Buyer won’t tear down the entire house. One wall will remain in order to keep the property tax based on the original sales price.
CORRECT
When you add to a house in CA, the property tax base is increased by whatever amount the improvement adds to the value of the property. The only way to keep the tax base the same is to build the new house exactly the same as the original (while updating to meet code). I've seen this happen around me with several homes that burned down. They were rebuilt exactly as before, but still left 1 wall standing (pretty much just the fireplace). The other reason people leave a wall standing is for permitting. Leaving a wall standing allows a repair/upgrade permit instead of the more complex and expensive "new construction" permit. Some neighborhoods (there are some around me in La Jolla) don't allow new construction permits, so all builds have to leave at least 1 wall standing, even though they are essentially building a much larger house.