Vacant Land-Single Family Lot Pricing Sample.

    Vacant Land-Single Family Lot Pricing Sample.

    Apr 09, 2021

    Single Family Lot Pricing Sample Subject Property: 0.75 acre single family house lot in Tiverton Septic and well required, no engineering done In order to determine the value of the lot, we first have to determine the value of the house that will be built on it, and then work our way back from there to the land value. Assume that you have done a CMA and concluded that a new 4 bedroom home in the 2,500 s.f. range with a two car garage on this lot would sell for $629,000, and that a house this size would be in harmony with the neighborhood. Also consider that new construction typically carries a 15% price premium over similar nearby older homes. For a single family house lot, builders typically want their total land cost to be between 25% and 30% of what they want to sell the house for. The total land cost is the purchase price of the property, plus all the required site work. Basically, it's everything but the house itself.

    The position within that range depends on a number of factors, including the price point of the home, and the desirability of the neighborhood.

    Since the market is hot right now, and the property is in a desirable area, let’s use the 30% figure.

    So, $629,000 x 0.3 = $188,700.

    Now, we have to subtract the site costs:

    4 bedroom septic system...........$16,000

    Well……………………………….. $5,000

    Driveway…………………………..$5,000

    Landscaping………………………$2,500

    Total...........................................$28,500

    $188,700 total land cost - $28,500 site development costs = $160,200 for a market value for the lot.

    I would list this property for $169,000. If the lot had public sewer and water services stubbed at the property line, I would price it like this:

    Sewer & water connections……..$6,000

    Driveway…………………………..$5,000

    Landscaping………………………$2,500 T

    Total………………………………$13,500

    $188,700 total land cost - $13,500 site development costs = $175,200 for a market value for the lot. I would list it for $185,000.