By Marilyn Kennedy Melia
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Another sign that the housing market is getting on its feet: more homes are coming down.
Nearly eight percent of single-family homes constructed in 2015 involved the tear-down of an existing house on the lot. In areas with older homes the percent is much higher, according to estimates from the National Association of Home Builders.
A substantial number of buyers appear not only qualified to purchase homes but also to fund the tear-down of the existing structure and rebuilding to suit their taste.
If you’re selling a home that may be torn down, how far should you go in prepping the place by painting, de-cluttering and even making repairs?
First, understand the chance that your home will be torn down.
“If your house is over 40 years old, not remodeled or if new houses around you are selling for more than double what you paid for your property, there’s a good chance someone may buy your property just for the dirt,” says Zachary Finn, Finn Real Estate Enterprises, Fort Lauderdale.
Sellers of possible teardowns should make practical repairs and basic preparations that allow for a good showing, but they should not do a major overhaul, says Finn.
“Make the place show better and you may raise the perceived value more than you think,” he says.
Indeed, the price buyers are willing to pay can determine whether a house is doomed to demolition.
A rough rule is that if a home can be purchased for one-third of the price the newly constructed house on the lot will sell for, the teardown math works, says Suzanne Lanyi Charles, assistant professor at Cornell who has studied teardowns. If the school system for the neighborhood ranks high, teardown chances increase steeply, she notes.
Especially when a home is a borderline teardown, “You want to make it look as good as possible so that buyers who will be moving in are competing with those who want just the land,” says Finn.
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