Archive for March, 2009

Singin’ in the Rain

Article Six of the series is up.  This one is on – surprise! – mortgages and homebuying.  No, it really is.  And you didn’t think I could blog about what I do for a living, did you?  Don’t forget to register with the site, too.  The people that run it are earnest and they’re trying to build a readership.

Yes, I know that in order to build a readership you need something to read, but you can’t blame me for the dearth of content – my stuff is there.

Service? What stinkin’ service?

In sales, there’s the familiar phrase, “if you want to stay in business, you have to underpromise and overdeliver.”  Every time this is trotted out at a sales conference, all the bobbleheads nod as if this were profound and critically important.

I think it’s stupid.

There are lots of reasons for this, but I’ll start with just one, and that is that if you underpromise, you’ll never get a chance to overdeliver, because the other fellow – the one that is promising the moon – will get the business and you won’t.  I even remember hearing one very brave and almost certainly now unemployed speaker mention that very thing.

I echo, and amplify, this sentiment.

And I brought witnesses.

Three times just this year – and remember, it’s only March – I have had clients that I spent hours and hours educating about mortgages.  I do this a lot, and I do it very well, and I do it for free.  I have several avenues for this education, from this blog to RateWatch to private consultations.  I do a lot more than just quote somone a rate; I help them understand what loan is best for their situation, figure out how to budget appropriately so as to pay the loan off in the shortest possible time, even discuss (for those who are really interested) the inner workings of the mortgage market, where things are likely headed, and what economic indicators to watch to figure out when is the best time to move.  I even perform that market watching FOR them, so that they get the rate they want when it becomes available, even if they’re on a cruise (true story – it’s happened).

I’m not bragging when I say that this is a level of service that is unavailable to the general public.  The average loan officer cannot and will not do the things I do for my clients.

All three of these guys, after several hours apiece of this service, locked loans with other mortgage companies and ended up doing their deals somewhere else.


One of them was shopping the rate between me and another guy, and when I refused to cut my fees, he went with them.  He then referred his brother, who got RateWatch on the day he wanted to lock and assumed that meant he couldn’t get the rate he wanted, so he called up someone else out of the blue and locked with them.  He never called me.  The third fellow clocked my rates for three weeks, heard something on the radio, called them, locked, and called me later to tell me he was sorry, but.

In all three cases, the fact is that I could probably have matched the rate and fees of the competing company (had I known about them).  In one case, I wouldn’t do it.  In the other two, I might have, if I had been given a chance.  But in all three cases, I provided hundreds, even thousands of dollars of value and ended up with nothing.

There are two pieces to this puzzle.  One is the spiritual piece, and that part is in favor of doing what I did.  Cast your bread upon the waters, that sort of thing.  I believe this and I live accordingly, at least most of the time.  I do believe in a God that keeps score.  My life is an example of how a good heart and virtually no sense can work pretty well over the long term.

The second piece is the business piece, and that piece says I’m a fool.  If you provide people free help, they’ll screw you.  There are a thousand examples of this.  The most obvious one to me is the bookstore example, where people go into a bookstore, find a book they like, read a piece of it, then go to Amazon when they get home and get it for half price.  I used to do this, too, and I understand the behavior.

But I don’t do it anymore, at least, I don’t do it except to Borders and Barnes and Noble, or other big chains.  When I shop at my local bookstore, I always buy there when I find the book I want.  I know the $15 book there is available at Amazon for $7 (or even less, used).  I don’t care.  I want that little bookstore to be there when I want to go read a book sitting in a chair in the sun.  If I don’t patronize them, they’ll die.  I want the bookstore, so I give them my money.

The business piece of the puzzle says that this is lovely sentiment, but what I’m doing not only doesn’t maximize my financial power, it also encourages inefficiency in the market.  If I provide these free services myself, I’ll get taken advantage of and eventually I’ll get ripped off so hard I’ll go out of business.  This is a rather persuasive argument, right at the moment.

