We have a unique market here inside the beltway. There are very few vacant lots available, and as a result, the majority of new homes are built by purchasing an existing home and tearing it down to reuse the land.
As a homeowner, there are two reasons you want to ask yourself if your home is a teardown:
1) You’re Thinking of Selling
You’re getting ready to sell, and the size and/or condition of your home isn’t up to par with other homes in your neighborhood. In this case, it might make financial sense to sell your home directly to a builder.
Here are some questions to help you decide:
1) What is the current value of your home as it stands now?
2) What are other comprable homes (square footage, beds & baths, etc) selling for?
3) How much would it cost to fix your home up to a level where it’s on par with comprable homes that are selling in your neighborhood?
4) Are other similar homes in your neighborhood being torn down?
5) Is your home undersized compared to other homes in the neighborhood?
If the current value of your home is low compared to others in your area, and the cost of fixing it up is more than you’d get back when you sell, your home is a good candidate for a teardown.
On the other hand, if some minor renovations / additions are enough to bring your home up to snuff with others in your neigborhood, your home may not be a teardown.
One other thing to consider: If a lot of homes similar in size and price point to yours are being torn down, you may want to consider selling directly to a builder, regardless of condition.
2) You’re Thinking of Renovating
Even if you want to upgrade your home and stay in place, a teardown might make more financial sense for you.
If you’re considering renovating your home, think about this:
1) How much is your current home worth?
2) How much will it cost to renovate?
3) How much are comprable homes to your potentially renovated home selling for in your neighborhood?
If the total value of your existing home plus the cost of renovations is less than or equal to the potential value of your home, renovating might make more sense than tearing down.
However, it is often cheaper and easier to demolish the existing home and start over.
You may not need to demolish the entire structure. Depending on the condition and size of your existing home, tearing down to the foundation can be a viable option. I’ve done this several times in Arlington.
So Is Your House a Teardown?
No matter what your scenario, the most important factor in deciding whether or not your home is a teardown is accurate information. For this, turn to the experts:
If you don’t have an accurate idea about the current value of your home, contact a Realtor® who will give you a Comparative Market Analysis(CMA). It can be a good idea to get 2-3 different CMAs on your home, as different Realtors® will have different views on how much your home is worth. A good Realtor® should be able to help you answer all of your market questions.
For questions about renovation and new home construction, contact a quality general contractor. They should be able to give you some ballpark ideas of what it might cost to renovate vs teardown and rebuild.
As both a Realtor® and homebuilder for many years, deciding whether or not a house is a teardown is one my specialties. If you’d like to talk about your situation, please feel free to contact me anytime.