It really depends.

How much would the land cost without the house on it?
How much would it cost to bulldoze the house and haul it away.
How much would it cost to build a new house?

Can you afford it if heavy machinery breaks the driveway or drives over the well or the septic and those need major repairs?

There are a lot of things to think about.

We bought an existing house on a acre and did a teardown to the foundation and fireplace, then built a house there. Instant landscaping! A bulldozer can turn a house to rubble in short order. Possibly the majority of the cost would be disposing of the rubble. How far to the dump?

Our landscapers just finished trimming the beautiful mature yew hedges lining our driveway. We have huge arbor vitae lining the side of our lot and screening us from the street. Mature trees include a century elm, locusts, a sycamore. We have an established lawn. The lot is fully fenced. All were "free" with the lot.

How much would the land cost without the house on it?
We're talking to the bank who owns the foreclosure about possibly getting the land for the same price as those sold as empty wooded lots around it, so the cost would be the same either way.

How much would it cost to bulldoze the house and haul it away.
That's what I don't know yet- just trying to figure out if in general it's cheaper to tear down the mess that's there (but save the well and septic, plus cleared site and hopefully driveway) or start with a blank slate of a heavily wooded lot with no utilities, etc.

How much would it cost to build a new house?
Either way, we'll be building a new house- the one that is there was apparently built by a drunken do-it-yourselfer who didn't own a level. Even on the first floor, the kids would always know where to find their trucks and balls as they would easily roll to one corner of the house- even the slab is uneven!

Can you afford it if heavy machinery breaks the driveway or drives over the well or the septic and those need major repairs?
Yes, although that wouldn't be preferred- we may be able to enter the property from a different location to save the driveway for sure!

My buddy tore down a burned house, the insurance company gave him 10k, a dozer takes a house down in short order.

Around here the fire department will do a controlled burn for training purposes, which doesn't cost a thing. Then you would only have to remove the remnants.

Like everyone says, it depends but for us, we came out pretty even, I think. 3 acre Lot had a small, burned-out house on it. We had to pay around $3K to tear it down but saved $5K in school/road impact fees because it was not considered new construction (careful with this because you have to make sure you get a demolition permit to get the credit here in Florida). We saved about $4K because we didn't have to dig a new well but had about a 6 week delay in building waiting for a permit to build a new house that close to an existing well, something to do with the termite treatment needed not poisoning the well water. We needed a new septic because the new house was much bigger. I think you are likely to need a new septic even if the house is the same size because a)it may be old and not pass inspection, especially with what you have found with the house and b)the construction crews will probably drive all over it in the demolition/construction process.

Good luck.

Almost forgot and don't know how much pertains to the OP's property-in-question:

Because we left the foundation and fireplace, our town didn't call this a "demolition", but a "remodeling". (I think they have since re-thought that!) Anyway, we paid no $10K demolition fee to the town. Also, since we were not building more bathrooms than the old house had (3 1/2), we didn't have to run a larger water line or a larger sewer line. The electric was here. The phone line was here. The driveway was here -- we kept the apron.

Hi OP, we just tore our house down March 10th. It took them 1.5 days, including cleanup & dump fees, and that cost us $8500Cdn. I don't have pics on photobucket, but if you want to see what's involved just let me know and I'll post a couple.

We only tore down to the basement foundation as we had lifted the house in 2003 and tore out the old one, piled, and put in a new one. (Should have just tore out the whole dang thing then...but I digress lol).

If you DO decide to tear down, I STRONGLY recommend that you take out the windows yourself. We didn't (couldn't actually cause we were living there right until a couple days before demo) and our yard is COVERED with small pieces of glass that we will now have to pay more for to get cleaned up before re-landscaping.

Also, your yard will be filled with small pieces of wood splinters. To clean this up easily, I just used a rake and it worked splendidly.

As for your driveway? Alot will depend on how strong it was made to begin with. Our front sidewalk surprisingly survived with very little damage considering all the heavy equipment that was on it, but DH had built that thing like Fort Knox lol. It's too bad we had to tear it out anyways, our new entrance has moved so the sidewalk had to go.

Good luck with your decision.