Home-selling tips: The ‘how do you cut your sandwich’ analogy
Special to the Sun-Bonanza
When you prepare a sandwich, which way do you cut it? Are you a diagonal cut person, or straight down the middle? Is the middle top to bottom, or side to side?
Maybe you grab your sandwich whole and just take a big bite. Do you bite in to a corner or the middle? Do you save a special part for the last bite? This simple part of life, slicing a sandwich, is very much like real estate.
The sandwich is the same regardless of how you cut it. The ingredients and flavor are unchanged, it is just a matter of delivery, perspective and personal preference.
Real estate is the same way. If you want to buy or sell a home, you will have goals and objectives. The result will be the same, a property is sold and transferred. Along the way, however, can be a variety of decisions and choices that make it appealing to the respective parties.
Investment real estate best represents the sandwich analogy. The property is what it is, cash flow what it is, and upside potential will be what it will be. So how does one value the acquisition? Some look at Cap Rate, others Internal Rate of Return, Gross Rent Multiplier, or how many tenants signed their lease on a Tuesday.
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Whatever the methodology used, real or contrived, the reality is that the “vital statistics” of the property remain the same, whether sliced diagonally or side to side. Everybody has their acquisition formula for success, just as we all have a preference for how to cut our sandwiches, but a little flexibility here and there opens many doors.
If you recognize that it is really important to the other side that their first bite is the angled tip of the diagonal cut variety, go with it and enjoy your first bite as well. That accommodation could get you what you want.
Residential real estate has a variety of subjective components that come in to play such as floorplan, HOA issues, CC&R issues, lot size, paint — color as well as maintenance status, repairs, occupancy terms, etc. All of these components can compare to condiments in a sandwich as they change according to taste, preference, availability, price, etc.
They get bundled up in a transaction that has different perspectives depending on who is looking at it. The Buyer may slice it diagonally, Seller horizontally, and the Agent approach it whole, but it is really all the same thing.
The frustrating part occurs when you’ve taken a few bites and the Loan Underwriter says you shouldn’t have cut it when, or how, you did.
Their perspective of the same circumstances can be very different than those of the Buyers and Sellers. The contract may call for a Buyer to pay for a pest inspection, but the VA loan that the Buyer changed to won’t allow it. Similarly, a Seller may wish to give the Buyer a credit for roof repairs but the Lender won’t allow it. Time to adjust.
Our Advice: There is more than one way to create a real estate transaction. You must decide for yourself what is important to you and work with your Agent to create the right scenario. When you’ve figured out what you want and understand what the other party wants the result is usually an amenable agreement.
When you cook up the right circumstances it will plate well and everyone will be happy. Maybe you need to slice your sandwich differently for the sake of making the transaction work, but in the end you’ll have the same flavor and satiation of hunger. Get the property sold/bought and get on with your life!
If it’s a simple matter of how to slice it you’ll be fine. If one party wants it served hot and the other cold … you’ve got some work ahead of you. Can you slice it and heat one half? See what you can do to make everybody happy and you’ll have a successful transaction.
Lisa Wetzel & Jim Valentine, CDPE, SFR, work for RE/MAX Realty Affiliates in the Carson Valley. Visit carsonvalleyland.com or call 775-781-5472 for information.
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