As I’ve said before, I’m a fan of excellent customer service.  Give this article a read… 

By Steven Pearlstein
Business Columnist, Washington Post

Here’s one of the great paradoxes confronting American business today: Why is it that consumers seem willing to spend huge gobs of money to buy status but are incredibly tight-fisted when it comes to paying for service?

Consider, if you will, the designer handbag, which has now achieved the standing — and in some instances, the price — of the mink coat or diamond earrings in the female imagination. No longer are many women content to own a few nice leather and straw bags in the standard sizes and colors. They’ve even gone beyond an unnatural yearning for this year’s “It” bag as memorialized on “Sex and the City.” Being seen with a Mark Jacobs Stam or a Chloe Paddington has become an obsession that now drives the growth of the luxury-goods industry.

To see the power of the purse for myself, I took a stroll this week through the Collection at Chevy Chase, a new retail complex located strategically between Neiman Marcus and Saks Fifth Avenue on Wisconsin Avenue. With stores like Christian Dior, Louis Vuitton, Max Mara, Bulgari and Jimmy Choo, this is what passes for Washington’s version of Rodeo Drive. And to oversimplify things only slightly, it’s all about handbags. Handbags adorn the window displays. And handbags are the first thing you see when you walk in the store, each one displayed on its own glass shelf, like a piece of fine art. There are even uniformed guards watching over them, as in a museum.

Considering some of the prices, it’s no wonder. Other than the small evening bags, it’s hard to find one of these bags for less than $700, with the average price closer to $1,500. And if you’re interested in bags made from ostrich or crocodile, or the ones with sterling silver buckles, you’re looking at $5,000, $10,000 or even $15,000. According to Women’s Wear Daily, Hermes is charging $148,000 for a crocodile version of its Birkin bag, but don’t bother trying to get one — there’s a waiting list.

Obviously, this is a rarified slice of the market, but there’s a broader phenomenon at work here. Women who used to pay $100 for a bag are now paying $300, and those who once paid $300 are now springing for $600. And according to WWD, industry executives don’t think they’re anywhere near the point of price resistance.

Take the example of Coach, the leading purveyor of designer handbags, which has enjoyed 30 percent growth, and a 25-fold increase in its share price, since it was spun off from Sara Lee in 2000. Long a staple in better department stores, Coach really took off when it began selling its $200 and $300 satchels at its own sleekly designed stores. Now, Coach is moving up-market with its new Legacy line, with bags approaching $1,000.

So what is it about handbags?

It turns out that customers love them because they are the quickest and easiest way to update a wardrobe and send a signal to the world (other women, that is) about your style and success. You can carry a new bag many times more than you can wear a new suit. And while not every woman can look good in a pair of designer jeans or a low-cut cocktail dress, anyone can look good with a new purse.

Businesses love handbags because the profit margins are almost too good to be true. As one top industry executive told me this week, there is simply no way to justify the run-up in wholesale prices in terms of higher costs for materials or workmanship or even marketing — it’s all about brand premium. And retailers love them because, in contrast to clothing or even shoes, there are no problems with fit and sizing, there are no alterations, and they don’t take up lots of space.

Women, of course, are not alone in paying ridiculous sums to purchase status goods. Men have their cars and watches, their fishing gear and their flat-panel TVs. And is there any doubt that one reason top schools and colleges have been able to raise tuition with impunity is the perceived status they confer on students and their parents?

But what is so hard to understand is why consumers who are willing to pay ridiculous sums for status goods are such ruthless and unforgiving penny-pinchers when it comes to paying for service.

For years, airline executives have said that they simply can’t compete if they charge $25 more than their competitors for a roundtrip ticket to Chicago, even if they use the money to provide more legroom, or eliminate those awful lines at check-in, or provide you with a glass of wine and a simple cheese-and-fruit plate on a five-hour flight to San Francisco.

