BiggerPockets

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. ??

I agree with Rich. Every buyer is looking for the best deal and unless you have something written and signed he is a FREE AGENT to any and everyone. Now, saying that means that you can also, do the same thing and do not look at it has stealing, just look at it as being business and I will see if I have something to offer this indvidual. I have never heard of listing the person who purchased a SFH in the paper, but every city has a different view and law. Just remember I think we put to much credence in loyal and morality. This guy is obviously and BUYER so you should know what he is looking for so go and find him plenty more of what he is looking for. You should create a pretty big buyers list from who is buying in that area if they list everyone who purchases a home.

SUCCESS BREEDS SUCCESS

I completely agree with all the previous statements. You are right, I am thankful I have sold him as many homes as I have to this buyer. Loyalty I guess is something you cant teach people. I send all my clients who buy from me at least a thank you card, if someone buys 10 homes, that is a lot of money in my pocket so a small gift is just another sign of appreciation.

I also think that though property purchases though public record should not be posted in the newspaper. I am good at what I do but taking clients to lunch or when clients fly in from out of town looking to make purchases I at least take them out one evening. Trying to relate and be more personable with them can make them feel more comfortable.

Thanks guys for all your insight. Business is business.

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.

Hi Curt, Rich makes some great points here. There is a great misconception out there about Realtor's thinking that any buyer/investor belongs to them. In my area, you would be hard pressed to knock on two doors and not meet someone who does not know a Realtor, either a family member, a church or other club member or who has some relationship of some kind.

Every buyer is fair game, it's up to you to earn the loyality and keep your investor clients. Look at it from the investor's point of view, if you don't bring me a good deal do you expect me to pass on the deal? Is that agent not entitled to do the deal if they brought it to me? OTH, look at it from the other agent's point of view, there are only so many investors in any area. At some point that investor probably bought a property from a Realtor, if that buyer "belongs" to that Realtor forever, there will only be room for so many Realtors in that area!
It's a good thing your professional side kicked in and kept you from putting yourself in a bad light amoung other professionals and possibly your buyer. Taking someone to lunch and giving them small gifts, in my mind is a poor way to attempt to buy loyality, but it is nice. That might work with a homebuyer, but an investor is in business and buying lunch is probably expected from doing past deals, not locking them into your clutches for future deals. Keeping in touch with your best clients is the best way to keep them, pass on new information that helps them in what they do, give them new listings that might be of interest, pass along information you find on this site that may be new to them. Impress them with your knowledge and your loyality to them as their agent, they will stay with you. Good luck, Bill

Curt,

I think we are being a little hard on you for the "courting" of your investors. I did a little research on Memphis one time (I thought 18 homes for $18,000 each sounded great until I realized they were worth $5,000) and realized that the treatment of your clients is standard practice in that so many are bringing investors in from out of town - like California etc. In fact one guy I was referred to invited me to stay at his house. I can also see why you felt more attached to your buyers than some others - because your buyers are ones that you start from A-Z, from knowing nothing all the way through their first deal and on to their 10th deal. I have met several people who with $500 and good credit have been hand held by one of your Memphis competitors , actually it may be you for all I know, into buying 5+ homes and all are rented and cash flowing. They are very happy.

Anyhow just thought I would chime in as a 3rd party to show that this sort of treatment is very commonly practiced in the Memphis market and by many of the players of all sizes.

Curt,

I am struck by your post because if you truly deliver an experience that cannot be duplicated no client would want to venture elsewhere.

You are actually the only element of the business that cannot be replicated.

This is a two way relationship; your clients can also scout others. From what you described, they would quickly regret that decision.

He's probably loyal to you: why did he tell you about the other wholesaler? Most likely, he'll stick with you with every property you bring. Of course, he'll still buy from someone else on other deals. He isn't exclusive to you just as you are not exclusive to him. We've tried this exclusive type arrangements and it doesn't work well.

Plus, you can remind him that many wholesalers SUCK! Over priced, under estimated repairs, and generally not good deals. Remind him that you also provide a good service to him and get things done.

If for some reason, he is pushing you too hard (you can give in a little) I'd remind him, again, that you've been tossing him the deals first and that you have other investors getting mad at you for not showing them the deal first.

Lastly: NEVER KILL YOUR GOLDEN GOOSE or CASH COW!

Ron

OTOH Curt, are you sure you're in the right brokerage in your community? You gotta look out for number one big guy! Bill