Perceived advantages include convenience and familiarity (more for the agent than for the buyer). Perceived disadvantages include conflicts of interest (between the agent/agent's broker and the lender/loan officer).

Convenience is actually more dependent on the individual loan officer's approach and the unique requirements of a given loan. Familiarity comes from experience; agents I work with who have in-house lenders become just as familiar (and more comfortable) with me.

The conflict of interest issue with in-house lenders can never fully be overcome. For instance, when a lender and/or loan officer pays a fee to the agent's broker to have a desk in their office, and expects to be the default lender recommended to their clients, that's a conflict. Beyond that, in-house lenders often take such referrals for granted and, like many in-house services, do not work as hard to earn and retain business. Service levels for agents and for buyers/borrowers do not tend to be as high. In-house loan officers also tend to offer a narrower range of products, and sometimes even make it clear that they only want easy loans for highly-qualified buyers/borrowers. In today's mortgage market, cookie cutter loans are largely gone, and there are wide variations in program guidelines, underwriting rules, and turntimes. To get deals done, to get the best results, you need the widest possible range of financing options, and loan officers who are client-oriented and roll up their sleeves to get personally engaged on each transaction.

There are some really great loan officers who work as in-house lenders at real estate offices. More often than not, however, they work directly and exclusively for a single financial institution (such as Countrywide). In that case, no matter how good they are individually, they are limited in terms of what they can do. A loan officer at an FHA-approved lender with relationships throughout the mortgage industry inherently has more flexibility, not just in pricing, but also with regard to program guidelines, underwriting rules, and turntimes.

Main reasons are control and communication. These are the two things that a Real Estate agent looses once the loan office takes over. The lack of communication and updates. Not having the ability to know first hand that something is missing, the underwriter needs something and being available to assist in getting it. The perception is an inhouse person will be more available for constant communication.