Ethical or Not - Need Advice

[Curt Davis]

I help investors purchase investment homes in my city. I have many clients who buy from me and I do a great deal to make sure they are happy. Lunches, dinners, gifts when they purchase, time invested driving around showing them homes, etc. For the most part they are well taken care of by me. Now for the hard hitting issue.... There are many wholesale investors where I live, many small time one man shows and some larger companies like who I work with. I have a client who has purchased 10 homes cash from me in the last 3 months. This is public record and shows up in the newspaper about a week after the close. My client told me the other day that he has received phone calls from some other wholesale investors ( who I know ). I cant help but to be pissed about this. To me its one of those unwritten rules that you should find your own clients. I look in the same paper also and see my competition make sales and the names of their buyers, I could easily contact their buyers but I do not b/c I do not want to earn a reputation for stealing client. Now, if someone contacts me either through my website or other means, then I will work and sell them a home.

I would like to hear what others think about this? Do I call this other guy and tell them to back off? Do I just sit and do nothing and let my client buy from them? My aggressive side wants to give a beat down but my professional side says do nothing. ??

[Jon Holdman]

These other sellers are your competitors. They're entitled to use whatever means they want to try to find customers. The idea of looking through public records to find frequent and cash buyers is often offered up in "build your buyer's list" discussions.

In my day job, going after our competitors customer is a big part of the goal. Everyone wants a bigger market share.

I'd also point out than any agreement to "stay away from each others customers" is in fact illegal. Dividing the market is a monopolistic practice and is specifically prohibited by anti-trust laws. Calling this other guy and telling him to stay away from your customers is, at best, borderline. If he say "OK, but you stay away from mine" and you say "OK, sounds good" then the two of you have just broken the law.