In written storytelling, a message is more effectively communicated when the writer shows, rather than tells when explaining details within the narrative. The same holds true in reverse mortgage sales, especially when signifying the roles of loan officers as either sales professionals or educators.
Reverse mortgage loan officers are essentially educators. They meet with prospective borrowers and provide all of the necessary information needed to assist the borrower in making an informed decision for whether a reverse mortgage is right for them. But when it comes down to making a sale, there needs to be a distinction between educating and selling, according to a panel of sales leaders at the National Reverse Mortgage Lenders Association annual gathering in San Francisco last month.
“There is an education to the sale, but along with it comes a close,” said Kevin Blakeney, senior vice president of the national field sales team at American Advisors Group (AAG). “Going into the consumer’s home and giving them as much information as possible, but not showing them how this product is going to relate to that person and help get them over the finish line to take advantage of the product and sell them—that’s where fundamentally I think we’re missing the boat here.”
Every sale has an educational component to it, whether it is buying a home, a new car, cell phone, TV or just about any other consumer good or financial product. Reverse mortgages are no different. As much as loan officers feel the need to educate prospective borrowers on every single detail about reverse mortgages, this conversation needs to shift from simply telling a senior what a reverse mortgage is, to showing them how it might benefit their particular situation.
“We don’t want to go out there and teach how a reverse mortgage works,” said Richard Thorpe, national retail sales channel leader at Reverse Mortgage Funding. “Instead, we want to go to a client and show them what a reverse mortgage does.”
There’s a major difference between simply telling prospective borrowers about a reverse mortgage and showing them what this loan will personally do for them, Thorpe added.
The “kitchen table” approach to reverse mortgage sales is common, where a loan officer meets with a prospective borrower in his home to discuss the ins and outs of a Home Equity Conversion Mortgage (HECM), covering everything there is to know, from the basic definitions of term and tenure payments to going over the various costs and figures.
While this might provide an overview of what a reverse mortgage is, doing a data dump like this neglects to address the underlying problems a borrower might have. Failing to address these issues could be the ultimate reason that customer might refrain from getting the loan.
For example, borrowers might just be sitting there at the kitchen table, a bunch of thoughts running through their mind about everything that’s wrong in their life and not know how to explain it to the loan officer who is just rattling off information and not really addressing any of his problems.
“You need to start digging deeper with them and understanding what their problems are and then you can educate them on what a reverse mortgage will do for them,” Thorpe said. “We all know how it [reverse mortgage] works and can explain that, but the reality is that’s not their problem. Their problem is: what is a reverse mortgage going to do for them, not how does this product work?”
Reverse mortgage sales professionals should not necessarily feel the need to teach prospective borrowers Reverse 101, said Nancy Pedone, vice president of national sales at Responsible Reverse Mortgage, Inc.
“They don’t care about that,” Pedone said. “All they need to know is what it means to them and we need to identify the benefits. That’s where we need to go with that, and then move onto the sales process.”
Rather than inundating prospects with a barrage of information, reverse mortgage sales professionals need to tailor the conversation in such a way that bridges “features” of the product to a description of the “benefits” of what a reverse mortgage can provide a particular borrower, given his or her financial situation.
“Educators work on features,” said Paul Scheper, national retail sales field leader for Liberty Home Equity Solutions. “Sales professionals work on benefits. It’s all about the duct tape on the mouth and two ears; you have to listen. Always be caring and always be questioning, and help them [prospective borrowers] cross the bridge from a feature to a benefit.”
Written by Jason Oliva