There was a similar thread some time ago, and lots of good advice was given:

https://www.houzz.com/discussions/renovate-or-detonate-dsvw-vd~5122023?n=19

Sell it and move or build new.

Do you have the money to pay off your mortgage and then spend an extra 500K to build a new house? If so, then go buy a new 800K house.

Can you afford to throw away a $300,000+ purchase 3 years ago? Then do it. That's strictly a financial issue that nobody online can ever help you with because we know nothing about too many variables. You need to talk to--and pay--an accountant/financial advisor, not ask a bunch of strangers on the internet.

Turn off the computer and call someone tomorrow.

If the empty lots are going for 240k and they are not as amenable to building as yours, it might make sense to build new on your lot. You do not want to overbuild for the neighborhood. Are others in the neighborhood also building new?

I am building on a tear down right now. It was a 1950s house. As a general rule, tearing down a 23 year old house is not a smart decision. You would of course have to find a place to live for a year (or more), your house would be too nice for the neighborhood (presumably) and it is a horrible thing to do for the environment.

What you do when you buy a bad house is sell it. Like Sophie has stated, if you can afford an $800k house, it is a much better idea to buy one (or build one somewhere else).

Move. Unless you have 1.2 mill which will get you a half decent, no landscaping new build with five bedrooms, four and a half baths, hardscaping/landscaping. Make that 1.5 as you first need to pay off the other mortgage. Then go the bank, and before all get an architect and make sure the 1.2 will cover it.. In a neighborhood of 300/400k /600k 800k what ? homes..............................?

It's 2018, not 1995.

With no mortgage, think of the $335k as a cash investment.

You demolish the house (factor in demo cost).

Comps are $675K, (and do you know that number is accurate?) To stay in that range, what can be built new for $340k on your $335k lot? Guessing not everything you want.

Conversely, what can you do to the existing house for $340k?

The other option is to sell. How much over the $335k do you know would be a reasonable listing price? Just for an example, let’s say you sell for $435k. Now you have no house and no lot, but $100k, give or take, toward the purchase of a new home ( which is perfect and needs nothing).

Look on Redfin and see what is available in your area. You may be surprised to find out it is better to invest in what you own ( a good lot, in a great location).

As an aside, I have no idea what building cost is where you live. In my neck of the woods I couldn’t buy a decent lot for $335k (and it would be raw land).

Add a knowledgeable realtor to the list of professionals you should consult.

Depends upon your location. It’s very common in my area for houses to be demolished and then rebuilt on the same site since available lots are scarce & very expensive. ($1 mil + ). It’s also common for a buyer to purchase the house and then basically rebuild within the same walls due to constraints on setbacks, etc. The house across the street from mine was purchased a year & a half ago & it’s STILL being remodeled. The owners haven’t moved in yet. As JudyG stated depends upon building cost, sometimes it makes sense ....

What is the price range of homes surrounding your house?

Take the total cost of demolition plus the cost of new construction and when everything is done and over with, and you end up with the total cost invested is 15-25% lower of what the surrounding homes sell for, its worth doing that.

what gives me pause is the 'we have detected mold in our house'.

half of my brain wonders does any house in florida not have mold. the other half wonders is this house saleable without a lot of mold removal. would the floor plan put others off as well. etc.

i guess it depends how big your war chest is, how much mortgage has to be paid off, and are you up for a big adventure.

Our situation was similar to Victoria's. Our existing house was worth low $400s. We knew we could expand & gut reno and end up with something worth $800 minimum as other houses in the neighborhood and done so and sold at those levels. We worked closely with our architect & builder to make sure we wouldn't go over that level, and it turned out great - bank appraised for $850 at the end. And as luck would have it the old version of our home hasn't appreciated much, if at all, but the larger ones have, so we are (for now) even more in the money. but our neighborhood is changing as the post war 3 beds are being expanded so the valuations are supported.

You need to figure out (talk to a realtor) what the value of the home you'd like to build would be, and go from there.

I know your neighborhood well as I'm a Realtor in Wellington. You can do better by selling your current home and purchasing one that meets your needs elsewhere in Wellington. Otherwise you are over improving for that neighborhood. The exception would be if you don't mind sinking in hundreds of thousands that you won't see again as you are staying a very, very long time.

Hmmm, lots of good advice. Wish the OP would read it.

Vaguely Dissatisfied people would do far better to take antidepressants and get out of the house than they would taking up anti home improvement as a hobby. Cheaper too.

I would sell and move on

If you do decide to stay, get rid of the mold. It can cloud your thinking too. Have a professional mold remediation company do it.

You probably know this already: replacing the roof will be a huge savings on your homeowners insurance. In our area (Wellington), the roof component is about 40% of the windstorm premium. The roof replacement will save you big bucks year after year in insurance costs. Your wind mitigation report would need to be updated to reflect the new roof, but it is well worth the $100 wind mitigation inspection fee to save on your insurance costs.

ETA: Hurricane season starts June 1. It is a good idea to get the roof replaced before hurricane season begins if at all possible.

Very interesting, these comments....It is difficult to make a judgment not having a photo.

For example, is it a unique design that would appeal to your target market (even if not to you), ? Is there anything you can do inside involving moving walls that could expand the space to give you the BRs and baths you want?

Last but not least: if you improve, will you be priced out of the neighborhood? Being "in tune" with the neighborhood is a clear consideration for future marketability.

