Some not-so-good fruit and a $10 haircut.

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In my last post I talked a little bit about how shopping for a mortgage should not be approached the same as shopping for a new TV, or gasoline, or Pop-Tarts.  Most people see this analogy pretty clearly . . . televisions, gasoline and food are commodities.  And for the dictionarily-challenged, Webster’s defines a commodity as “an article of trade or commerce, esp. a product as distinguished from a service. ”

The waters get a bit muddied and the analogy decomposes slightly (like bad fruit) when we compare purchasing a ‘good’ with purchasing a home and ‘purchasing’ or securing a mortgage.  Although, as I mentioned in my last post, it is worth saying again, if you are willing to put up with a little ‘pain and suffering’ to save $100 in closing costs, in exchange for mediocre service, quasi-professional advice and a I-hope-everything-will-close-fine mortgage experience, then you are a brave soul . . . and you can take your $100 knowing it was well earned.  On the other hand, there is something to be said for getting what you pay for — not only the end result, but the process and experience as well.  And in a  service/consulting industry like the mortgage business, sometimes it’s hard to put a dollar amount on that idea until the end of the process (or until you decide to go for the $10 haircut).

But, before we talk about $10 haircuts, let me mention a most-bizarre sign that I read while pumping gas at the Kroger gas-station (which by the way, gives QT a run for their money on price per gallon).  The sign had a photo of a professional looking family-man in his Kroger shirt and tie and blue apron.  I think the sign had his name on it and his title, “Produce Manager.”  And in nice italicized script the sign read, “Kroger produce, the perfect balance of quality and price.”

What!?!!  What does that mean??!!  (my translation)  “Ah . . . Kroger produce, it’s not great, but it’s cheap!” or “Kroger produce, dumpster-quality produce at bottom-barrel prices” or “Our produce is not as good as Publix’s produce, but you’ll save $8 every time you shop!”  Who comes up with these things . . . better yet, who gets paid to come up with these things?  So here’s my idea of the help-wanted ad from Kroger’s Human Resource Department:  national grocer looking for someone middle-of-the-road motivated, with some marketing knowledge and little to very-little experience.  Willing to pay middle to low dollar for compensation in proportion to your lack of experience.  All marginally-interested, mildly-qualified applicants should inquire.

I guess you really do get what you pay for.

So, a client of mine who purchased a house a few miles away from mine, who is now a friend of mine, called me for some local advice. 

Friend:  “Hey, Jeffrey, where can I get a good $10 haircut?” 

My response — “If you are looking for a cheap haircut, then I’m not your man.  Now, if you are looking for a great haircut, I can tell you the best place to go.  But a good – $10 haircut?  I don’t know if there is such a thing.”

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So, what does all this have to do with shopping for a mortgage?  Well, mainly this, remember, saving $8 to risk some questionable-fruit, best-case will save you  a few bucks and worst-case will have you gagging at the kitchen sink.  Saving $20 (or more) on a $10 kids-cut, best-case will save you some cash and earn you a dum-dum lollipop and worst-case will have you sitting in your car, yelling at the rear-view mirror, “I said a LITTLE off the top!  What was she doing with the clippers the whole time!  I look like an IDIOT!” (actual phrases used from personal experience).  And  . . . trying to salvage a few dollars in closing costs or save an 0.125% in the rate could have you pulling your hair out a few weeks later wishing you would gone with the best, not the cheapest.

Note to Kroger:  “Kroger produce . . . great produce at great prices.”  Call me and I’ll send you my resume’. 

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3 Responses to “Some not-so-good fruit and a $10 haircut.”

  1. Mr. $10 Haircut Says:

    Yes, I was willing to pay for the security of using someone I could trust on my family’s biggest investment…and for a friend’s built-ins. I wonder though, if $50 for a haircut is good stewardship. That’s $40 more you could have put into your retirement fund.

  2. hillsidelending Says:

    Dear Mr. $10 haircut,

    I agree, a $50 haircut might be a tough bill to swallow; but, hey, if it’s all about maxing out your retirement fund, maybe you could just give me $5 and I’ll get to work with my Wal-Mart clippers? 2 on the sides and 3 on the top, sir?

  3. Mr. $10 Haircut Says:

    That’s a great idea!! Even better, you could just finance the $50 haircuts to only cost me $5/month!!

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