If a newly constructed home sells for $300,000 and the land to building value ratio is one-to-three, what is the estimated site value?

To determine the estimated site value based on the given land to building value ratio of one-to-three, it's important to understand what that ratio signifies. This ratio indicates that for every one part of land value, there are three parts of building value. In simpler terms, the building represents three times the value of the land.

The total sale price of the home is $300,000, which includes both the land and the building. To break this down using the specified ratio, we can denote the value of the land as 'L' and the value of the building as 'B'. According to the ratio:

• L = 1 part
• B = 3 parts

Thus, we can express their relationship mathematically as:

L + B = $300,000
L + 3L = $300,000
4L = $300,000

To find the value of L (the land), we divide both sides by 4:

L = $300,000 / 4
L = $75,000

Therefore, the estimated site value of the land is $75,000. This calculation confirms that the answer is accurate when applying the land to building ratio correctly to the total value of the home.