And how many times have we heard retail executives complain that they can no longer afford to have a satisfactory number of experienced, well-trained salespeople on the floor because the added cost would make them uncompetitive?

You get the same story from insurance companies and software makers in explaining why you have to wait endlessly on hold to talk to someone who can explain why your claim was rejected or how to unstick your computer: Our customers won’t pay for that.

In the lingo of business strategy, these industries have become commoditized, no different than the businesses of selling gasoline or corn oil. And the common view among executives in these industries is that no matter how much or how little service you wrap around these commodity products, customers will invariably base their decisions on price.

Except, of course, when they don’t.

I wonder what the beleaguered chief executive of JetBlue would say this week if you asked whether his passengers would have been willing to pay a bit more to make sure their favorite airline had the people and systems in place to respond to inevitable weather emergencies.

Would the owners of Woodies or Marshall Fields or Jordan Marsh still have department stores to run if they had tried to match Nordstrom’s service rather than Wal-Mart’s prices?

And who do you think will win the “broadband war” between the cable companies and the phone companies — the ones with the lowest price or the ones with the best service?

Not every business can be lucky enough to be selling thousand-dollar handbags to rich women who have gone handbag crazy. But every business can learn an important lesson from Hermes, Dior and Jimmy Choo — namely, that you’d be surprised how much people are willing to pay for something they really value.

By Steven Pearlstein
Business Columnist, Washington Post
Wednesday, February 21, 2007

http://www.washingtonpost.com/wp-dyn/content/article/2007/02/20/AR2007022001660.html

The Maryland Housing Market-What’s it really doing??

Interest rates began to rise, the housing market slowed.  Let me show you how the market has changed in the past 14 months…

We hear all kinds of stories from the media, usually negative, on what the housing market is doing here in Maryland.  The question is, how much are you to believe??  It is true, home prices have dropped.  Over the summer, average sales price for homes across the country were said to have dropped an average of 10%.  For the past 2 months, interest rates have also dropped.  What does the overall picture look like?  I’d like to show some local statistics, followed by an evaluation of those numbers and what the market is doing.

In running local statistics, I got to thinking…interest rates have started to decline consistently over the past 2 months, homes are still sitting on the market, people aren’t buying homes anymore…But as a real estate agent in the local area I have noticed an interesting phenomenon.  Home sales in areas with an average sales price over $500,000 have actually increased, while home sales in areas with an average sale price under $500,000 have decreased dramatically.

The two charts below illustrate my observation:

Over $500,000

* Bethesda (Avg-$927,000):  Number of home sales are down by 6%, Average sales price has increased by 13%

* Potomac (Avg-$1,105,000):  Number of home sales are down by 9%, Average sales price has decreased by 3%

* North Potomac (Avg-$612,000):  Number of home sales have increased by 27%, sales price is down by 10%

* Darnestown (Avg-$899,000):  Number of sales have increased by 20%, sales price is down by 2%

* Rockville (Avg-$525,000):  Number of sales and average sales price have remained the same.

Average sales have increased for these areas by 6.4%!  Average sale price has decreased by .4%!

Under $500,000

* Gaithersburg (Avg-$435,000):  Number of sales is down by 25%, sales price has increased by 2%

* Germantown (Avg-$360,000):  Number of sales is down by 33%, sales price has decreased by 2%

* Damascus (Avg-$410,000):  Number of sales is down by 53%, sales price has decreased by 11%

Average sales have decreased for these areas by 37%, and the average sales price has decreased by 3.7%.

What do these numbers mean? Home sales in areas with an average sale price over $500,000 have increased, while home sales in areas with an average sale price under $500,000 have decreased dramatically.  What do people in the market for homes that command a higher price KNOW that the others do not?? 

The answer:  Lower interest rates and a slower housing market means IT IS TIME TO NEGOTIATE!  

You, the buyer, can now get a loan for more money and still have the same or lower monthly mortgage payment.  You are now in a window of opportunity where a buyer can actually get more home for the money.  Numbers show people are spending the same, and getting more.  The ability to negotiate puts buyers in a very pretty window, indeed.

