The goal of business is to squash competition through superior products and services, not through the threat of costly lawsuits. The premise of a non-compete contract is that a business owns a customer relationship which is the furthest from the truth. The clients agree to voluntary contracts (either verbal or written) with the business and they did so at their own discretion. The buyer controls whether or not the business relationship should exist.

If an employee decides to leave, it is still up to the discretion of the client whether to go with the employee or stay with the business. It is their role as a buyer to determine the value of the products and services they are receiving. Take a look at how a non-compete contract is bad for all parties involved.

Bad for the employee:

• An employee will limit their career opportunities as other companies may be scared to hire someone with a non-compete.
• Because the employee knows about the threat of lawsuit they may be more apt to put up with a bad work environment that they normally would not tolerate.
• A non-compete may force the employee to take a new job in a new field and result in less earnings, or they may be forced to move which has associated costs.

Bad for the clients:

• If a client places a high value on the point of contact within the client, and that employee changes companies, that client should be able maintain that relationship if they choose.
• Non-compete agreements hinder competition, and thus limit the options available to clients which may result in higher efficiencies or lower costs.

Bad for employers:

• Non-compete contracts encourage complacency and laziness within an organization. If their employees have non-compete contracts, the organization will be less likely to “compete” to hold onto their employees.
• An organization that is not built on competition will become stagnant and will hinder growth potential. Ultimately it is the company’s role to provide a work environment that will best entice an employee to stay employed.
• Resources will need to be invested in lawyers and law firms that could be spent on R&D, marketing, or other business practices.
• When hiring employees you will not have the full employee market available to you because of other non-competes.

As a business owner; if I have employees that leave and can destroy the health of my company, I have not built a business that is prepared for a very common risk. If my company suffers greatly from a loss of an employee there is an obvious high value for my employees. I would need to build a company that focuses on employee happiness and encourages them to stick around and grow personally. That would require investing in my employees either through higher compensation or a focus on their goals and aspirations. If the success of my business depends on my employees then investing those resources would be worthwhile.

For instance, if one of their goals was to start up a competing business with slightly different value proposition then perhaps I could help them setup a joint partnership with my company and provide the resources they need to make it happen. There are a lot of creative solutions a business owner will be faced to solved when they don’t have the strong arm of the state behind them. Those creative solutions are better for all parties.

Non-competes are anti-free market, anti-capitalism, and anti-competition. They distort the markets and ultimately result in inferior products and services being provided to the consumer. Businesses are never entitled to any revenues, and they need to develop strategies to effectively compete without the strong arm of the government.

• Communicate – As always, communication is the key (especially if there are multiple people that are paying for the house). You will want to have open communication lines between you and your significant other as well as your real estate agent. I am a firm believer against holding your cards close to your chest. It harms no one to know exactly where you want to be and will probably save you headaches by not looking at houses that don’t fit your profile.
• Set your absolute limit – When you communicate with your partner you will want to have an ideal price and an absolute price. Your ideal price will be the price of the home you would prefer to be in where as the absolute price is the price you will not pay one cent over. The key is to be firm with your absolute price at all times. You will not want to waver at all and communicate that information with your real estate agent. After the emotions subside from purchasing a house you will not have buyers remorse if you stay at or below your absolute limit. Being consistent with your budget will also help your agent not get frustrated with your indecisiveness.
• Start searching early and be thorough – Now, not everyone is going to have the luxury of being able to start searching early. But the less you “must move in” the more you can get a better deal. In negotiation information is the key. By searching early you will get a better feel for the housing market and what are reasonable prices for the houses you are shopping. Also, don’t depend on your agent or others to do this work for you. It is your responsibility to know comparable houses stack up. Also, the beauty of starting early is that you can always walk away from the deal.
• Be flexible – There are a lot of variables in purchasing a house and flexibility can actually help your negotiating power. For instance the differences between buying a house for $200k and $5k closing costs and $195k and $0 closing costs are virtually nil. Your flexibility will show a more human side to your offer and help the seller be less defensive and frustrated. That in turn will allow the seller to be more flexible.
• Find the seller’s limit – Every situation is different but chances are if you aren’t putting an offer out there that you don’t think will be accepted you are leaving money on the table. This was a delicate situation for me and my wife as she is very conscious about others feelings. You NEVER know what the seller is thinking so don’t assume anything. Putting an offer out and it gets rejected/counter offered is a great thing and a necessary step to getting the best price.
• Trust your gut – Never forget that this home purchase is about you, your family, and your budget. This is your hard earned cash and only you are responsible for those monthly payments once they start coming in. While it is important to consider and empathize the sellers and agents point of view it is not your responsibility to fill their needs. It is also important to trust your gut in regards to your agents advise. Unless you are writing a check to your buyer’s agent they will always be motivated to sell the home – and as a result be a seller’s agent. As I suspected in our offer situation our buyer’s agent stated how the counter offer was a fair offer and was essentially working on behalf of the seller. I don’t take offense to this because I understand where our agent is coming from but by trusting our gut we stuck to our guns and benefited.
• Walk away – This might be the most powerful part of negotiating the purchase of a home. The key to this step is to look at the house purchase as a factual/logical decision and not an emotional one. If you are informed and confident with your offer price then the pressure is on the seller to match your demands. The beauty is that the seller may be willing to work at a later time if they have a change of heart. Remember that there is always another “perfect” house out there.
• Don’t be a dick – This may not necessarily get you a better price but it’s good advice. Look I know buying a home is a stressful and emotional event, but there is no reason to be a dick to people. Don’t get offended if they reject your offer or counter with something outside your range. There are a lot of people involved in the process and you shouldn’t be trying to “win” but instead to create a win/win deal. By communicating clearly and being upfront with all involved it will help make the process smoother. If you are being a dick and trying to win you may piss off your partner over an insignificant amount of money (trust me on this one – I know from experience).

Well, that’s all I got and I hope it helps you in your home buying process. There are a lot of guides out there that offer different advice and like I said before – information is the key. Good luck with your home buying process and enjoy it. Remember the big picture is about being happy and your decisions should ultimately be tied to your potential happiness.