This article appeared in The Weekly Review.

Hi I’m Mal James. I’m a buyer agent, having a light beer at Brown Cow in Hampton with Terry.

Terry: I’m looking at buying that home in Brighton’s Golden Mile?

Mal: How can I help?

Terry: What price do I pay?

Mal: Why are you looking to buy? Is it an investment?

Terry: No. Annie and I now want to live by the beach.

Mal: It’s a good emotional outcome you are after.

Terry: Yes but I haven’t got to where I am today by being financially stupid – I’m looking to pay you on an incentive fee to go real low on price.

Mal: OK, I’ll just put in the lowest offer for the highest commission for me. I’ll ring you if we get it.

Terry: Hold on Mal.

Mal: Thanks Terry but I’m going for the full commission so I’ll sit on the lowest offer.

Terry: Look buddy. I make the decisions, not you.

Mal: Correct Terry. Price is your decision, not mine. So incentives are a bit incongruous – I’ll take them but…… I really earn my fee by taking you through a process and fully informing on the risk v reward scenarios – not throwing a dart at a numbers board and then hanging tough.

Terry: Risk v Reward

Mal: C’mon Terry, you’re a man of the world. We can offer $5.5million and the reward is a big saving but the risk is huge we are not taken seriously; thereby missing it. Alternatively we can offer really high to reduce risk but……Risk v Reward.

Terry: My Risk v Reward is clear at $7million.

Mal: Maybe. How often does this opportunity come up and won’t it benchmark future prices.

Terry: Are you working for the vendor or me? I wasn’t thinking of paying $7m.

Mal: 1/2 my time is talking clients up on the good deals and the other 1/2 talking clients out of the bad ones. I think $7m is not something you should entertain unless proven competition, however is $7million something you can’t afford if there is?

Terry: It’s not how I have done deals in the past

Mal: This is emotional with lots of variables. It’s more than one on one negotiation. Saturday: Two strong buyers and its $7million. Wednesday: Only you, your smart and its $6million. Same property. Same agent. Different day.

Terry: I don’t want to pay too much.

Mal: Who does, but I’m always told I pay too much.

Terry: Come again – the beer you’re drinking is only light isn’t it Mal?

Mal: You know Terry I don’t know if I’m unlucky or untalented but I never seem to buy a home where I pay less than the other guy’s live unconditional bid.

Terry: I doesn’t sound like you’re good at the job Mal?

Mal: Thanks for the feedback Terry. What is my job?

Terry: To buy homes?

Mal: Well I’ve bought hundreds but, to date, not one below another buyer’s better live offer. Same at auction – I’ve must be unlucky there as well – not one auctioneer has knocked it down to me as the underbidder.

Terry: I’m losing patience with you – you’re a real pain in the ar…….

Mal: Two more beers thanks! Possibly I am Terry. You’re looking to buy a property that comes up once every five years or so and to date you tried to hire me in a manner that will guarantee you either miss this home or buy it in a way where you have paid me to add no value; neither is smart business practice.

Terry: So what do you suggest – how can you help me?

Mal: May I suggest a deep breath and Step One with Annie we look into why it is you really want to buy this home. What are the financial and emotional consequences of buying and not buying. This is Clarity. Step Two is normal due diligence with regards to price and covenants and architects etc. Step Three – we can walk you through your negotiation options.

Terry: Deep down I really want to buy. I love Annie and she wants this home. I don’t want to miss it; but being brutally truthful like you are being with me, I don’t want people thinking I paid too much or I got conned.

Mal: We are getting onto the same page Terry. My role is to help you get what you really want and despite all efforts sometimes it just wasn’t meant to be. However if your focus is right, the strategies are correct and the hard work is done then I find in the end more often than not, you do get what you really want.

Terry: I think I’m getting it Mal. All the decisions are ours to make and if Annie and I buy well then we will always pay more than the other guy but it’s never too much.