Expert: liznarr - 6/16/2011

Question
I would like to purchase a home and lot next to our home. I will not be living in the purchased home nor will anyone else. I am planning on tearing, or burning the home down in the near future but not right away. I am wondering a few things.

1. The land and house are going for fairly cheap. What kind of closing costs can I expect? Could we do a quit claim deed, or a warranty deed, since I am in the state of Iowa?

2.Since the house will be demolished and no one will live in it do we need to get a home inspection?

3.What kind of Insurance should I carry on the house and land since no one is living there, but we want to be protected from accidental injury?

Thank you.

Answer
Hi Cassandra,

Not knowing what type and amount of a loan you will be applying for, and also what typical closing costs are in your area, a local lender in your area will be able to give you accurate information on what you should expect to pay for closing costs.

A warranty deed will afford you more protection than a quit claim deed, but as long as a title company will insure the property with no exceptions, you should be fine either way.  Check with either an attorney or title company in Iowa, depending on how closings there are normally conducted.

If you are sure you will be demolishing the house, I would see no reason to pay for a home inspection.

Before demolishing this structure, you will want to check with local zoning authorities to see if a permit is required.  And for any company that you hire to demolish, make sure they are licensed and bonded and that they carry liability insurance in the event anyone should be injured on your property during the demolition process (this would be OVER and ABOVE any liability coverage you put in force on the property after a purchase).

Contact your current homeowner insurance agent and get a quote to include the property you will be purchasing to add liability coverage.  I assume the structure is not in very good condition since you are planning to demolish it; but if the structure has already been condemned, you will need to let your insurance agent know this.

Good luck to you, and feel free to write again if you have additional questions.

Regards,
Elizabeth