Tearing Down a House and Alternatives to Demolition

tearing down a house
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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.

Key Takeaways

  • Some homes aren’t the lost causes they appear to be, but sometimes their lots are worth more without a dilapidated house sitting upon them.
  • Proceed carefully if you decide to tear down a house. Permits will almost certainly be required, and all utilities must be fully shut off.
  • Tearing down a house can be cheaper than repairing it to code standards or moving it, but it’s not without its downsides.
  • Talk to a financial advisor who knows real estate to help you weigh the pros and cons and determine what makes the most financial sense.

Is the House Worth Tearing Down?

Before hiring a bulldozer to slam into your house and smash it to smithereens, consider hiring a consultant who can advise you about 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, 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 tear down and build a new home are often more expensive and time-consuming to obtain than a remodel permit.

Tip

Check with your city building department to find out whether the home you want to tear down is on a historical preservation list. There may be rules and regulations regarding the demolition of buildings designated as historic landmarks, such as in San Francisco.

Before You Tear Down a House

If you decide that 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 that 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. Your lender has an interest in the building itself, so you cannot unilaterally destroy the lender's security without permission. One 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 might 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 of the appropriate authorities beforehand.

Moving the House Instead of Tearing It Down

Although it can cost anywhere between a low of $15,000 to a high of $200,000 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, provided that the buyer bears the expense of moving it. You win, and the buyer wins 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.