The Real Estate Triangle

I have a tool, adapted from my Project Management toolkit, that I use to help explain real estate choices and decisions to clients. I decided to share it in a blog post after receiving a lot of terrific feedback about it from colleagues at my brokerage, McEnearney Associates.  This is the Real Estate Triangle of Triple Constraints. Of course it is just a model, but I believe it is an important one that reflects realistic constraints and relationships between different home purchase (or sale) factors.

For any given price range, or maximum purchase price, there are three main factors at play: Location, Condition, and Size & Features.  There are physical and market forces that limit the houses available in any given location, and this triangle of factors must be in balance for a given price.  It just is not possible to want a bigger house in better condition and located in a more desirable (or popular) neighborhood for a given price, if perhaps you've seen everything in your price range in a given area.

Another way to think about this triangle is: sometimes you need to sacrifice the condition (maybe everything was not upgraded last week) of a house to get the size and features you want (number of bedrooms, size of yard, finishes in the kitchen); or vice versa (condition is key, so the house may be smaller).  Also, a buyer should share with their agent what is their driving, priority factor in their search.  Sometimes a buyer might want to stay in their current school cluster, or they want to walk to the Metro or to shopping and recreation, so Location is their priority "leg" on the triangle. To get that priority feature, they may need to sacrifice on size depending on their price range.

I also use this tool to demonstrate to sellers how potential buyers will perceive their home based on comparables in their area, price, condition or size. If their house is a larger home compared to others in the same area and in similar condition, they may sell at a higher price. But if their home's condition and features (finishes and upgrades for example) are lagging behind others on the market, the price will be affected.

I am always happy to meet with buyers and sellers for an initial consultation about their situation and this is just one example of the tools and topics I share.