Posted tagged ‘financial help’

Edu-selling . . Reverse Mortgages

May 20, 2009

j0438494Looking back over the past four years in selling this product, Reverse Mortgages, it has been an interesting ride. Fulfilling . .  absolutely . . . Easy . . . “NOT”. This is a product that over the years has received much criticism. There are several reasons for this:

1. The Name: I am sorry, but I wish they would have come up with a different name for this product.  Anything dealing with finance that has the name “reverse” in it subconciously for all of us, doesn’t seem right. Going backwards isn’t where most people want to go.

2. Home Equity as a Source of Cash Flow: One of the reasons many financial professionals have not come on to the reverse mortgage is due to the fact that they have always been trained to not use home equity as a source. A few years ago there was an idea out there that many took advantage of with their home equity . . .  cashing it out and using the funds for iinvestments. Ouch . . . though in the roaring ’90’s this made some sense for many, the current financial crisis has shown the reality of what happens when we do this. Foreclosures are at an all time high. Reverse Mortgages are different . . . very different.

3. Misunderstood: Certainly the name, as mentioned on #1 has made reverse mortgages misunderstood, but the original reverse mortgages (back in the 50’s & 60’s) did not have the protections in place as the Home Equity Conversion Mortgages (HECM’s). Areas of misunderstanding include ownership, default scenarios, depletion of equity, and others. Today’s product has many protections for the homeowner as well as their estate.

4. Audience/Market: Because this product is solely for seniors, it has been difficult getting in front of the masses of seniors. We all know that seniors are often taken advantage of and they know it. Anything that sounds too good to be true, well, is often too good to be true. As a group, it is difficult to develop the trust needed with this audience to truly educate and build the relationship. It simply takes time!

5. Lastly, but there is probably more to add, is the SALES PROCESS. The foundation of this product is that it is much different than many other products. I call it EDU-SELLING. That is, educating the client so that they can make the best decision for themselves in their current situation. The educational process is the sales process. Once the product is understood, then if it accomplishes the goals of the client, they make the decision. This is too important of a transaction for the typical sales process (I call it hard selling) to be used. Today, many brokers use this method since it is what they know.  I believe that when the hard sell is used, it is felt by the client, and they turn and run the other direction.

In the end, the client wants to know that the sales associate is one who can be trusted and who gives the clients room and time to process. Edu-selling provides the clients with information that they need to make the right decision for them. Sometimes it is quick, but often times it takes months for this process to occur. But in the end, these are clients that are happy with their decision.

Preparing for the Unexpected

December 20, 2007

j0403862.jpgI don’t know about you, but as I continue along this path called “life,” I am more and more aware that every day may bring the unexpected events that make me weary. No, I don’t stress about it, but I continually am reminded that it is a part of life. Whether it be health and finances, friend’s who go through challenging times, world events, the unexpected phone call from the school, or an unexpected letter that makes our heart pump a little faster, these events are a part of our normal lives.

In working with seniors and their families, one of the things that has been a norm in many of the conversations is this idea that the unexpected events have drained them of the many of their resources, or that future events would do the same. These are the uncontrollables! How does one prepare for the uncontrollable events? Well, for some events one can prepare with insurance. From life insurance, homeowners insurance, long term care insurance . . . . the list goes on with what types of insurance one can get to protect assets. Just recently, across the river in Oregon, many people found their houses in danger due to flooding. If one had flood insurance, this is a good thing. For those who didn’t have flood insurance, well, it is not so good of a thing.

Reverse mortgages are much like insurance, though, a little different. With insurance, one needs to have purchased the insurance prior to the event. Without it, there is no coverage. As they say, “hindsight is always 20/20.” However, with reverse mortgages, one can take out a reverse mortgage during or after the actual unexpected event occurs, in most cases. Reverse mortgages are simply “Plan B,” for most people. Plan B is better than no plan right!

I have mentioned in several of my blogs the importance of simply learning about reverse mortgages. As in most financial products, timing is everything. One may not be interested, or in need of having an extra stash of cash today. However, when there is an unexpected event, it just may be the answer for tomorrow.