So I’m in a quandary.  Last Thursday, a client of mine that has been working with me on his loan for about two months, getting all this free consulting, and who is also a friend of fifteen years, called me and said he’d been hearing on the news that rates were really low, so he called his credit union and their rate was .25% below mine.  Did I want to match (“you know, I’d really rather do the business with you, but..”), or should we just call it a day?  Now, this guy LOCKED his rate with me about three weeks ago, which protected him through all the market turmoil from having his rate jump.  He got this protection, again, for free.  Now he wants a lower rate, and if he doesn’t get it, he’s gone.  I have certain contraints on what I can do once I lock a rate.  I have secondary lenders that will charge me if I break locks, or even cut off funding for my loans if I break enough of them.  I called them and renegotiated the lock (costing me $450), but could only get within .125% of the deal he was being offered.  On his loan, that’s a monthly difference of less than $15.

Will it be enough?  I don’t know.  He was going to take a weekend and think it over.  He absolutely has to do the right thing for his family.  No question about it.  His argument is that the lower rate will save him $4-5000 over the life of the loan.  This is true, if he holds the loan for 30 years.  My counter-argument is that this is not the same thing, as COSTING him $5000 to do the loan with me.  Not only is he not going to hold the loan for 30 years, he is also going to get a substantially better package of services, more information, etc., and down the road there absolutely will be an opportunity he will be able to take advantage of if I am advising him.  I concede his argument, and he concedes mine.

So here’s my question: suppose he decides he’s going to do the loan with the credit union.  What do I do?  Do I provide my services anyway, on the spiritual principle that doing good is its own reward?  Or do I cut him off and refuse to be blatantly taken advantage of?

I really don’t know what to do.  I want to make a living.  I also have to not only be true to myself, but recognize that the more service I provide, the better chance there is of earning the business (and referrals) in the future.  So even if I know a guy just ripped me off, isn’t it good business to continue to provide my best service?

Maybe it won’t come to that.  But I’m still going to want to know the answers to my questions.

Things I learned this week

On Thursday, it was snowing here rather hard.  It was a wintery kind of day, heavy on bluster and wind, the kind of day that shows you where your house isn’t as well sealed as it could be.  I usually blog sitting here at the kitchen table, and that’s where I was for the bulk of the morning.  Xander and Nicholas are off for spring break (great week for it, with temperatures in the 40s), and they built us a fire, always welcome on days like that.  Because our wood is wet (we stack it outside our back door, and it gets dripped on), we often bring it in and stack it to dry by the wood stove where the fire is.  Sometimes, because we are not too bright, we stack it ON the wood stove.  And that’s what the boys did.

In about fifteen minutes, there began to be smoke from the wood, which had dried and begun to crisp.  I was in the grip of the muse, and though I smelled it, I didn’t look up to see what was going on (the wood smells as it dries, and I thought that’s what it was).  Fortunately, Jeanette was home and came downstairs at the correct moment to ask what the ()%*#(&^ was going on.  She got the wood off the stove, where some of it had turned black and one small part of one board had begun to glow.  Seriously, ten seconds later we could easily have had combustion.

I learned several things from this.  First, we don’t have a fire extinguisher handy, a thing that will be remedied today.  We have one in each of the cars, but none here in the house where the fires are.

Second, that we need to have a discussion with the children about fire safety.

Third, that there is almost nothing in this house that I would be very sad about losing.

That last one really got me.

I thought about what would have happened if the boards had gone up in flames.  There’s a lot of combustible stuff right there, and no way could we have stopped it from conflagrating the entire house.  We would have had one, maybe two minutes to get people and things out before the place was an inferno.  So what would I have done?

Well, first, the people.  That one’s not that hard.  We do usually know where most of the people are, and we have fairly regular discussions about how to get out of the house and what to take with you.  We have ladders upstairs for escape that way if the stairs are blocked.  The kids all know that you take heavy clothes and good shoes, though we know they’ll never be able to find them.  I felt pretty good about that part.

But then, what would I take?

I would take my laptop.  This thing is half my life, it seems like.  It has hundreds of thousands of dollars’ worth of data on it in client files, plus a large amount of old writing that I’ve done, things like novels and short stories and all kinds of things that would pain me to lose.  Simultaneously, I would grab the external hard drive currently attached to the DIMEPOD in the computer room.  That perhaps ought to be first – it has on it photos and other family memorabilia from the last twenty years.  To lose that would be criminal.  So that has to come.



