Tearing Down a House
It's Fairly Inexpensive to Demolish a House
Tearing down a house might be easier and cheaper than trying to fix-up a home that has completely deteriorated. It's also less expensive than, say, moving a home to another lot. But sometimes the home in such poor condition that it can't be salvaged.
I asked an agent in my office -- who deals with a lot of contractors in Midtown Sacramento -- how much it would cost to tear down a house. The agent estimated a ballpark figure of $15,000 to $20,000.
To confirm that estimate, I called an independent contractor, Jeff Von Rotz Construction. Mr. Von Rotz recently demolished a 1500 square foot, single-story house in Midtown -- demoing it back to the dirt, which means removing the foundation -- for about $18,000. That price also included tearing out the basement.
Bear in mind, these are 2007 prices, which will likely increase over time due to inflation and may cost more in other cities. But it's still, excuse the expression, dirt cheap to tear down a house and haul it away. Having torn down structures myself, I have first-hand experience that bids can be all over the place. Just to tear down a small carriage house in 1995, I received bids ranging from $150 to $1200. Make sure the bids include hauling away and disposal.
Is the House Worth Tearing Down?
Before hiring a bulldozer to slam into your house and smash it into smithereens, consider hiring a consultant who can advise you if it makes financial sense to tear down the house.
A house that may look like a total ruin to you might be salvageable. Fixing crumbling walls, sagging roofs or sloping foundations is not as expensive as you may imagine.
On the other hand, considering that postage-stamped lots sell in metropolitan cities like Sacramento for more than $300,000, the land on which the home is situated might be worth more without a house if that house has outlived its useful life.
Check with your city building department to find out if the home you want to tear down is on a historical preservation list. In Midtown Sacramento, for example, Victorians cannot be destroyed, even if their foundations and wood components are decayed.
Before You Tear Down a House
- Obtain a Permit.
You will most likely need a permit to tear down the house, so check with city and county officials. Sometimes home owners do work without a permit, which is never advised, thinking nobody will notice. But a huge bulldozer in the yard, clawing away gigantic chunks of your house and slamming the debris into rubble, is going to draw attention. So, get a permit, if it is required.
- Check with the Fire Department and Utility Companies.
You may not realize that gas, water, and electricity can't simply be turned off and ripped out. Utilities need to be properly disconnected and abandoned or terminated at the source. Your local fire department and utility companies might want to inspect and sign-off on this work first.
- Inspect for Hazardous Materials.
Many older homes were constructed with materials that today are considered hazardous. Asbestos, for example, was commonly used in flooring, ceilings, wrapped around duct work and contained in siding. Asbestos abatement can cost an additional $2 to $3 per square foot to remove, according to Von Rotz Construction. If you discover an old diesel tank underground, except to pay a surcharge.
- Call Your Mortgage Lender.
Unless your property is free and clear from any liens or encumbrances, your mortgage is secured to the structure as well as the land. Your lender has an interest in the building itself, so you cannot unilaterally destroy the lender's security without permission.
If the lender's security is damaged, realize your loan may contain an acceleration clause, which allows the lender to immediately demand payment in full. An alternative is to arrange for construction financing, which will carry a higher interest.
- Submit Building Plans for Approval
Even if city building codes allow construction of certain structures, your community may prevent you from building the home you desire. If you don't want to find yourself sitting in the dirt on a vacant lot, drying tears with your architectural drawings, submit your plans to all the appropriate authorities beforehand.
Moving the House Instead of Tearing it Down
Although it can cost around $100,000 or more to move a house, transporting it to another location is a reasonable solution you might want to consider. One way that kind of situation can work is like this: You offer to sell the house to a buyer for $1.00, providing the buyer bears the expense of moving it. You win. The buyers win.
But make sure the house can physically be moved to its new location before signing the deed. For example, areas such as downtown and Midtown Sacramento are bordered by freeways. These neighborhoods are essentially landlocked because the homes are too tall to fit under a bridge or freeway. Thinking ahead is priceless.
At the time of writing, Elizabeth Weintraub, CalBRE #00697006, is a Broker-Associate at Lyon Real Estate in Sacramento, California.