Is it possible to make sure a home buyer doesn't tear it down?
4 months ago
Featured Answer
Sort by:Oldest
Comments (24)
- 4 months agolast modified: 4 months ago
Related Discussions
Tear down my house and rebuild -financing?
Comments (13)Beware of one thing when dealing with a bank and doing a teardown - unless you make it very clear to the bank that you intend to tear the house down, they will end up being very concerned when it starts to come down. We recently had a situation where we bought a house and took out a mortgage for only about 50% of the bank-appraised value. We bought the house because it was a fixer-upper and we wanted to tear it down and rebuild. It was in very bad condition, and everyone else looking at it during the time we were making an offer on it felt the same way...there's no way someone could have lived in the house for long without fixing it up. We even told our mortgage contact at the bank that we were planning to tear it down and rebuild (with our own cash not a construction loan). He seemed supportive and commented many times on what a great lot it was and how nice it would be when the house was "done." So, it was clear to everyone involved that it was planned to be a teardown. Long story short(er!) - we bought the house in Sept, and in January, when we had our completed architectural drawings, structural drawings, had received building permits and were ready to start demolition, one of the final items on my list was to obtain "course of construction" insurance, which takes the place of homeowner's insurance when you are dealing with a construction/teardown project. In the process of signing the insurance documents, I noticed that the insurance company wanted to know if the bank should be listed as an additional payee in the case of a claim. I called the bank to ask if they're typically listed on a course of construction insurance, and after speaking with a few different representatives (none of who knew anything!), I was transferred to the office of the VP of Risk Management (or something like that)...anyway, someone on her staff almost had a fit when they heard that we were about to tear the house down. She kept saying that our house is the "bank's collateral" and not ours to do what we wanted with and that we could not proceed until we had the appropriate bank approvals, etc, etc. Keep in mind that we were not asking for the bank to pay for the construction, we are paying for the construction in cash, and we had an appraisal (done by the bank's OWN appraiser!) that was completed in September which showed the value of the entire property to be $1,100,000; they even broke this down between the lot value (approx $950,000) and the house value (approx $150,000). We have a mortgage for $500,000 so obviously, even in a worst case scenario, if the house was torn down and never rebuilt, the bank has FAR more collateral in the land than they ever had in the rickety old decrepit scary house!! Still, this person INSISTED that she had to go to some sort of approval committee and get approvals before we had a demo truck even enter the property. My husband and I were furious (although also somewhat bemused by this bizarre lack of logic and ridiculousness) and we spoke with several others at the bank who listened to our story and believed us when we told them that we had been very clear with the mortgage person during our loan approval process, telling him all the time that we were buying a "teardown"!! Our point was that, if there were further approvals necessary, he should have told us about them up front. Finally, we had a senior VP reluctantly agree with us but we are still being hounded by this VP of Risk Mgmt who is still insisting that we need to forward her a copy of our contract with our builder, our approved architectural/structural plans and all kinds of other info! At this point, we're ignoring her (because we have the approval of the senior VP), and construction has started, but this has been a big pain and total surprise. I'm telling you this long story because it just illustrates how crazy and upside-down the banks are these days and how their underwriting/loan approval processes have gone wildly from one end of the spectrum (super wide open) to the other (absurdly tight). My husband and I are the perfect clients for them - we have stellar FICO scores, have a longstanding history of repaying all our prior mortgages (two of which were with them), and MOST importantly, the bank has MORE than enough collateral in our current property to cover it all even if we never paid another dime!! So, I'm sorry to say it, but like others have basically said, I would be surprised if you get a construction loan with your current situation, and IF you decided to and could somehow do it on a line of credit or home equity situation, BEWARE that the bank will have a fit if/when they find out that you're tearing your house (otherwise known as the bank's collateral) down. Sorry, I don't mean to be a bummer about all this but it's best to go into it with eyes wide open and know the current lending/housing environment. Whatever you do, best of luck!!...See MoreTear-down, addition, separate house? (complicated)
Comments (10)So, if they want to give you some of the land, fine. They can legally subdivide their land and give you a piece. You then build your house. The only question is if you want to live there -- presuming you can afford to build a house. This is a side issue, but the land can't be legally subdivided. We can only build because their existing house is so small it can be considered an "accessory apartment", even if it remains a free standing structure. And yes, we can afford to build. We're very close to paying off our existing mortgage on our current house. If they want to stay in the existing house, they can hire the repairs made. They don't seem to care if it's 'remodeled'; they just want to be safe. Well here's the thing. Their current house is just a mess. I don't mean dated, I mean that there's tile falling down in the bathroom (shower/tub is unusable), the roof needs to be replaced, wall board is popping out from moisture in the finished basement, the outside shingles need to be replaced, and too many items great and small to be listed. We live very close by. I've offered to set them up with contractors when we've had work done to our house, I've offered to help them with practical legwork involved in hiring contractors, if there was a hint of financial issues, I'd happily jump in and offer financial assistance. They want the magic person who will read their minds and do it all for free falling into their laps. Now a side of me says, "Forget about it!" and let them let their roof fall in if that's what they really want, but they ARE my parents and I do feel some diffidence about that stance. Exploring the ins and outs of us building seems to be a good time to also explore this issue. I think what we are going to do is talk to a few good builders and get some honest assessments about what is and isn't feasible. I'm thinking (hoping) some estimates about what's involved will either get them on board or allow us to figure we're not living there in their lifetime and move on....See MoreSo if our house doesn't sell....