If you’d like a breakdown of your specific neighborhood, feel free to send me an email at eul@homesbyeul.com or give me a call at 240-498-1220.  I’m here to to help.

Information pulled from the MLS and is believed to be accurate but not guaranteed. 

Buyer reluctance has been a common theme among clients this year.  It seems the media’s real estate sensationalism is keeping buyers on the sidelines waiting…waiting for prices to fall, interest rates to drop, waiting…to make sure they don’t lose money on one of their most important, pricey investments.  I’d like to share my opinion on market strategy. 

“Time in the market is better than timing the market.” - Anonymous.  In a nutshell, buy and hold!  As long as you hold, it doesn’t really matter when you buy - And here’s what I mean by that…

One thing to ask yourself when purchasing a home is, “Am I shopping for an investment? Or, am I shopping for a home?”  If you’re shopping exclusively for an investment, particularly short term, particularly in the current market, I advise is to BUY LOW, buy in locations convenient to commuting and with as few homes in the neighborhood on the market as possible. 

If, however, you’re shopping for a home I think everyone can take comfort in the security of owning Maryland real estate-minutes from the country’s capital.  Real estate goes in cycles and if history is any indication the next 1-2.5 years will likely be flat, if not regress a bit more.  Conversely, I would bet that any piece of DC Metropolitan real estate will be worth significantly more than it is now in the next 3-5 years.  What I’m trying to say is, if you’re in the market for a home - now is the time!  We haven’t seen a market like this in over a decade.  Who cares what the market will do six months from now, you’ll probably still be in your house five to seven years from now (according to national statistics) and you’ll have experienced healthy appreciation.  If you think you can save 10% by waiting six months to a year, why not go out and start making offers 10% below asking price now???  I think you’ll be surprised with the results.

Sellers! Heed special attention- If you can afford to wait 3 to 5 years for your next move, then I think you should do so.  If, however, you know you’ll be moving between now and the next 1-2.5 years… time is of the essence and you should consider moving right now.  As always, I’m here to preserve as much of your equity as I can, and we shouldn’t hesitate.

It’s no secret we’re in a changing market, but there’s opportunity for buyers and sellers alike in any market - and this market is no different.  Let me know if I can be of assistance… I’m always pleased to do so.

eul@homesbyeul.com
 

IF YOU ARE THE BUYER of the house about to go to settlement:

- Call the settlement company to identify yourself to the contact person and to give him/her your contact information (work and home tel. numbers, cell phone numbers, e mail addresses).
- Switch all applicable utility accounts to your name, effective the date of settlement.

-Call your insurance agent and buy home insurance (also known as “hazard insurance”) effective the date of settlement (NOTE: this is replacement insurance for the structural components of the house that you are buying. It does NOT cover the future contents of the house - that requires a separate insurance rider).

PREPARATION

- The home should be vacant with all necessary repairs made and ready for a pre-settlement walk through inspection to occur NOT prior to 3 days before settlment.

- You and any other buyers of the house are required to bring a photo ID with you to settlement (valid drivers license, passport etc).

- If you or any other buyer of the property will not be able to attend closing, please call the attorneys office and ask them to make arrangements for a “Power of Attorney”, whereby which someone else can sign for the person who won’t be able to attend.

- Approx. 3-4 hours before settlement (NOT EARLIER), call the settlement lawyers office and request them to give you a final tally of funds that you’ll need to bring to settlement. Round up to the nearest $100 and bring that amount as a CERTIFIED CHECK made payable to the settlement attorney’s office. Ask the attorneys office whom the check is to be made payable to. Don’t forget to bring your checkbook with you to settlement. If your certified funds are more than adequate, you will receive a refund at closing. If your certified funds are short by a small amount, you can write a personal check to make up the difference.

