Tear-Down Condition

Tear-down condition refers to a home that needs a complete refurbishment and rebuild inside. Tear-down condition homes are sometimes ideal for an investment. Many investors purchase tear-down condition homes for a low price and with the understanding that they will contribute personal funds to rebuild the interior of the home. After the investor finishes the rebuild, the home is usually in perfect condition and receives many offers. However, a tear-down condition home may not be ideal for a buyer who needs a move-in ready property because extensive repairs will be necessary. Buyers have an abundance of negotiation power when it comes to such homes. Typically, the seller simply wants to relinquish responsibility of the home and is open to reasonable offers. Some home loan programs allow additional funds to be added to the loan for rebuilding a home.