In my area if you have asbestos in the house you need a contractor who is qualified to remove it properly. It's not cheap to do and can add to the tear down price considerably.

I wouldn't advise an inspection, I've bought several tear-downs. Oil tanks are not a concern for me, nor is asbestos.
A normal inspection isn't going to tell you much of what you are going to deal with for a tear-down. If you have a contractor, ask the contractor walk through it, looking for any extra expense.

Have you researched all the current zoning regulations. In some towns setbacks have increased or limitations have been put on new build square footage based on lot size. Make sure you can build the type of house you want on that lot.

Michael, We just purchased a teardown in the Chicago 'burbs. We didn't have an inspection. If I were to do it over, I might get an asbestos inspection and a quote on abatement. Cook County requires an environmental inspection (asbestos) and abatement prior to demolition anyway. Our quotes for asbestos inspection came in between $200 - $250 plus $13-$25 per sample (about a dozen samples were taken) (all in all, somewhat comperable to the price of a home inspection). Abatement, however, can be a lot more expensive (ours would have been $5K, except DH did some of the work himself, and a pro will do the rest). Knowing what that abatement will cost is really what will help you decide if you are making the right deal or not. Even after paying for abatement, we got a good deal, but your numbers may vary.

I agree with booksand pages about the Cook County demo requirements. When we removed our old garage, we had asbestos and lead inspections done.

If you ever plan to have a vegetable garden on that land, you're going to want to seriously think about full blown soil remediation....

Skipping an inspection for an underground oil tank to see if it is present and leaking is foolish at best...because IF it has leaked, once the oil migrates, the clean up cost can be in the thousands. The further it has migrated, the higher the clean up cost, into the tens of thousands. If it hasn't leaked, knowing it is there allows yo to have it properly decommissioned before it leaks.

As far as asbestos is concerned, chances are high that that your municipality or state has rules about asbestos removal and ..which as it is considered hazardous waste removal can have the potential to significantly add to your costs.

Penny wise and pond foolish to not have inspections done for both issues.

Make sure you can build what you want under any zoning in effect.

While a remodel usually escapes changes in zoning rules, a complete tear down often does not.

Some places have done things like re-zone to lower density.
This prevents tear downs since the lot cannot be built again at the present zoning density.
You would need two lots to build one house from scratch under the present zoning.

in my area, brickeye is right in that tear downs have different rules....

Some actually do not tear down, they will leave some/all framing, raise the house, and pour new foundation. This is tricky but often can expedite the permitting process.

When you get a permit, a remodel (even the near tear down is considered a remodel) is "subject to field inspection" where as a new house has to have all drawings and documentation provided before the start of construction.

I would contact an architect/contractor that knows the zoning for the area well.

Where we live, the cheapest way to tear down is to donate the house for fire department to practice. They light the house on fire and actually let it burn down while the fire department practices. This saves you the cost of "tearing it down" and getting rid of the toxic stuff. The fire department has the carte blance to "light" the toxic stuff; asbestos, lead paint etc. When they are done, you bging in a bulldozer!

You should check with your local fire department.

My city has exceptions for single family homes. While the city requires asbestos and mold abatement for commercial tear downs, no such rules exist for single family residential structures.

I had a demolition contractor tear down my 1700 sf house built in the mid 1960s for $3000 total. Permit was issued on the spot and the house was completely gone without a trace the next day.

A home inspection before buying a residential property is advise I give for every home buyer regardless of the plan for using the property. And, the buyer is always the only making the decision...not the seller, realtor, or anyone else.

Here is a link that might be useful: TN Homes And Property

Check with your local building department first. Tell them what you plan to do--tear down and build? or whatever.
They can also pull any permits on what was built and what was added etc. --unless it is really old.