1. You must acknowledge that teardowns are good for Dallas. See this article, where we don’t even mention the energy savings new homes can bring.
2. You must search for the Next Big Thing. Preston Hollow, Oak Lawn, M Streets, Park Cities—everyone knows they’re hot for renovation and teardowns. But that also means competition is fierce. What’s the next hot area? We’re sworn to secrecy. But here’s a hint: look up Guildhall Drive and McCree Road on Google Maps. Then drive there. Then buy there.
3. You must take advantage of overbuilt inventory. Centex and other new-home builders are stuck with a lot of houses right now. They’re offering deals if you close quickly, providing free amenities or services, anything to get you to close. Buyer’s market, baby.
4. You must avoid neighborhood divorce proceedings. The neighborhood stabilization overlay sounds like a great idea, as it’s designed to keep developers from running amok and building huge, ugly homes in your neighborhood. In practice, as Stonewall Terrace residents found out, it can be a divisive issue in which one side tells the other you must abide by what we consider to be good taste.
5. You must hire a photographer. More than 70 percent of homebuyers begin their search on the Internet. This means if you want to make the cut, don’t let your real estate agent put up dark, ugly photos of your kitchen on Ebby.com. Hire someone who understands how to light a bedroom photo properly. It’s worth it.
6. You must wait for your parents to die. The big question everyone asks about the teardown trend is, How can so many people afford this many expensive new homes? One reason is the Boomer generation is passing its wealth to its children and grandchildren. So if you have your eye on doubling your square footage, perhaps you just need to be patient and let the circle of life help you finance.
7. You must blame and/or ignore the media. Stories abound about how much slower the 2006 home market was in Dallas than 2005. That ignores that 2005 was a record year. The Dallas home-sales market is still projected to grow 4 percent this year, so don’t get scared just because we’ve slowed down from 110 miles per hour. We’re still doin’ 90.
8. You must explore the 2 percent option. If you feel your house is a good teardown candidate, you can have teardowns.com offer it to several developers and pay them only 2 percent of the sales price. If it’s not a good teardown candidate, they’ll tell you so and refer you to folks who can help you sell it to homebuyers.
9. You must stay informed. Real estate agents are no longer necessarily the best source for evaluating the current state of the market. Often they’re so specialized that they only know what homes are going for in a very small geographical area. Spend time looking online at houses for sale in your neighborhood and compare them to similar homes in nearby ZIP Codes and in the suburbs. Asking prices can fluctuate thousands of dollars monthly, and you’ll want to keep up with them so you don’t find out too late that you’re on the losing edge of the real-estate wave.