See, that’s where the problem started (and the realization, too).  Oh, there are things in this house.  Twenty years’ worth of married junk, times however many children we have, times their lifespan.  Pictures on the walls – but all of those are scanned onto the Family Drive – books – but almost all of those are easily replaced – and old journals and things – which we probably should GET scanned onto the Family Drive, but which we don’t read now so what good are they doing us?  There is some original artwork, some of which is precious and dear to me, and there is my chess set collection, which is down in the crawlspace and might survive, and a quilt my sister made for us that I love.  None of the furniture matters.  Clothes?  Please.  As I was thinking about it, it occurred to me that one of the most important things in the house was my tomato seedlings, and those can always be got at the local nursery if necessary.

And there really was not. anything. else.

So what the bleep is all this stuff doing in my house if I don’t care about it enough to save it from a fire?  And I mean, I wouldn’t go back and get any of it even if I had time.  The kids would probably save the Wii, unless I could stop them.  But what IS all this stuff?  How did it get here?  Why do I keep it?

Today is Saturday.  I am planning to walk through my house with a big box.  It could be a very interesting day.

P.S. There’s something else.  Part of me actually wanted the house to burn down.  It’s old-ish, and it has “quirks”, and no longer fits the way my family lives very well.  We’re very well insured, for not very much money, thanks to Agent Heaton, my good friend from Main Street, so we’d get our house back, brand new, and better-configured, with a bigger fridge or two and a five-burner stove and a triple sink (do you know how many dishes ten people generate in the course of a day?), and a smallish room at the back of the garage with a deep sink and access to the back yard and skylights so my seedlings will grow.  And a real tub in the master bedroom.  And a tub in the kids’ bathroom.  And and and.

But nah.

New Article Up

Some of you know that once upon a time, the Lehi Free Press, an arm of the Provo Daily Herald, asked me to write a column about finance for their paper.  I wrote and published four of them, so I guess I can legitimately be called a columnist.  Cool.

In reality, I wrote SIX of them, but only four were ever printed.  Apparently a local man complained about my doing this, saying that I was essentially getting free advertising, and since he wasn’t, he wanted my column dropped.  So after a month or so of complaints, the Free Press dropped my column.  This man was offered an opportunity to write his own column, but he declined.  I’ve read some of his writing, and I don’t blame him.

Four weeks after dropping my column, the paper folded.

Now, far be it from me to assert any cause and effect here, but one of the problems local papers have is that they have delusions of grandeur.  The fact is that national newspapers are in deep, deep trouble.  It’s just waaaaay easier to get your news from Yahoo and CNBC than from the New York Times.  It’s pointless and stupid for the Provo Herald’s lead story to be “Obama Calls for More Fiscal Irresponsibility”.  Even assuming that you didn’t know he was going to do that, in which case it’s hardly “news”, you will have heard this on the radio and read it online LONG before the Herald could get it to your doorstep.

Local papers are in trouble, too, but they don’t have to be.  There is a legitimate need for local newsgathering, the kind of stuff that is not going to make Yahoo!, in fact, it isn’t going to make any online source at all.  One of the best ways for local papers to remain relevant is to publish content that can’t be had anywhere else; interviews with local people, obscure local events and happenings, and (especially) locally-written articles that the authors agree not to put up on line.  Like, oh, I don’t know, MINE.  I know that the ad model for newspapers is broken, and that it’s tough to re-think and re-tool enough to fix it.  But folks, the deal is that unless you offer something that isn’t already out there, you’re going to get clobbered.  And fold.  If you DO offer something that isn’t already out there, people will pay for it if the quality is high enough.  You can make your own meals, too, but people still pay to go out to eat.  You can kowtow to the local loudmouth that thinks he’s being gypped and stiff your readers, or you can try to put your best out there and let the whiners whine.  Your choice.

So a couple of weeks ago the Herald staff came and asked me to start posting my column to their online site.  It’s fledgling, and it’s got some problems, but they’re trying.  They’re passionate about it, and that might make enough of a difference for them to get off the ground.  So go read my columns there.  For now, I don’t post them to my own blog, so the only place you can get them is at the Lehi site.

Apparently, I’m a Genius

So yesterday I write a post about what’s going on in the economy, and why we’re in for more trouble, and how we get out of it, and today one of the web’s best blogs posts a shockingly similar set of ideas about how the economy is doing and what’s coming.  All right, so he posted it on February 17.  I didn’t see it until today off a referral from the BrandBuilder Blog.

Read that post.  Then scroll down and read the one below, which is a fantastic description of why I you we have too much stuff and I you we should really get rid of a lot of it.