Throughout the process of selecting your ideal home in your ideal community, you likely consider the costs of the home, upgrades, location and your lot purchasing options. You may also wonder how lot prices are established. Why is one community or lot more or less costly than another? Read on to discover what factors will ultimately determine your lot price and why.
1. Square Footage
How big is your piece of the pie? When land developers divide the space into individual lots, they plan for different size options to provide a variety of selection to homebuyers. A value is assigned to the land as a whole and divided appropriately among all of the lots, which means of course if you want to build a custom home with larger square footage the value of your land will be higher.
Have you ever noticed the numbers on lot maps? These numbers are the indication of the lot size with the most important one being the number within the outline of the home on that particular lot. It tells you how wide the home can be on the lot. If you're looking to build a wider home, you have to make sure the lot you've chosen can accommodate the floor plan you want. If not, you need to size up and as such, your lot price will increase.
2. Location
There are two elements to assigning value due to the location of the lots. One element is that the developers consider how close/far the community is from everyday conveniences such as grocery stores, restaurants, and other lifestyle amenities. The further away from these amenities the land is, the lower the price of the lot will be.
Another factor is valuing the land due to the position of the lot itself within the community. Is it a pie lot in a quiet cul-de-sac? Does the lot back a forest of trees or another home? Is the lot next to an open green space or nestled among other lots? The developer when assigning values considers these, among other features.
3. Initial Costs and Utilities
Developers purchase sections of land from farmers and other landowners, and sometimes the cost of that land varies a great deal from location to location. Some land requires rezoning before it can be developed into a residential community, adding to the costs of the initial land preparation. In addition, the cost to bring in waterlines, sewer, cable, and other such utilities is added to the overall purchase price of that section. These costs are then divided and assigned to each lot.
These are the main factors in determining how your lot is priced and will help you anticipate your costs depending on where you plan to build . Feel free to visit or contact any of our show homes should you have further questions about how lot prices are determined.
