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MLO vs Realtor: which one has more earning potential in California?

Digging4gold

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My advice is coming from the state of Georgia...

I have my real estate license and my mortgage loan originator license. I tried being an MLO for about 12 months and hated it. I prefer being a realtor. I like to be out and about and run around all day. The highest paid MLO's that I know are available to their clients/realtors 7 days/week. If you don't answer the phone when a realtor/buyer is calling to get a pre-approval they will go on to the next one. And they will call on a Sunday morning at 9:00 am and you better answer. There is no loyalty. There is no loyalty in being a realtor nor an MLO. To be successful as an MLO longterm, you need to build a big team of assistants to support you. The MLO commissions are smaller...usually 0.5% or 1% of the purchase price. Realtor commissions are larger...usually 3% to 6% of the sales price before you split with your broker. So as an MLO you need to generator MORE DEALS.

Longterm, I think that being a realtor is a better choice. I know plenty of agents in their 70s and 80s that are semi-retired, still working as realtors and making $100K or more per year. I only know ONE MLO in her 70s that is still working. She works part-time and she makes around $100K per year. But she's the only one. So it really just depends on what you want for yourself long term.
 

SouthernNotCountry

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Depends on your area and market. Where I am, MLOs, there's always plenty loans and refis. I know plenty that are making lots and lots of money and live in the most expensive parts of the city. There are too many agents and not enough inventory to really do well in most areas, especially if you're a new agent. But again, depends on your area. The avg per yr for agents is around $30k but of course there are those doubling and tripling that. The overhead as a REALTOR is also much higher than a MLO, so keep that in mind as well.
 

Digging4gold

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Depends on your area and market. Where I am, MLOs, there's always plenty loans and refis. I know plenty that are making lots and lots of money and live in the most expensive parts of the city. There are too many agents and not enough inventory to really do well in most areas, especially if you're a new agent. But again, depends on your area. The avg per yr for agents is around $30k but of course there are those doubling and tripling that. The overhead as a REALTOR is also much higher than a MLO, so keep that in mind as well.
It depends on what type of company you work for as an MLO.

Most mortgage companies hire MLOs and only pay them 100% commission. You're responsible for your marketing costs just like when you're a realtor. You're also responsible for generating your leads/referrals. They will not hire you unless you already have connections and the ability to generate your own leads/referrals.

Banks only hire MLOs that already have connections and the ability to generate their own referrals. They will give you basic marketing materials like business cards and branded cups, mugs, caps, etc. But they won't give you any money to go out and market yourself with billboards, commercials, online ads, social media ads, buy lunches/dinners for realtors or whole realtor offices, etc. That's up to you.

I see MLOs come into this business two ways:

#1 They get a job working as an assistant to an established MLO. They earn a salary working as the assistant and they are also allowed to do any deals they get from their own referrals/leads. Once they build themselves up, they stop working for the established MLO and go out on their own.

#2 They come from a moneyed family, they have connections to build their lead/referral base and they have the financial resources to market themselves.

Whether you're planning to be an MLO or a realtor, you need start-up capital. Treat it like you're starting a business because it is a business. You need to have savings to cover your living expenses for the first 6-12 months and also the start-up money for your marketing. You also need a solid marketing plan.
 

UWildNoseyb

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Whether you're planning to be an MLO or a realtor, you need start-up capital. Treat it like you're starting a business because it is a business. You need to have savings to cover your living expenses for the first 6-12 months and also the start-up money for your marketing. You also need a solid marketing plan.
Most ppl use social media
 

Juny.B.Jones

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Whether you're planning to be an MLO or a realtor, you need start-up capital. Treat it like you're starting a business because it is a business. You need to have savings to cover your living expenses for the first 6-12 months and also the start-up money for your marketing. You also need a solid marketing plan.
This advice is underrated
 

Digging4gold

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Most ppl use social media
Social media costs money. Facebook and Instagram have strategically changed their algorithms so that it's impossible to build and keep a following on business pages/accounts without paying for ads and boosted posts. Someone may like your business page but your posts will never show up in their feed. You have to boost your posts to continue to show up in followers/non-followers feeds.

I helped a friend with marketing his small business (fast food restaurant). He allowed me to spend around $6,000 per month on Facebook/Instagram ads and boosted posts. His sales increased from $15,000 per month to around $75,000 per month within 6 months. It costs money to make money.
 

DontTellItAll

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Realtor. Loan Officer's earning potential is capped around $40k to $75.
No ma'am it is not. When the market was ridiculous back around 2004-2008, the MLOs at the company I worked for were easily pulling in anywhere from $5k-$25k monthly. An MLO can make more than a realtor depending upon the market and whether or not they receive bonuses, which ours did. A realtor can of course make more than an MLO depending upon whether the realtor is a high-end realtor, mid-range or lower market.
 
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