It's a common dilemma. You're shopping for a new home. You look at a property in that swank, "hot" development and you fall in love with the floor plan, the amenities, the granite, the spa tub -- and then you look out the window. No big shade trees. No character. Houses just a little closer to one another than you might like.
So, off you and your real estate agent go to look at older homes in older neighborhoods. There's a park across the street? Perfect! A swing in the massive oak tree in the front yard? Even more perfect! And then you walk through the front door and encounter a temple to the 1960s. Bad floor plan, a kitchen that belongs in a museum, and bathroom wallpaper that's the stuff of nightmares.
What to do? How about buy the lot, tear the house down, build your own version of that dream house packed with amenities, and live happily ever after? "Tear downs" are much more common than buyers realize, and will become more common as the aging Baby Boomer population begins to put their homes on the market. If negotiated properly, a tear down can be cost effective and a great home buying option.
** Always Run the Numbers **
Although every case is unique, it's safe to say that tearing a house down to the dirt (which can even mean digging out a basement) costs anywhere from $20,000 to $25,000. If an older home can be purchased at a low price and you can afford to finance the construction of the new place, what you gain in appreciated value plus the value of the land itself may make the math work to your favor in the end. This is not, however, an all or nothing proposition.
** There Are Shades of Tear Downs **
First, don't throw the baby out with the bath water. Hire a consultant to evaluate the home. Describe the features you like and don't like in the property, and outline your vision for the home in which you do want to live. Find out if the two can be morphed into one. It's not uncommon to save key walls, but completely remake the interior floor plan. Find out what's possible in terms of partial reconstruction versus total reconstruction and carefully compare the costs.
** Find Out What Is Involved with the City and Utility Companies **
The city will likely require a permit for a tear down and there may be other ordinances that apply. In really old areas, you may be bound by aspects of historical preservation. Also, you can't just turn off and rip out gas, water, and electrical lines. Each utility company will need to properly disconnect the service and it may be necessary for the local fire department to inspect the site and sign off on the work first. Fees and permits may apply in each case.
Be prepared to submit your building plans for approval. The new structure or newly renovated structure will have to pass inspection and comply with local building codes. This is especially important in the case of a complete tear down. Get all plans approved before construction starts, since mid-work delays are costly and incredibly frustrating.
** Have the Home Evaluated for Hazardous Materials **
Depending on the age of the home, asbestos will likely be present. The material was commonly used in floors and ceilings, as well as in insulation wrapping duct work and pipes. All asbestos will need to be removed properly regardless of whether the house is about to meet a bulldozer blade or just undergo a major renovation. Asbestos "abatement" costs range from $3 to $5 per square foot, but the safe removal of the contamination is a crucial and unavoidable necessity.
** Location is Always a Factor **
Often older, established neighborhoods are in favorable proximity to schools, retail and cultural districts, parks, and other local features of prime importance to homeowners -- especially families with young children. There's no need to rule out these areas just because the houses are older. A tear down may seem like a daunting project, but there's no price for considering it. At most, you might wind up paying a consultant to give you an opinion, but the option to walk away is always there until you've signed on the dotted line.
There are approximately 77 million Baby Boomers in the United States, about a quarter of the population. For the next 18 years, one of them will celebrate their 65th birthday every day. That fact alone means that many wonderful homes in great locations will become available as the Boomers downsize and relocate. It's completely possible that you can turn their dream home into your own with a full or partial tear down, an option home buyers will be considering more frequently in years to come.