Less Can Be More: 4 Tips for Selling Big Houses on Small Lots

Sometimes there’s nowhere to go but up. That’s a trend that new home builders have followed for years: Building bigger homes on smaller lots. Zillow Research found that in the last 15 years, the median lot size for new homes has decreased from about 9,600 square feet to 8,600 square feet — an approximate 10 percent reduction.

But while lot size is shrinking, the new homes built on them are not: During the same time frame, detached single-family homes have increased in size about 24 percent — with the median going from 2,100 square feet to 2,600 square feet. This can translate to areas dense with homes that are shoe-horned into close quarters with the neighbors.

1. Determine priorities: home size or lot size?

Help your client decide what is more important to them: the size of their home or the amount of land it sits on. The trade-off of the small-lot-bigger-house trend is that if buyers pay less for a smaller lot than for a larger lot, they can use the cost difference to pay for a bigger home. The lack of a substantial yard might not be an issue for buyers who don’t have kids or pets.

2. Spotlight their chance to upgrade

The research shows not just that lot size is decreasing, but that the average median home size for smaller lots is increasing. More living space allows the homeowner a chance to do more with their extra square footage — perhaps feature a den or media room, create walk-in closets or larger bedrooms, or simply upgrade the level of luxury.

3. Point out the minimal maintenance

While many homes on smaller lots might offer some greenery in front, along with an area for a deck or patio in back, a tiny yard might appeal to buyers who simply have no interest in maintaining a lot of outdoor space. Plus, the smaller lot will be less expensive and time-consuming to keep up.

4. Highlight the community

The trend for bigger homes on smaller lots occurs in upscale neighborhoods and historic areas — even on the waterfront — so it’s a chance for homeowners to purchase in places that might otherwise have been cost prohibitive. It’s also often the case that neighborhoods with small lot sizes feature more community amenities, such as parks and pools, retail shopping and proximity to transportation.

While small lots might not offer the same resale value as a larger chunk of land, the bigger homes that are built on these lots may allow a homeowner to recoup some of the difference. For many buyers, more living space inside can be a fair trade for a lack of green space outside. With inventory on the rise, these new detached single-family homes can deliver more than their homeowners expected.