Tearing Down a House and Alternatives to Demolition
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 moving the home to another lot, for example. But sometimes, the home is in such poor condition that it can't be salvaged.
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 whether it actually makes financial sense to tear down the house.
A house that may look like a total ruin to you may actually be salvageable. Fixing crumbling walls, sagging roofs, or sloping foundations may not be as not as expensive as you're imagining.
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. Moreover, the permits to build a new home are often more expensive and time-consuming to obtain than a remodel permit. To get around new permits, sometimes owners will leave one wall.
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, Victorian homes cannot be destroyed, even if their foundations and wood components are decayed.
Before You Tear Down a House
If you decide demolishing a home is the right option, be sure to follow these steps for a smooth process.
- Obtain a permit. You will most likely need a permit to tear down the house, so check with city and county officials. Sometimes homeowners do work without a permit, thinking nobody will notice, which is never advised. 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 be sure to get a permit if one 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 and ceilings, wrapped around ductwork, and contained in siding. Asbestos abatement can cost an additional $20 to $65 per square foot to remove. 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 all 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 that 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 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, 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 to consider. Here's an example of how it can work: You offer to sell the house to a buyer for $1, providing the buyer bears the expense of moving it. You win, and the buyers win as well.
But make sure the house can physically be moved to its new location before signing the deed. For example, many areas are bordered by freeways. These neighborhoods are essentially landlocked because the homes are too tall to fit under a bridge or freeway.