1. Old houses are money pits. It is considerably cheaper & faster to tear down and rebuild, than rehab an existing structure.
2. She owned this house with a guy who was a lying/cheater.
It probably was a cleansing experience. If you ever go through a nasty divorce you want to get rid of anything that reminds you of your previous spouse. We have all seen ads of wives seliing their exes sports car, etc.
If I was her I would pay extra to drive the bulldozer/wrecking crane myself.
3. Money is no concern. Think JP Morgan: “If you have to ask , you can’t afford it.”
She bought this property after the divorce. I wish Freepers would actually read the story before commenting.
I was a contractor for thirty years. I can't tell you the number of times homeowners, after watching This Old House started a renovation project when tearing down and starting over would have been less costly. But that's not what we are talking about here. This house, while older, still looks like it had some value, some tread on the tire. She discarded that value to start anew. Now, this location may be special. It may be unique. I am sure that the new place will be wonderful, but if she could have found a piece of property with no existing structure, she could have still allocated some of her wealth to creating a new home without eliminating an existing home that still had value. This lost value comes out of her pocket. To me, it's like the 'broken window fallacy'.
As to the Pinto/Mercedes analogy, sure the Mercedes has more value, but if you had the Pinto and wanted a Mercedes, would you sell or trade in the Pinto to get whatever value you could for it, or would you scrap it and then just buy the Mercedes.(probably a bad example because the scrap value just might be higher than the resale value of a '74 Pinto)