What do you think would be more profitable to start?...A real estate brokerage, a mortgage brokerage, or a mortgage bank?

Thanks.

Tough one to answer. With the right people running the show, any of those could be very profitable. For me, the answer is the brokerage just because that is where my skills lie. I have experience with getting business (and sometimes not getting it!).

If your asking because you want to start one, you are going to have to really analyze your skills and/or the skills of those you want to bring onboard to know the answer for sure.

R

I think if you're asking purely from a profit standpoint, I think opening up a mortgage bank is your best bet...

I would of course gravitate to a real estate firm because it's what I do and know the best but when I think of how we all charge and get paid, everyone knows that the real estate person gets a straight commission check and it comes from one number - a percent of the sales price. Clients and customers alike know where to look or how to ask to try and find that information out...

Whereas for mortgage people, I still think most of America isn't well enough educated and don't know where to look, to find out what they're being charged or even think about fees and "fluff" charges. Also, I think most people don't know that they can negotiate many of the fees they're being charged for a mortgage, whereas everyone wants to stick their hand in the (real estate) brokers pocket and try to short change them at closing (you see that all the time)...

Now, as far as the two different types of mortgage companies, I think that a banker is more profitable because they have more control over the fees and charges...

Those are just my thoughts...

Dan Ortiz ABR CRS CREOS (Hablo Espanol)
Licensed Broker/Owner
Manor Gate Real Estate of NY Inc

"If you think hiring a professional is expensive, wait till you hire an amateur" Red Adair

I would definetely go with the real estate brokerage at this point in time, but depends on many factors including market you serve and data compiled on local competition. In Texas there have been several lenders fall offline this year and I'm sure the numbers are similar across the U.S. When it comes down to it, it all depends on your passion, if you are motivated, you can make anything work in any type of economy.

I can speak from experience, as a former owner of a Mortgage Brokerage that it's a VERY tough business, these days. First and foremost, even in the best of times, the compliance issues that you have to continuously deal with are ENDLESS! Every state's Banking Commissioner's Office has VERY different rules, and it's quite difficult to keep everything straight. In fact, if you hold a license in many states, you'll almost be forced to hire a compliance person, on a full-time basis. Also, if you plan on opening a mortgage business, you MUST do FHA, and VA loans, ALL DAY LONG, because nothing else is being approved, these days! The days of 100% financing are LONG gone! I do agree with the feedback from others that it would behoove you to match your skillset with the right business. Good luck with whichever decision you ultimately make.


John from Boston