The Hill County Sheriff's Office said there weren't many options -- it was too risky to move heavy equipment in to demolish the 4,000-square-foot home in any other way.
A demolition crew set the blaze just before noon and the flames quickly shot through the roof.
It's gut-wrenching for homeowner Robert Webb, who is currently living in another home in Florida. Friends said he poured his retirement money into the $800,000 home.
According to the Associated Press, geologists and inspectors all told him the property was perfectly stable when he bought it in 2012. But he and his family started noticing foundation problems in February. They moved out a few weeks ago.
The home is insured, but the plan didn't cover earth movement.
The homeowner is also now responsible for the cost of the demolition and cleanup, including cleaning up any debris that falls into the lake.
"What a tragic scene that's playing out here, slowly playing out for us," said Chief Deputy Mark Wilson with the Hill County Sheriff's Office. "I did talk to the son a couple of days ago. You're right. They're just heartbroken because it was a beautiful home, beautiful location and nobody ever expected anything like this to happen."
And the sheriff's office fears it could happen again as the limestone cliff continues to erode, as there are other nearby homes that could be affected by the same fault line.
Neighbors were told to stay away during Friday morning's controlled burn.
The burn started about an hour and a half later than originally planned, after several hours of prep work.
Safety meant creating a security perimeter around the house in case the teetering house tumbled into the water, and a fire crew was on standby to make sure the flames don't spread.
Once work got underway, contractors perched in a basket crane and armed with sledgehammers busted out windows. They poured gas inside and broke up walls so that the fire would spread faster.
Crews spread bales of hay doused with fuel inside the garage of the home, and some of it was stuffed in the walls and alongside the house.