@malteser, is lot empty? How the icon look? (It may look empty but if Sim was placed there then evicted, game consider it as home, even if nothing was bought or built on it).
Lot would never be considered too big, only too small, so that is not the problem, but I really don't know what else might be a problem.
Can you change other lots?
@CSquared you're welcome, I didn't know it's different neither, until in one tread Pam said that for residential lots option is greyed if lot is smaller, I usually place comunity lots so I didn't know about it.