Lot Premiums and Orientation: What the Extra Money Buys

Two houses, the same plan, the same elevation, the same specification. One costs more than the other because of the ground it sits on. That difference is a LOT PREMIUM, and it is one of the few genuinely durable decisions in a new-home purchase.

You can change flooring later. You can add a pergola later. You cannot move the house, and you cannot change which way it faces, what backs onto it or how the ground falls away from it.

This article extends the new-construction guide and follows from the plot plan article, which is where the physical facts of a lot are recorded.

The honest test for a premium

Ask one question about any premium lot. Would a future buyer pay for this too?

Some lot advantages are broadly valued: a view, genuine privacy, a usable rear yard, distance from a busy street, a position that is not the most exposed on the block. Those tend to survive a change of owner, because the next person wants the same things.

Others are personal. Being closest to a particular amenity, or on a specific corner, may matter enormously to you and not at all to anyone else. That is a perfectly good reason to pay, provided you are paying with your eyes open rather than assuming the market will refund it.

And some lots carry a discount for a reason. Backing onto a road, sitting at the low point of the drainage, having every window facing a neighbour. Those are not automatically bad buys, but the discount is information.

Orientation in this climate

Claremont sits at the foot of the mountains, and the sun does real work here. Orientation is not a decorating question.

WEST-FACING GLASS takes the afternoon sun in the hottest part of the day, in the hottest part of the year. That is a comfort and a cooling-load question for the life of the house, and it is influenced by glazing, overhangs, shade and eventually landscaping.

NORTH-FACING ROOMS stay cooler and get gentler, steadier light. SOUTH-FACING space gets sun through the day, which is welcome in winter and manageable with shading in summer.

Roof orientation matters too, for anything mounted on it now or later. So does where the mechanical equipment sits, which affects both noise and how easy it is to service.

And view direction is worth standing on the lot for. Whether the house is positioned to see the mountains, or to see the side of the next house, is not always obvious from a plan.

Stand on the ground, more than once

The most useful thing a buyer can do is visit the actual lot rather than the model, and visit it at different hours.

Go in the morning and again in the late afternoon. Notice where the sun lands and where the shade is. Listen: traffic, a school, a plant running, a route that is quiet at noon and busy at seven. Look at what is uphill of you and where water would go in a heavy rain.

Then look at what is around and what is planned around it. Adjacent vacant ground will eventually be something. Ask what the approved plans show for it, and verify with the city rather than relying on a conversation. The site-visit article covers making these visits count.

Read the lot documents, not just the price sheet

A premium is a price. The lot's actual characteristics are in the paperwork.

Grading and drainage: how the ground slopes, where water is directed, and whether you are receiving or shedding. Easements: utility, drainage or access rights that limit what can be built or planted. Setbacks and buildable area: how much of the lot is usable in practice. Retaining structures: who owns them and who maintains them.

Soil conditions are their own subject, and the soils report article covers what that document tells you. Title questions on newly created parcels are covered in the parcels article.

The premium is not the only lot cost

A larger or steeper lot brings ongoing costs the price sheet does not mention. More landscape to install and to keep alive. Retaining or drainage structures to maintain. Sometimes a longer driveway to keep up.

New-home landscape allowances are frequently thinner than buyers expect, and a big premium lot is exactly where that gap is widest. The landscape allowance article is worth reading before you commit to the biggest lot on the plan.

Negotiating around it

Premiums tend to be resistant to discount for the same arithmetic that makes headline price resistant: it sets a comparable for every other lot in the project. That does not mean there is nothing to discuss.

The usual approach is to accept the lot price and ask for value elsewhere, in the currencies described in the negotiation article. And if a premium lot is genuinely beyond reach, a standard lot with a good orientation often beats a premium lot with a poor one.

Write down why you chose it

This sounds sentimental and it is not. A lot decision made across several visits, under pressure, in a release window, is easy to misremember six months later when the neighbouring ground turns out to hold something you did not expect.

Keep a short note. Which lot, what you were told about the surroundings, who told you, and on what date. Attach the plot plan you were shown and a photograph of the ground as it stood that day.

If everything goes as described, the note costs you five minutes. If something turns out differently, you have a dated record of what you relied on, which is a far better position than an argument about a conversation. And when you eventually sell, the same note reminds you exactly which advantages to lead with.

Where to go next

Return to the hub above for the whole sequence, and read the model home article next, because the lot the model sits on is rarely the lot you are being offered.

If you want help judging a lot in Claremont before you commit to it, get in touch. Anthony Grynchal has been licensed in California since November 2009.