We're using a 1/2 Acre lot that we're selling to show you how a little math can help you uncover value:
If you’re buying lots, the Square Foot Price can tell you if you're paying high, low or the fair market price. If you're buying Land by the acre, use price per acre, but for lots, Sq. Ft. gives you a good picture.
Price by itself can be misleading.
Here's what the lot prices look like before doing a Sq. Ft. comparison. It doesn't tell you the value information.
Square Foot Calculation:
- Lot price divided by Square Footage = price per Sq. Ft.
- $ 16,800 (lot price)
- ÷ 20,373 (Square Footage of lot)
- .82 per Sq. Ft. (price per Sq. Ft. rounded down)
By using the Sq. Ft. pricing methods, you quickly see that the seller is pricing the lot much lower than other Active lots in this area. If all things are equal, you're getting a better value for your money.
How to compare local lot prices:
- Compare available lots within your selected neighborhood by location, size & shape
- Divide the prices of your chosen lots by the Square Footage of each lot
When you figure out the Sq. Ft. price, you’ll get a better picture of whether you’re buying high, low or at market value. In many neighborhoods, you may have a wide-range of prices for Active lots. In areas with big price differences, you will also want to do a sales comparison which shows you what prices have actually been paid in the area.
If you're a buyer in search of a lot, click to see the lot we used in the example: www.HalfAcreLot.com
In North Port FL, you have many options. You can buy a lot on a freshwater canal or a non-canal parcel. The difference in price in a given area can range widely. A freshwater canal lot can fetch a 20 -to- 25% price premium. In some instances, it may fetch a 50% premium and may be worth the additional money. You can adjust the price of a canal or a non-canal lot up or down depending on the lot you’re trying to compare it to.
If you have questions about selling your property (home, lots or land),
call Scott - Phone:
941-882-5494 Ext 701
It's better to compare similar lots
If you have many non-canal lots to use for comparison, you're better off excluding the canal lots and visa-versa. If you don't have enough similar lots to use for comparison purposes, then an adjustment to the canal lots may help you. In the price per sq. ft. list, the last two lots are located on a canal. Therefore, if you're using the canal lots as comparisons, an adjustment is needed to determine if you are paying a fair market price for your non-canal lot.
How to adjust for differences
Subtract 20 to 25% from the canal lot and then re-calculate the Sq. Ft. price. You can now include the Sq. Ft. adjusted price in your comparison. Adjusting the price of the canal lot can help you compare them against the non-canal lot you’re interested in buying. If you’re evaluating a canal lot, you can do the calculation in reverse by adding 20 -to-25% to the non-canal lots you’re using in your comparison.
This is just one analysis. You can have a CMA (comparative market analysis) prepared which shows sales comparisons, expired, etc. The Sq. Ft. analysis is a good snapshot for a quick gauge of how much you’re paying compared to other nearby available lots.
If you're building a home for yourself and you found the perfect location, paying a high price for the lot may not be an issue. If you’re a lot investor or plan on building and selling within a couple of years, then lot price matters.