I see a lot of topics concerning full commission brokerage VS. discounters...and these topics tend to heat up very quickly.
I am not here to judge anyone or claim that one is better than the other, after all I am not a real estate agent and I would never tell any of you what you should charge for your services as it is not my place. Actually, I would expect anyone of you to defend your commission.

I do have a question though because it seems very contradictory to me. Why is it that real estate agents who charge a full commission and refuse to even consider the idea of the flat fee, always seem to come down on loan officers who charge more than 1% for their services? I am not here to start a fight but I have always been baffled by that. If any LOs charge more than 1%, the common consensus is that he/ she is ripping people off but at the same time less than 6% commission is out of the question for most agents.

I'm trying to figure out what makes us so different in your eyes. Are LOs less deserving? Are their jobs less significant? Easier with less responsibilities?

Don't get me wrong, I am not talking about overcharging our clients on the front end AND the back end, I am only talking about charging a fair price for our services.

How do you define a fair price? By the amount of work that will be required to get the client approved. How many hoops will we have to jump through, how many conditions are we going to have to overcome...Mortgage lending is not a "one size fits all" business. If it were, everybody could do my job...and unfortunately, a lot of people tend to think they can.

Mortgage Planning, when done the way it is meant to be done, meaning when it involves more than simply comparing interest rates and closing costs, can help borrowers build a solid financial future. A mortgage is a financial tool, and a home is the biggest asset on our clients' balance sheet. It requires careful planning and consideration.

I will defend my commission as much as you. I provide a service, remarkable financing experiences and yet, never overcharge anyone and don't hide the rebate ever. I see and hear agents say "You dont pay for a commission, you pay for experience" as to justify the 6%. So if we only charge 1% does this mean we, as LOs, are incompetent???? Or do some agents not want us to charge more than 1% because they are already overcharging the clients and something somewhere had better give so it may as well be us instead of them????

I will charge a fair price and sometimes a fair price is more than 1% but never more than 2%.

We don't dictate or argue how much you should get as a commission, so what make you feel like you have the right to do so? I'm not trying to start a fight, I am trying to understand the reasoning behind this.


I'm hoping for respectful and professional replies only.

Why would agents care what your loan origination is unless their clients were the ones complaining?

It's up to my clients to pick a loan, not me, so I wouldn't "complain" unless it was on behalf of my client and at their direction. If all clients wanted to pay you 3% for your loan, then you'd make more money, but there are many lenders offering 0%-1% origination.

We're not dictating your fees, the clients are. It sounds like the agents want to work with you, but you if you aren't competitive, the client will just pick another lender. It doesn't effect our pay, so I don't see why the agent would care enough to speak to you about your fees unless they knew the client was unhappy and was going to work with someone else.

I'm only going by what I have read on this board.
But quite honestly, I have read many posts where agents say that they are the one who plant the seed in the clients' mind regarding how much their LO is getting paid. Anything over 1% and some agents shout "OH my! You are getting overcharged!!" Many will try to make the LO look bad to make themselves look better and be seen as "the hero". What do they know about our clients' financial situation????

It is a free market, Charge what you will, I dont care. Your job is different to ours I am not going to dictate to you your prices, just please make sure you offer professional advice and service for your money

Another point to make is the origination fee is a % of the loan amount, whereas the realtor's commission is a % of the sales price.

And to Dee in Austin...LOs have the ability to price their loans with or w/out origination fees. If a borrower wishes not pay the origination fee, the LO simply adjusts the rate upwards to cover the 1% orig. fee into the rate. Works just like discount points.

I understand that, but it's not agents who care about this, it's the clients. If the client receives a good faith and the total costs are higher without a reduction in the rate, they're the ones complaining. If an agent is complaining about your rate, then perhaps the LO hasn't explained their value or why the client should pay more.

I haven't seen origination points higher than 1% except on subprime or "creative" loans, so if you charge more, you should be prepared to explain why. Same thing for agent fees. If I charge higher than most agents, I need to create better value in the transaction that helps people understand why I deserve more. LOs are no different in that aspect.