The mold issue is of course a concern but assume you have some abatement estimates. Even if you sell, you would want to be mold-free for inspection.

We are against tear-downs in principle as there is so much waste in that area, and harkens back to the outdated "McMansions" of the early '00s. Large houses today are down-trending as the younger folks want smaller spaces and want to live a more earth-friendly life.

We typically advise clients to (a) move on if they can and market is good, or (b) try to make a silk purse out of the thing.

All best!

As I alluded to above, I think it makes sense IF you love where you live & available lots are very scarce or non- existent in the area & any resale’s aren’t an improvement. That’s true of my area , coastal, very high demand beach property. Tear downs or total gut jobs are the norm. I’m sure that’s the exception in most areas & it just makes sense to move on then.

Which ever way you decide, don't look back.

As a real estate broker, my advice is the same as many above. It really depends on the neighborhood and the availability of other homes in your area that would suit your needs.

One of my clients bought a house for $724,000 in a hot, upscale neighborhood in the Seattle area to tear down. They did this because lots are nonexistent in this neighborhood, and they're building what will be a $2 million house that they couldn't get otherwise. This is pretty common in the Seattle area, where land is scarce, real estate is very expensive and tech jobs pay really well so people have money to burn. For people here, it makes sense to 1) pay extra to buy the lot they want even if they're paying extra to both buy the house on the lot and tear it down and 2) pay extra to rent a place to live while their home is under construction. So, the question to ask - is your neighborhood "hot" enough to justify this expense?

You do NOT want to over improve for your neighborhood. If homes in your neighborhood are generally much more expensive than yours, and the home you want to have isn't available any other way, AND you can afford to pay $$ extra to have a home exactly the way you want, go for it, Otherwise, sell it and find what you want somewhere else.

Two years ago we sold our fairly nice Vancouver home instead of tearing it down. We took the money we made off of it and bought a tear down lot that was bigger and better. We are now mid build and I haven't looked back once. I'm so glad we didn't stay at the other house nor pour anymore money into it.

Sorry for the delayed response. Somehow, I did not receive notifications for all these comments on my post.

Thanks to everyone for the helpful comments. I appreciate it.

Anyway, to clarify a few of the questions asked:

1. According to the realtors, I can easily sell the house for $400k.

2. Mold is no longer an issue. It was removed completely and bathroom fittings/cabinets replaced.

3. I have no mortgage on the house. It is fully paid off.

4. The comparable homes in the neighborhood are selling for $375k-$425k.

5. One new home has just been constructed in my neighborhood recently.

6. The proximity to work and school is a major plus, so I do not want to give that up by living somewhere else.

7. I am open to a remodel at this point. Maybe I can tear down the interior walls and re-design the house? Possibly use the patio for building a room and bathroom as well.

I will attach a schematic showing the layout of the house in the next comment.

Amit, glad you finally got our comments! If the ceiling in your neighborhood is $425K then you might seriously consider selling as is as it will take a lot more to remodel to your taste. Unless you plan to stay awhile....All best,

Thanks again for the valuable inputs.

From the research so far, few things are clear:

1. Teardown will cost anywhere between $20K-$30K.

2. I could possibly remodel the house by adding another bedroom and a full bath. I am thinking that may be accomplished by using the screened-in patio space. (A1 area in the attached floorplan).

3. I do plan to stay put in this house for the forseeable future. My business and kids schools are close by (1 middle school and 1 elementary school).

4. Speaking to the village engineers, I know that I could do an expansion of the house by simply adding footers to the existing foundation.

Sorry if these questions are slightly off topic and tangential:

1. Since I have to replace the roof anyway, is it possible to lift the ceiling/roof a bit? This will (I think/hope) will increase the amount of light entering the areas of the house, making it a bit more brighter. Currently, I have 8ft ceilings.

2. Currently the house has small windows and not big French doors. If I replace them with French doors or sliding doors, that should help with the daylight also?

3. How feasible is it to remove the pool and utilize some of that space for expanding the living space of the house? I understand this will adversely affect the resale value of the house.

Attached is a floorplan.

Well...sounds like you may need an...oh lemme see...architect!

Golly!

Have you considered selecting one and paying a few hour's rate to come to your house and give you some ideas?

I can't make out anything in the floorplans you posted. ditto on remodeling/adding to the house. It's done ALL the time on HGTV! IMO.....pools are nice but are a PITA....and possibly liability. .lots of maint and time that could be used in maintaining landscaping. And ditto on the architect.

We had the same renovate/teardown questions you have for the house we were living in back on 2007.

We ended up tearing it down. Kept the foundation for building setback "grandfathering" purposes and rebuilt on that.

And talk to your accountant. Actually we didn't do a "teardown". We deconstructed the house. Took a few months in lieu of a few days but very little went to the dump. A non profit outfit deconstructed the house and everything was donated to them and we got a substantial tax deduction. I understand the tax laws are a little different now with the new tax laws and all but worth checking out with an accountant, not to mention it's environmentally friendly.

And good luck with your project. Exciting times ahead!

Makes sense to
buy another lot in the neighbourhood
buy another house in the neighboruhood
renovate/ add on to your house

Doesn't often make financial sense to tear down and rebuild.

"Overall, we do not like the house at all"
And in truth that's hardly likely to change, without major changes, ie. tear down and rebuild. That's just the way things are, you either like it or you don't, and minor improvements aren't going to change that.

In which case, I'd rule out a reno.

So that leaves: buy another plot or house.