When you buy a new construction home, the base price of the home is only part of the cost. The builder also assigns a lot premium based on the specific location of your home within the community. Lot premiums can range from a few thousand dollars to well over $100,000, depending on the lot's features and desirability.
What Is a Lot Premium?
A lot premium is an additional charge the builder adds to the base price of a home based on the lot you choose. Lots with desirable features command higher premiums. A corner lot might carry a premium because it offers more yard space and fewer neighbors. A lot backing to open space, a park, or a golf course commands a premium for the view and privacy. A lot on a cul-de-sac offers less traffic and more play space for children.
Lot premiums can be significant. In desirable Las Vegas communities with mountain or Strip views, lot premiums of $50,000 to $150,000 are not uncommon. Even in mid-range communities, a premium lot can add $10,000 to $30,000 to the purchase price.
Look Beyond Today's View
When deciding whether a lot premium is worth it, think beyond the immediate appeal. A lot backing to open space today could have homes built behind it in the next phase of development, blocking your view. A lot near a planned commercial zone could face years of construction noise. Review the community's master plan to understand what will be built on the land surrounding your lot.
Also consider resale value. Premium lots typically hold their value better than standard lots. A home on a corner lot, a cul-de-sac, or backing to open space is generally easier to resell at a higher price. The premium you pay today may be recovered when you sell.
Make an Informed Decision
When touring a new construction community, ask the sales representative for the lot premium schedule. Compare the premium amounts across available lots and decide which features matter most to you. Your agent can help you evaluate whether the premium is reasonable compared to similar lots in other communities.
A lot premium is an investment in your daily enjoyment of the home and in its future resale value. The key is understanding what you are paying for and making a deliberate choice rather than an impulsive one.
