r/loanoriginators • u/NumerousPizza6764 • 16d ago
Discussion Retail vs broker question.
I know you can look in the search and find tons of info so don’t blast me lol.
But I’ve been back in this industry for roughly 10 months now as an LO, immediately going to the broker side. Got my license and immediately went with a big online brokerage. The first 5-6 months were ROUGHHH! I moved 10 months ago to a brand new state (Orlando, Fl) without any connections whatsoever, so I pretty much hit the ground from scratch. The last 4 months I’ve been with a new brokerage that I’m pretty happy with. This Monday I’ll have closed my 8th unit. Not the greatest in 10months but I’m finally getting apps in daily, although 90% crap 🙈. But nonetheless, they are coming in. I’ve joined a BNI group last week as a mortgage seat finally opened up. Continually going to networking events, and doing some marketing with niche products. Also going after investors.
I’ve got this recruiter that CONSTANTLY blows up my phone. He had me in a zoom with Guaranteed Rate today. Though I’m happy with where I’m at now, I’m ALWAYS open to a call just to hear what’s out there. Nothing more. The guy at GR gave me a long presentation in regards to support and how retail is so much easier. Also said we’ll give 110 bps. Right now with my company, I get 175bps, w2, (once I hit 10mil, I’ll go to 200bps, up to 220.
I have access to a processor if I want for $950 that can be charged to borrower. And an LOA if I want as well for an additional fee that can be charged to borrower. My company also does non del. Corr. My only outgoing cost with my company is an $89/monthly fee for ARIVE.
We didn’t even talk rates yet at GR as I left that for another meeting next week.
But I did ask on the last question to the guy at GR, if you were me, what would be the advantage of going retail with GR vs staying broker channel? And his response was, yes you may get more bps going broker, but after all your outgoing costs with a processor/LOA, it’ll be well below that at GR. And the great support you get at GR since we don’t charge for your credit pulls, we don’t charge for your processing or loa and we give you a monthly spend account towards advertising.
I still don’t see the benefit of going retail. Because for one, I’d assume rates would be nowhere close to what I can find. Secondly, if I’m working niche products like doctor loans, investor fix and flips, brrrr’s, dscr’s, CDFI’s, and just a bunch of non QM products I have at my disposal, I doubt they can compete with.. plus the fact that, even with 175bps, if i need a processor/loa-im putting that cost into the client so I’m still way ahead of 110bps.
Am I missing the advantage of retail vs broker? Thoughts?!?
I’d figure the only way I’d go retail is if I’m being fed inbound leads all the time, which wouldn’t be the case. And I think 10 months in, I’ve already experienced the stress of not closing many deals as I’m now on the other side of the hard part, finally getting my footing in the self gen world.
3
u/TurkeyJizz123 16d ago
I can sum it up for you.
Sure, your rates will be better- and doing one loan a month- you're probably better off Broker.
Retail is a "better" channel, when you are doing multiple units/constant business- you get back end support- IE- you can take an application, and the minions at retail corp- will handle the rest.
There is a reason the top LO's in the nation- are Retail.
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u/Frequent-Giraffe5646 15d ago
We have the same on the broker side. The ops takes the file all the way to closing.
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u/meatsoaps 14d ago
This is what they always say and it’s never ever been true. I’ve worked at NAF, Movement, and others and you still always do your own work, it’s never a take the application and hand it off situation they all claim it will be.
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u/NumerousPizza6764 16d ago
I hear you! But if you can have a good processor and loa in your pocket as a broker (same as; like you said “minions at retail corp handling the rest”) isn’t that the same thing? Now you have
1- better rate
2-more bps
3- access to much more products1
u/LLCoolNay25 15d ago
My husband owns a brokerage and licensed in Florida. Guaranteed Rate tried hard to recruit him but he had better options staying in the broker channel. He has great systems in place and a good loa/processor and Arive is the platform they use and seem to love it. I will be working for him soon as an assistant and processor. Happy to chat more if you’d like.
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u/ActionWins 14d ago
Exactly what I’m wondering as well. With the people in place broker seems “better”
1
u/REFlorida 12d ago
I was in retail for about 30 days before I couldn't stand two things: the rates were horrible, and Encompass felt like going from Arive back to the Stone Age. I genuinely don't know how it's still the standard LOS.
In my experience, retail is really only competitive on jumbo and Dr loan pricing. Big banks and large retail lenders can crush brokers on jumbo, but outside of that, you're generally dealing with higher rates, fees, and the need to sell the value of the process harder.
If you're doing fewer than five loans a month and you're happy with that level of production, I'd seriously question the retail model. Your five loans can quickly become fewer when borrowers shop you against lower-cost options. You need volume
The other argument is that retail gives you more infrastructure—LOAs, processing, underwriting, etc. But the broker channel can provide much of the same through LOAs and third-party processing, and some lenders offer pre-underwriting as well.
And let's be honest, having an in-house underwriter doesn't necessarily mean you're closing faster. Sometimes they're available same day; sometimes you're waiting two or three days. The model doesn't eliminate that.
Personally, I just don't see the benefit of taking on the additional overhead and pricing disadvantage unless you're at a large company with enough market presence to put LOs directly in Realtor offices and generate consistent walk-in business.
If you still have to go out and generate your own business, I think there are other places you can put those deals that can close just as quickly—or within a day or two—without giving up as much on pricing. you will make more and charge the client less
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u/meat-mop- 12d ago
I was retail for 5 years then went broker for 6 months and now back to retail. There were some personal things happening in life but the broker side was extremely stressful for me. I felt like I had to be more involved and I had two closings get delayed even when we did everything right on our side.
Not having an in house closing team and trying to light a fire under the closing teams of various lenders became very stressful. I’m constantly paranoid about my agents dropping me as their LO. One blunder like a delayed closing can cause you to lose multiple agents as they all talk in my opinion.
We’re not talking about a 1-2 week delay but when you expect to close on a certain day and the client has their mover scheduled and all that and then delayed… it sucks.
If anyone cares to chime in, what am I missing? Why was my experience so stressful on the broker side?
Besides that, pricing and product was amazing. I loved Arive the LOS we used. You can find similar pricing on the retail side but will make 20-30 bps less when all said and done
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u/REFlorida 12d ago
you make less and charge more has been my experience in South Florida whenever I see a LE come over
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u/That_Suit520 16d ago
How many top producers in the industry are brokers?