I asked an agent in my office, Tony Baccelli -- who deals with a lot of contractors in Midtown Sacramento -- how much it would cost to tear down a house. Baccelli 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.
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, with even postage-stamped lots selling in some areas for more than $300,000, the land on which the home is situated might be worth more without a house that 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 the home has an old diesel tank, 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. It works 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.
At the time of writing, Elizabeth Weintraub, DRE # 00697006, is a Broker-Associate at Lyon Real Estate in Sacramento, California.