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<< Previous   of   Next >>   ADVERTISEMENT   CONTACT THE HERALD Mike Benbow, Business Editor benbow@heraldnet.com   Published: Sunday, October 25, 2009 The better plan: Tear house down, start anew By Steve Tytler Question: After getting an architect to draw up remodeling plans and talking to builders, I’ve come to the conclusion that we’d be better off to tear down our house and start over. One problem is convincing my husband that I haven’t lost my marbles. He thinks it’s a huge waste. He also thinks we’ve invested too much money in the architect to stop now. I say this is a cheap place to stop. The architect can incorporate many of the details and drawings into the new home. The other problem is cost. For $250,000 I can get a jazzy remodel on part of a 37-year-old house. Or, for the same $250,000 I can get a wonderful house, with no sagging corners, no wiring woes, great plumbing and energy efficiency. We have a great lot on a stream with lots of trees. We have one of the cheaper homes in a lovely neighborhood of $500,000-plus houses. Is this cost-effective? How does the bank handle this? Answer: I agree with you. On a dollar-per-square-foot basis, remodeling is usually much more expensive than new construction. Here’s why: When a builder constructs a house from the ground up, every step of the building process is coordinated for maximum efficiency. First, the walls are framed, then the plumbing and wiring is installed, then the wall studs are covered with wallboard, etc. On the other hand, when a builder undertakes a remodeling project, he is forced to work within an existing structure. Portions of walls must be torn out, then rebuilt. Work crews must work in cramped quarters. Defects in the existing home (such as sagging corners) may force the builder to make compromises to seamlessly connect the old and new portions of the house together. Worst of all, there are almost always unpleasant surprises when you start peeling away the skin of an older home, such as dry rot in the walls and floors. All of these headaches cause remodeling contractors to charge more for their services than they would for new construction. The extra cost is justified by the problems mentioned above, but be aware that some remodeling contractors drastically overcharge for these complications, so always shop around before signing a remodeling contract. You may save as much as 25 to 30 percent of the total project cost. The bottom line is, remodeling is almost always more expensive than new construction. Therefore, you are wise to clear the decks by tearing down your existing home and allowing the builder to start from scratch. Yes, you will have to spend additional money on architect’s fees, and the total budget may exceed your original plans, but the final result will most likely be vastly superior to a partial remodel in terms of bang for the buck. Just be sure to check with your local building department to make sure that a total tear-down is legally allowed on your lot. In some cases, you may have to leave at least one of the existing walls standing in order to technically qualify as a remodel. As for financing the project, you will have to obtain a new-construction loan rather than a home equity loan or refinance if you elect to do a tear down. You should get an all-in-one loan that would cover the construction phase of the project and then convert to a permanent mortgage when the construction is completed. This saves you the double closing costs that you would have to pay if you got a construction loan and then a permanent mortgage after the construction is finished. One final note: You mentioned that you have a stream running through your property. You might run into a sensitive-areas zoning violation if you tear down your existing house and build too close to the stream. Again, contact your local building department to make sure that your building or remodeling plans won’t violate any zoning rules or regulations. Mail your real estate questions to Steve Tytler, The Herald, P.O. Box, Everett, WA 98206, or e-mail him at economy@heraldnet.com. READER COMMENTS Log in or register to post new comment | Log out Tear-Down vs Remodel There are a couple items that could use fleshing out here: An item that wasn't mentioned in Steve's article was drainage. In a complete tear-down, all of your impervious surfaces (roof, decks, driveways, etc.) will have to be incorporated into a drainage design that handles the runoff from your new construction. Depending on the scope of your project, this often involves the installation of catch basins, detention/infiltration systems, soil amendments, or various hybrid drainage systems. This can add several tens of thousands of dollars to the cost of new construction, even for a modest new home, to say nothing of the expense of hiring a licensed civil and geotechnical engineer to design it. Older homes and their existing systems (which is often no system at all) are grandfathered under the regulations in which they were originally built, and remodels that do not add to the existing surface area are generally exempt from the new requirements. Steve is correct in pointing out the potential problems in building close to a stream, however it is your local planning department, not the building department, that has jurisdiction over this. That being said, if your existing home is built too close to a stream than existing regulations allow, if you build your new home *within* the existing footprint of the old house, you often can build just as close to the stream as the original house. Make sure the architect understands this. There will probably be a licensed surveyor mapping out your lot regardless. Ed Sibrel | Oct 25, 2009 9:43 am | 0 replies | View all | Post reply | Request removal

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