You hear stories like this all the time. Some demolition crew tears down the wrong house, someone mistakenly buys the wrong property, and in this case it looks like their new house was demolished after a tax auction. Regarding the details, I don't really care. I just love this picture. He has the most beaten down look on his face in the history of ever. She has a subtle I'm-Dating-An-Idiot look.
Heck, that $500 is worth the story to tell your friends. (And it kind of ruins the story to read that the $500 was refunded. Maybe he's just a beaten down guy in general.)