Selling A Tear Down House (Quick Guide)

Have a teardown house, and wondering what the next steps are?

Selling a house that will be demolished is a bit different than a traditional home sale.

But don’t worry. In this quick but complete guide, I’ll go over everything you need to know about selling a tear down house.

Determine If Your House Is A Teardown

How do you know if your house qualifies as a teardown? You'll need to look at two main things.


First up, the location and how desirable the neighborhood is. 

Are you in an area where people are just dying to live? Maybe it's got great schools, low crime rates, or a convenient location that makes it super appealing. 

If so, chances are builders and developers are keeping a close eye on that neighborhood for potential teardown opportunities.

Also Read: can i build a house and sell it straight away

The second factor is the actual condition of your house itself. 

And I'm not just talking about a little wear and tear or an outdated kitchen. I mean major structural issues or cosmetic problems that would cost a fortune to fix up properly. 

Maybe the floors are sagging, or there's significant water damage or mold issues.

If this is the case, it might not even be worth sinking a ton of money into renovations. A teardown could be the way to go.

Get An Appraisal

When it comes to teardown properties, the house itself doesn't really factor into the value all that much. It's really all about the land!

The location, the lot size, the zoning regulations in that area, and how hot the neighborhood is – those are the things that'll determine how much your teardown property is worth.

Let's say you live in a super desirable area where new construction is in high demand.

Well, even if your house is a total dump, that land could be worth a pretty penny to a builder or developer looking to knock it down and build something new.

That's why it's so important to get a professional appraisal done.

They'll be able to accurately assess the land value, which is what potential buyers will be focused on when they're crunching the numbers.

Also Read: How Much Can I Sell My House For?

Finding The Right Buyers

Selling a teardown house isn't like selling to your average homebuyer.

You're dealing with a specific group of people who are interested in that property for one reason: the land.

These buyers are typically builders and developers who are constantly on the hunt for prime teardown opportunities in hot neighborhoods.

They've got their eye on areas where new homes will be in high demand.

You've also got investors who are looking to redevelop the property and flip it for a profit.

Maybe they'll build a new house and sell it, or perhaps they'll construct a multi-unit building or something along those lines.

And then there are the owner-builders - homeowners who want to build their dream home from the ground up, and they're willing to buy an existing house just for the land to make that happen.

Selling The Teardown House

You've got two main options: listing it with a real estate agent or selling it to a cash buyer.

Listing In The Open Market

Your first step should be to hire an agent who's experienced with selling teardowns.

They'll know how to market your property to attract developers and investors, and will handle the whole process, from finding buyers to negotiating the best price for you.

Plus, they also know the ins and outs of selling teardowns, so you won't have to worry about any surprises.

Selling To A Cash Buyer

Cash buyers can close the deal quickly, which means you get your money faster. This can be a good option if you need to sell the house in a hurry.

Before you choose a cash buyer, be sure to check them out online.

Make sure they're a reputable company and that they're offering you a fair price.

Negotiating And Closing the Sale

If you are selling on the open market, pricing is going to be a crucial factor.

You need to be realistic and competitive based on the land value, not the value of the existing house sitting on that land.

Also Read: selling home at a loss

Buyers will be looking for a deal that makes financial sense for their redevelopment plans.

One big pro of selling a teardown is the possibility of getting cash offers and a relatively smooth closing process since you are dealing with investors or professional builders.

Alternatives To Selling As A Teardown

Selling the house as a teardown isn't the only option on the table.

Just keep in mind that these might not be the most practical or profitable, especially if your house is in really rough shape or the land value far exceeds the value of the existing structure.


But it's always worth exploring all your options before making a final decision.

Rebuild / Renovate And Sell

If your home is structurally sound and in a desirable location, it might be worth considering a renovation or even a full rebuild. 

Depending on the scope of work needed, you could increase the value of your property SIGNIFICANTLY and it can be sold to a much wider range of buyers.

Example - A teardown house in Seattle was sold for $427,000.

And guess what? The builder rebuilt the house and sold it for $1 million!

Donate The House

If you're feeling philanthropic, donate your property to an organization like Habitat for Humanity. 

These non-profits specialize in renovating homes and providing affordable housing options for families in need. It's a great way to give back to your community if selling isn't your main priority.

Plus, you get an advantage too - you can claim a tax deduction for the fair market value (FMV) of the donated property.

This means you can reduce your taxable income by the amount of the donation.

So it will lower your overall tax bill!