I had to wait on answers until after 5 PM I would have dropped the person right away. Not because I'm a jerk, but everyone else's offerings were so similar and everything had to be done so quickly that I just didn't have time to wait around for someone to be done with their day job so I could give them my money.

RickJay
06-16-2008, 09:56 AM
The Canadian real estate market is not the same as the US one (mostly because our mortgage laws never allowed us to do what has blown up so spectacularly in everyone's faces in the US). Calgary, Vancouver and Toronto are very hot markets (albeit down from superhot the last couple of years). Rickjay of course can speak to the Toronto market much better than I can, but if you're going to be a mortgage broker amongst the many that are already in the business, those would be three good places to be one.
The Toronto market is slower than it was, but okay. There seems to be a lot on the market in my area right now. Nothing happening in Canada remotely approaches the catastrophe that has befallen the USA.

Having said that, there's always mortgages. Even if people don't buy new houses, they have to renew mortgages.

You say it's not Amway, but it's really not that far off the mark: The insurance companies want YOU to do this, because YOU have friends, who are more likely to buy crap from YOU than some call center in Bangalore. Of course they don't know how smooth a talker you are or how many friends you have so they are obviously not going to pay you to get started or cover any of your start-up expenses, but if you do sell something, you'll naturally get a cut.
This is off-topic, but... that's not how Amway works. Yes, they sell products. However, the real drive behind Amway is not to get you to sell products at all. It's to get you to sign up MORE Amway dealers. They don't really want you to sell more soap, they want you to recruit more Amway people. I went to an Amway meeting once because I was forced to by my boss - God, that's a story - and there was not a single mention, not one reference in two hours, of Amway's products. Their entire business model is the pyramid scheme part of it; the products exist solely to make it technically legal.

Great feedback so far, people. Please keep it coming.

Are there any questions you think I should ask the Northwood Mortgage people? Perhaps I have not asked the question you think is super important.

Throatwarbler Mangrove
06-16-2008, 10:19 AM
This is off-topic, but... that's not how Amway works. Yes, they sell products. However, the real drive behind Amway is not to get you to sell products at all. It's to get you to sign up MORE Amway dealers. They don't really want you to sell more soap, they want you to recruit more Amway people. I went to an Amway meeting once because I was forced to by my boss - God, that's a story - and there was not a single mention, not one reference in two hours, of Amway's products. Their entire business model is the pyramid scheme part of it; the products exist solely to make it technically legal.

I'm aware of how Amway works, Realtors, mortgage brokers, and insurance brokers all operate on a spectrum of the same kind of business models - recruiting people as a form of marketing.

Think about it: Is the mortgage company really in the business of selling mortgages? Or are they in the business of recruiting as many people as possible to become mortgage brokers (at their own expense, with no risk to the recruiting compnay), knowing that most of these people will at least manage to flog one or two mortgages to their friends and family before giving up (again, no loss to the recruiting company), while maybe 1 or 2 out of 100 will find they are really good at it and end up making them lots of money before going off to start their OWN mortgage broker office, starting the cycle again? This whole business, as you can probably see, depends on the actual PRODUCT being basically a commodity, and the seller relying on service and relationships to sell it.

You can bet that any company that actively seeks out new salesmen in the way that you have described will operate along broadly similar lines.

Tastes of Chocolate
06-16-2008, 06:24 PM
Are there any questions you think I should ask the Northwood Mortgage people? Perhaps I have not asked the question you think is super important.

I've be sure to verify that there are no other costs, besides the $1200 licensing and training fee. Do they charge for office space? Support staff? Telephone use, computer time/access. Association fees?

Also consider: You say you have a job you like, and are looking for some side money. Can you dedicate the time, at all hours of the day, to work with a potential customer, RIGHT NOW? Can you drop your regular work, to answer a clients questions or fill out the paperwork?

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