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Ask Adam: Tear Down and Rebuild

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This regularly-scheduled sponsored Q&A column is written by Adam Gallegos, Arlington-based real estate broker, voted one of Arlington Magazine’s Best Realtors of 2013 & 2014. Please submit your questions via email.

Q. I’m interested in understanding the basics around how a “tear down and rebuild” scenario works in Arlington. For example, how much does it generally cost, what makes up those costs, and how would the financing work? I’d be interested in exploring this option but am intimidated by what I’m assuming would be a very pricey endeavor. Can you give me a primer and refer me to an online resource for some basics?

A. Your question about cost is difficult to answer from a general perspective as they can vary wildly. The major costs you need to budget for are:

  • Land
  • Site costs
  • Architecture
  • Construction

There are not many lots sitting vacant in the Arlington area, so you are likely looking for a tear down. I recommend working with an agent who specializes in land acquisition. They should be able to help you navigate zoning and setback designations as you are exploring different options. For example, if the house you want to build requires a footprint that is 40 feet wide, you need to make sure the lot is wide enough to accommodate the width of the house and the setback requirements for that particular location.

Site costs usually include such expenses as demolition, utility connection and permitting fees.  These fees may not be included in the construction quotes provided by builders you are talking to. They can easily exceed $25,000 so be sure you are financially prepared.

Architectural costs are going to vary based on the amount of customization you are looking for. Builders usually have models that they can easily tweak for your lot with minimal architecture costs, but the sky’s the limit as far as the amount of customization you can explore. The more you customize, the more expensive these costs will be.

Construction is usually quoted on a cost-per-square-foot basis. I’ve seen these range from $75 to more than $300 per square foot. That number is going to vary by builder. It’s also going to vary based on the size of your home. Because there are a numerous fixed costs in building a home, the cost per square foot tends to be less for larger homes than smaller ones. Another major factor is the level of finishes. Wolf appliances, rare granite and exotic hardwood floors are going to come with an appropriate price tag.

Financing has become a lot friendlier for construction loans.  I’ve seen options that require as little as 10 percent down. They usually offer one loan that can be used for the acquisition of the land (or tear down) and construction costs. You usually start off with an interest only loan based on the amount of money you have drawn against for land acquisition and construction. Then you will convert to non-construction loan when the home is complete.

I’m not familiar with any online resource that would be helpful. In fact, I have often thought about creating a helpful website myself. Maybe one day. In the meantime, I’m happy to connect you with a lender who is knowledgeable about construction loans and some of the best builders in town.

Thank you for this week’s question. Please keep them coming to [email protected]. This is also a great place to reach me for anyone looking to buy or sell a home in the Arlington area.

The views and opinions expressed in the column are those of the author and do not necessarily reflect the views of

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