IF YOU LIKE TO READ EVERYTHING WORD FOR WORD, LET THE SETTLEMENT OFFICE KNOW. THEY’LL NEED TO SCHEDULE EXTRA TIME FOR YOU - OR - REQUEST YOU TO COME IN EARLY TO REVIEW THE PAPERS.

IF YOU ARE THE SELLER of the house about to go to settlement:

-Call the settlement company and give them your mortgage payoff information (ie. loan account number, toll free numbers to the mortgage company, names on the account, your social security number etc. They will then call your lending institution and request an exact payoff for the date of your closing.

-Cancel all applicable utility accounts effective the date of settlement.

* If the house that you are selling is in the county, billing for water and sewer automatically changes names when the county receives the deed from the settlement attorney’s office.

* Call your insurance agent and cancel your home insurance effective the date of settlement, NOT earlier.

PREPARATION

- Note down your water meter(s) reading(s) prior to coming to settlement. The settlement attorney requires this information in order to transfer the water bill from your name to that of the buyer. Unlike other utilities, the water bill is a LIEN AGAINST THE HOUSE and if not properly paid, can jeopardize the successful transfer of ownership.

- Ensure that all repairs that you had agreed to with the buyer are completed and that you have receipts to prove that. Bring these to settlement.  In the event that you did some of the work on your own, keep in mind that the work is required to be done in a “workman like manner”.

- Please bring all warranty papers, manuals on appliances/security systems, mail box keys, garage door openers etc. to settlement in order to give these to the buyers.

- If your house is in Frederick County, has a septic tank and well water, you are required to provide and pay for a “Well and Septic Certification”. This can be done by hiring a company such as:
* Alban Well & Septic Inspection. Tel: 1-800-822-7200
* Catoctin Labs. Tel: 301-663-5323
* Frederick Town Labs. Tel: 301-694-7133 or
* Jet Septic: 1-800-735-4726 (Toll Free)
– If the buyer of your house is using FHA or VA financing to buy your house, make sure to tell the appropriate Lab/Service of that since the type of testing required for FHA or VA loans is different than for Conventional Loans. Also, please tell them to fax a copy of the well & septic certification to me at 301-921-4910.

- You and any other owners of the house being sold are required to bring a photo ID with you to settlement (valid drivers license, passport etc).

- Not all settlement attorneys disburse settlement funds at the closing table. Please call the attorney to clear this matter ahead of time and/or to make arrangements to wire the money into your account.

- If you or any other owner of the property will not be able to attend closing, please call the attorneys office and ask them to make arrangements for a “Power of Attorney”, whereby which someone else can sign for the person who won’t be able to attend.

My marketing folks and I just had a 1 mile sprint.  I must say, they are sooo much fun to work with.  Their laughs, even while under pressure, are absolute Gold!!

 I’ll run with them anyday!

I saw a film, tonight, called “Premium,” written and co-produced by Pete Chatmon of Double 7 Films.  It stars Dorian Massick and Zoe Saldana.  Two hours later, it is still on my mind and pushing me to write about it.  I want this movie to be seen by as many as possible.

Think of the movie “Crash,” with it’s honesty, rarely talked about issues inside private minds-and then add grace. 

Think of your dreams.  What are your true dreams-biggest dreams.  How hard and long are you willing to work to achieve them?  Who-and what-are you willing to risk giving up while you pursue those dreams?  Do you give up or down-size the dream because everyone else you love gives up on your dream?  It’s true, it takes quite a while for the really big dreams to come to fruition.  As much as people love you, sometimes they just don’t have the patience.

As a dreamer, myself, the movie clarifies.  With my belief in my uniqueness, my acceptance of my abnormalities, seeing this movie reaffirms that it is my uniqueness and abnormalities that actually prove my normality. 

In fact, pursuit of the reality of dreams result in the creation of life and the world as we know it, today.  What do we give up to get there?

If you’re so lucky to have this movie come to your area-drop what you have scheduled on your calendar and see ”Premium.” 

