Santa wrote:
We wanted to build custom home, I approached a realtor, she says, buy
a old home and dismantle it and construct a new home. This way I can
get it cheaper. The old home costs around $400K, plus the builder cost
for constructing a 4-bed room is around $100K, plus around $30K for
town planning. Does it makes sense?. Thanks in advance.

Cheaper compare to what? If everything else being equal, assuming build
a new house cost you $X then build a new house over an existing one will
cost you $X + $Y. For $Y being the price for the existing house minus
the cost for the land plus demolition of existing house associated cost.

Replacing an existing house only make sense when the location of the new
house is of top priority and you are willing to pay the additional $Y to
get it.

FC