Teaching a class recently covering the topic of the Texas Mortgage Broker License Act, it struck me that 1/2 to 2/3rds of the class simply didn't get it. Some attendees were lawyers, some were mortgage loan officer candidates, some were practicing mortgage brokers attending for the sake of continuing education, some were REALTORS"? who proudly displayed a buyer accreditation on their lapels while seeking to understand the loan process at a deeper level and yet some of the remaining attendees were accountants, attending for accountancy continuing education. It was an exciting class, course and very demanding. What came out of the Q&A sessions was this one gigantic fact....

Mortgage Brokers and Real Estate Brokers don't play by the same rules and most Buyer Representatives just didn't' get it! They do now.

Here are three (3) basic points to ponder that demonstrate core differences in the rules at play when a buyer becomes a Client by proper engagement of a Buyer Representative REB.

(1) The buyer is a "customer" to the Mortgage Broker (MB) but the same buyer is a "CLIENT" to the Real Estate Broker (REB). Hmmmm......wonder "which" loan the MB will recommend/suggest to the "customer", the loan that is the best for the funds source or the loan which is best for the "customer". And, I wonder "which" loan the REB would "advise" the "client" to consider, the loan that is the best for the funds source or the loan which is best for the "client". MBs do not have a client relationship with the borrower as the MB is a real estate financing professional acting as an independent contractor.

(2) A Real Estate Broker (REB) can receive compensation for a referral of business, either "client" or "customer" business while the Mortgage Broker can refer but cannot receive compensation for the referral of a loan "customer".

(3) The third point is the form of a question? You will supply the answer, please, in your response to this short blog. "How can a Real Estate Broker (REB), inclusive of associated licensees, offer genuine Buyer Representation services without having a fundamental basis of the mortgage loan process?"

Remember: "When the Real Estate Broker (REB) has a "Client-Buyer", the "Rules" of the REB do not operate the same as the Mortgage Broker (MB)." Engage the transaction with the proper awareness of which rules are followed by which player and practice knowing that you are "EARNING MORE" while "RISKING LESS!"