Comments (42)I'd have to reread what I quoted tomorrow about the price. IIRC, The posts were before the market got to this point, so before when she made the posts, she may have been ok with it; but now the price isn't realistic. This is where that great realtor comes in. She should have sat her down and told her that the market changed and we need to act since you need to sell. After all, her bios states she will work with the client to price the home correctly. Having a realtor that claims to have that much experience yada yada; she would be able to talk the seller into going after that buyer; after all, if you read the lowball post, some of the posters were able to change her mind. Why couldn't this experienced great realtor do that? Rereading the posts, Jellyben knew in her heart the price was too much. The realtor technically should have been able to be straight with her saying, ok we can try listing at that "old" price for a few weeks, if we have activity and no bites, then we have to revisit pricing. Our realtor said almost the same thing to us, so we knew going in; plus I read here just like jellyben does, so I know it would have to be done. I do think that the exterior photos make the house look "trumped up" and more like an artist's drawing of spec homes you see at those architectural plan websites. I think it makes the home look unrealistic and could be turning off some buyers. Exactly, which is probably misleading when you actually get to the house. This is a used house, I highly doubt the outside looks that perfect still. Jellyben How long is your contract for?...See MoreHow to approach addition/remodel when layout doesn't make sense?
Comments (30)We are living through a remodel right now. I'm not sure if some would consider finishing a basement a "remodel", but we're basically adding 1,000 sq ft of finished space to our home. It sucks. We have stuff everywhere on the first floor because everything had to be removed from the basement in order for it to be framed out, having new electrical added and adding a full bathroom (including the fun part of having the concrete floor broken and pipes added). It has been nearly 2 months and I cannot wait for it to be done! We have done everything we can to keep the dust and dirt to a minimum throughout the rest of the house but boy, is it tough. I couldn't imagine doing this on the main floor of our home. Everything has cost more than we originally planned. Part of that is that we definitely are part of the "while you're at it" club (but it was for things that made sense, like adding a couple of extra outlets). Everything is taking longer than we were originally told, and we have been lucky and haven't hit a lot of snags. You watch HGTV and see teams of 10-15 people working on a house - that's not reality. We've had days where we've had no workers (which I was told from others that this is normal) and days where they're at our house for like 12 hours. Since we are living here during this, our lives have basically revolved around the contractors because things have come up where we've had to make decisions on the fly (so basically one of us has had to be here). I talked to my husband very seriously about moving before we started this project. He felt it didn't make sense because the interest rate on our current mortgage is much less than interest rates now, plus we couldn't ask as much for our home as competitors just because we didn't have that finished basement. But now that we're going through it, I think he feels he should have given moving much more consideration. And we're not remodeling for more than the cost of our home. If I had a $160,000 house, there is no way I would put another $200,000 into it, especially with what you want to do. Removing a very long load bearing wall is no easy task. I don't even think they make support beams that long - you're going to have support columns in the middle of your open concept (we have them smack dab in the middle of our basement so we had to change where we wanted to put things). We had to remodel our master bath and bedroom due to mold when my kids were little. That was tough enough; I couldn't imaging being without say a kitchen or stairs with little ones. We had to have the water turned off when they were installing the pipes - try explaining to your teenage daughter that she has to shower at her friend's house before going out that night. Everyone keeps telling me all the hassle will be worth it, but I really wish we would have moved instead....See MoreRelated Professionals
Chicago Ridge General Contractors · Clarksville General Contractors · Dallas General Contractors · El Monte General Contractors · Enfield General Contractors · Fitchburg General Contractors · Fort Pierce General Contractors · Great Falls General Contractors · Kyle General Contractors · Port Washington General Contractors · Saginaw General Contractors · Texas City General Contractors · Tuckahoe General Contractors · Waxahachie General Contractors · Queens Interior Designers & Decorators- 4 months ago
- 4 months ago
- 4 months ago
- 4 months ago
- 4 months agolast modified: 4 months ago
- 4 months ago
- 4 months ago
- 4 months ago
- 4 months ago
- 4 months agolast modified: 4 months ago
- 4 months ago
- 4 months ago
- 4 months ago
- 4 months ago
- 4 months ago
- 4 months agolast modified: 4 months ago
- 4 months ago
- 4 months ago
- 4 months agolast modified: 4 months ago
- 4 months ago
- 4 months ago
- 4 months ago
Related Stories

MOST POPULARA First-Time Buyer’s Guide to Home Maintenance
Take care of these tasks to avoid major home hassles, inefficiencies or unsightliness down the road
Full Story
MOVINGMaking a Home Away From Home
Feeling like a stranger in a strange land? These tips can help ease the transition after a big move
Full Story
FLOORS10 Ways to Make the Most of Your Home’s Original Floors
Save yourself the cost of replacing your old floorboards with these tips for a new finish
Full Story
HOUZZ TOURSUpside-Down Plan Brings Light Into a Home’s Living Spaces
An architect raises the roof and adds a third-story addition to an Edwardian house in San Francisco
Full Story
GARDENING GUIDESMake Sure You Read This Before Buying New Plants
Follow these 10 plant-selection tips to avoid buyer’s remorse
Full Story
REMODELING GUIDESWhat to Know Before You Tear Down That Wall
Great Home Projects: Opening up a room? Learn who to hire, what it’ll cost and how long it will take
Full Story
HOW TO PHOTOGRAPH YOUR HOUSEAttract Home Buyers Easily With Great Photography
Show your home's best face in real estate listing photos to have potential buyers knocking down your door
Full Story
GREAT HOME PROJECTSHow to Tear Down That Concrete Patio
Clear the path for plantings or a more modern patio design by demolishing all or part of the concrete in your yard
Full Story
ECLECTIC STYLEHouzz Tour: Eclectic Down-Home Style in Texas
A Texas family goes for comfortable, colorful furnishings and crisp white walls for a look they call ‘Southern Americana’
Full Story
DISASTER PREP & RECOVERYHow to Make Your Home Safe and Dry After Flooding
Follow this expert advice to get your house ready for rebuilding while you consider your options
Full Story
AiFL