I insist.  =) 

Cheers.

http://www.double7film.com/  or http://www.blackfilm.com/ecards/bmw/premium/tickets/allcity/bmwfs_prem4.htm

I have had a couple people ask me my opinion about a company called Redfin.  Below is a response to the link in question: 

Last Stand of the Six Percenters.

I call Redfin another choice of service, as opposed to the replacement of service. Just like in a restaurant, some people like to eat-in and be served, some people like to go through a drive thru and go home. Either way, they eat! There is a realtor for everyone-those who like to be wined-and-dined will use a full service realtor, and those who like to carry-out will use a discount brokerage or Redfin. Redfin is no more competition for me than another agent in my office. I fit the specific needs of my clients-not someone else’s. If I met another agent’s client’s needs, then they’d be my clients!

There is a down side I see from a realtor’s perspective (I haven’t done a deal with Redfin, they’re not in Maryland) is the amount of work it takes. When I do a transaction with a “For Sale By Owner” (FSBO) for example, I often end up doing almost twice the work. Buying or selling a home isn’t just numbers, it’s an acheivement. A lot of it has to do with the psychological aspects of an acheivement. As with a FSBO, who has no agent, a realtor ends up taking care of many of the needs of the seller in order to achieve the goal of the buyer-which is to buy the house. i.e. A seller is inevitably going to get emotional-this is a huge investment, maybe they’ve raised their kids there, maybe they were raised in this home, etc. So, in addition to taking care of the buyer’s emotional and educational needs, we’re also taking care of the emotional waters -and more “often-than-not” the educational needs-of the seller-which we wouldn’t have to do if the seller had an agent.

This scenario is not only present with FSBO’s, it’s also present with agents who don’t provide point-point service, and some part time agents who have 2nd jobs and therefore don’t respond as efficiently as is needed for such a huge endeavor. The active agent-whether on the buyer or seller side-in order to serve the needs of their client, which is to get the deal done, must pick up the slack of the non-performing agent. In fact, a number of my ‘repeat clients’ were in fact due to a previous deal where they had another agent, but I did the bulk of the work. Those buyers/sellers did not return to the other agent, they returned to me-the agent who performed work.

The repeat business stemming from the last scenario, however, wouldn’t apply in a situation with Redfin. If a buyer is getting money back from Redfin, then why should they care if someone else is working twice as hard-even if it is indirectly serving their needs-to get the job done? With that being said, and the obvious extra work to be done by the active agent (if we even have to start the deal doing extra work by showing the house, I can only imagine what else we’d have to do, extra!) maybe one way Redfin can reduce the prejudice toward them by active agents would be to offer additional monies to the other agent in acknowledgement of the extra work.

Would you want to work for free? If we’re getting the same paycheck, but doing more work, then we’re in fact taking a reduction in pay. Time is money.

I love music.  All different kinds.  The sound this guy entices from a Ukelele! just pleases my mental pallette. 

http://www.youtube.com/watch?v=L8oxlPoZNbU&mode=related&search=

Here are a few ‘Rules of Thumb’ before putting your home on the market…The more you impress people with the condition of your home, even if it’s just cosmetic, the faster the home will sell.  Enjoy.

1. Less is usually better than more, less pictures, less furniture, less on the walls, less on the counters and less on the floor.

2. Lighter is better than darker. Put bulbs in every fixture, the highest wattage recommended in darker rooms. Turn on all lights and open all curtains.

3. Freshen up paint. Shampoo rugs. Expose hardwood. Wash windows. Make bathroom fixtures and kitchen surfaces shine.

4. Place a few planters with fresh flowers near the entrance, mow the lawn, trim the edges, and in winter (in the north) keep it shoveled, salted, and/or sanded.

5. On the outside paint the most street visible areas. Stand in the street and look at the paint or siding, shudders, curtains, plants, grass, drive way, roof, chimney, etc.

6. Trust your instincts: If you think something should be done, generally you’re right, do it!