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ISCOVER
The term ‘client for life’ is a phrase commonly heard in the mortgage broking industry, but it is also closely tied to the belief that the ‘lifetime’ of a client ends when their home loan does, says Bridgit’s Stephen Doyle. He unpacks some myths in downsizing.
Until now, many brokers have been led to believe that the best way to build their business is to continue growing their book. However, there is a huge opportunity for brokers to tap into their existing ageing client network and offer an ongoing value proposition by supporting their clients throughout their entire property journey and, in most cases, the next step is downsizing.
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For many empty-nesters, downsizing can be an exciting, albeit emotional time. Many people are leaving what was once thought of as their ‘forever home’, where they may have raised children and grandchildren, as they move into the next stage of their life. They’re looking for a property that reflects their new lifestyle; perhaps that’s by the beach, out of the city or closer to their loved ones. Wherever the move takes these home owners, brokers have a responsibility to support these clients in the next steps of their property journey.
Many brokers can support these clients. However, there are certain misconceptions that may stop the client from engaging their broker. The opportunity will come from busting these misconceptions.
The most common include:
Many Australians believe brokers can only help with upsizing and when a home loan is required
As the broker community knows, this is simply not true. The role of a broker is to help their clients find suitable homes considering their financial situation at any stage of the property journey. Their extensive knowledge of the market and location helps the average Aussie find their dream property. Investing in educating clients about the offerings available is essential if this myth is to be dispelled.
There are no costs when it comes to downsizing so no advice is required
Research shows that attempting to downsize without the support of an expert can be costly, especially if a mistake gets made in the process resulting in hidden or unexpected costs. A national research study* commissioned by Bridgit and surveying over 1,000 Australian home owners revealed that the average cost of relocating, should temporary living be required, is $8,300. A broker can guide the client through the options available to them, make them aware of these hidden costs and ultimately offer advice on how they can be more cost-efficient throughout the process. Ensuring clients are aware of all the considerations can help unlock the broker’s ongoing value proposition.
There are no finance solutions available for downsizers
Often traditional lenders require income verification prior to loan approval and they are looking for long-term borrowers. As many downsizers are retirees and do not have a source of income or need a long-term solution, they do not meet the criteria in place, despite being asset-rich. This has led to the misconception in the market that lenders and brokers cannot support with downsizing, however, the reality is far different. Non-bank lending options can be a great avenue for downsizers to explore. They have different lending criteria, assessing loans based on property equity and assets rather than income position, with shorter-term solutions tailored to downsizers. A broker who is well-versed in financing options can be essential to helping downsizers navigate their financial options.
Arguably, when it comes to downsizing, one of the best investments that can be made is to work with a broker. More clients need to know that there are options at this stage of the property journey and a broker is in the best position to advise them. By busting those myths upfront, you as a broker can ensure that your client relationships continue, even when the mortgage is paid off.
*Bridgit commissioned a national research study looking into the experience home owners have when buying their last home. The survey was in the field from 28 June to 11 July 2022 and spoke to Australian home owners who had purchased a property in the last 24 months. It achieved 1,011 completed surveys.
Stephen Doyle is the head of distribution at Bridgit – a tech-driven, non-bank lender revolutionising property lending, via bridging loans. He has developed a track record for accelerating company growth, following more than 25 years’ experience in financial services, of which 20 years were directly in aggregators.
In his role, Mr Doyle is responsible for building the business development team across Australia, strengthening the partner channel and engaging aggregators to showcase Bridgit’s innovative products.
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