Building a New Home on a Teardown Lot – First Steps

Buidling a new home on a teardown lot


Table of Contents

Building a new home with a teardown on the lot has been popular for many years now. What seemed to be a risk when it first began is standard practice now.

Why build on a teardown lot?

The problem home buyers have is that many of the desired communities are fully developed with older, smaller, outdated homes.

These communities have desirable features, such as, low crime, good schools, large lots, stores within walking distance, local activities, and entertainment. People want to live there, but they don’t want the houses.

One option is to purchase a house, put an addition on, and upgrade it. But usually this is impractical because of the time, effort, and money that goes into a massive rehab.

So, if someone really wants to live in a home there, the only feasible option is buy a teardown property, and do a new home construction on the lot.

The two important parts to building a new home in a teardown area are finding the right builder and lot. Let’s look at each of these.

The importance of finding the “right” builder with a teardown home build

The builder can make the difference between a good experience and a bad one. Finding the right builder is about finding the best builder for your teardown and new home build.

The Best Builder is Invaluable

A valuable builder could be involved in every aspect of the build, because they typically have resources beyond what their job entails. So, for you to tap into those, it’s just a matter of asking him.

The best builder is experienced in doing a teardown with a new home build and with the local requirements, codes, and ordinances. Teardown construction has challenges, but experienced builders can alleviate potential problems.

Therefore, as the owner, it’s important that you find the right builder. To accomplish this, you have to perform your due diligence. So, this means interviewing the builder and prescreening him with the right questions.

If you would like help finding and qualifying a good builder, check out our guide How to Find, Interview, and Vet a Home Builder.

Finding a Lot for Building a New Home with a Teardown – The Challenge

Finding the right lot is not always easy in a teardown area. Some of the challenges are high demand, availability, and your specific requirements in a lot.

If you are looking in an area that is really hot, the demand is high and in-turn the competition will be fierce.

As far as availability, you are at the mercy of homeowners wanting to sell their home. So, if none are selling at the time, then you don’t have a house to buy, teardown, and build a new one.

Lastly, depending on your specific lot requirements, you may have to wait a while until the right one becomes available.

Write down your lot requirements to determine what you want. Keep in mind things like- size, available utilities, land contour, neighbors, house setback, ordinances, codes, and subdivision covenants.

I have seen homeowners waiting years until finding a lot for their new home. So, teardowns are typically not the fastest builds due to these factors, but they can bring your desired results if you have the patience.

How to Find a House to Tear Down and Build a New Home in Place of It

The builder as a resource

Here’s where a good builder can help you out. Many builders focus their attention only on building in teardown areas and have become adept at finding these houses.

Some may drive around looking for the perfect lots to build on and then contact the owners to see if, or when, they might be willing to sell. Also, they may have real estate agents that pass along potential lots. And they may scour the internet looking for sellers. Sometimes, they even work deals with other teardown builders that have lots available.

What can you do to find a teardown lot?

Start familiarizing yourself with the area that you want to build in by driving around and looking on google maps.

Be on the lookout for the activity of a potential sale, like garage and estate sales, and clean-outs. You can also send a mailer to an area announcing your interest in buying a house there. In addition, talk to real estate agents that specialize in your area. And search the internet for homes for sale in your designated neighborhood.

The more creative you are, and the more effort you put into finding a lot, will produce better results.

Final Thoughts on Building a New Home with a Teardown

Building a custom home on a teardown lot requires patience because of the extra time it takes and hurdles to overcome. Weigh the pros and cons first to see if this type of home build is for you.

Your other options are to find land in undeveloped area or buy direct from a subdivision builder. Each of these have there pros and cons, but if you take time in the beginning to weigh all your options, you will find one that works for you.

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