Helpful Tips for Working With Historic Properties
Content sponsor Rocket Mortgage lays out the top priorities for buyers and sellers of properties with a past.
March 7, 2022
When it comes to buying and selling historic homes, there are certain nuances that have nothing to do with the tactical realities of a real estate transaction and everything to do with a home’s age, history, and the personality of the buyers and sellers. Because historic properties are a “niche” subset of the real estate market, both the tactics to buy and sell will look a little different than with a newer home in the suburbs.
What Is a Historic Home?
A historic property typically must meet the following criteria:
- Be associated with a significant historical event.
- Be associated with the life of a significant historical figure.
- Embody characteristics of a type of home, period style, or method of construction.
What Is a Historic District?
There are two different types of historic districts: national and local. The Historic Preservation Division of the Georgia Department of Natural Resources sums up this distinction: A national register identifies historic properties, and a local historic district protects those properties.
Are Transactions for Historic Homes Different Than Typical Real Estate Deals?
The process of buying or selling historic homes is no different than that of a non-historic home. But due to the age of the home and any potential building restrictions because of its historic status, there are a few more things to consider.
3 Tips for Working With Buyers Interest in Historic Homes
Research how to find historic homes. The MLS has a number of ways to narrow your search for historic homes.
- You can search by year the home was built. For example: 1910-1920.
- You can search for certain keywords related to the style of the home, such as Victorian or midcentury.
- If you know certain neighborhoods are prime for historic real estate, you can enter in a neighborhood name as a keyword.
Reach out to local historical designations. These designations often come with restrictions on the types of alterations homeowners can make to a historic home. Certain historic designations, however, can be a big boon for home buyers because of the tax credits and incentives involved. If the home is an income-producing property, up to 20% of rehabilitation expenses can be deducted against federal income taxes. At least 35 states have their own tax incentives for historic homes.
Be aware of financing difficulties. Buying a historic home isn’t always as easy as buying a non-historic one. For FHA buyers, a home must meet certain livability criteria in order to be eligible for this type of mortgage. Depending on the age of the house and the type of work needed, this may make historic homes a no-go for FHA buyers.
3 Tips for Working With Historic-Home Sellers
Get to know the home. Buyers interested in historic homes want one because they love history. It’s details like who lived there, what happened there, what period details are throughout the home that make these buyers fall in love. In addition to the legends of the home, it is important to also get to know the home’s renovation history, such as the date of the last substantial kitchen and bathroom remodel or whether any major systems, such as HVAC, were replaced. This can help sellers inform any potential buyers of what they may or may not need to replace in the near future.
Know what to update. Historic homes are full of charm and have special details most modern homes lack. When helping a seller navigate prelisting repairs and renovations, it is important to preserve details that point to the historic period of the home and focus instead on high-use areas like the kitchen and bathroom.
Market in unusual places. Given the age of a historic home and the care involved in maintaining one over time, sellers are looking for that one person who is going to fall in love with the history of a home. This is why it may also make sense to market the home in a few nontraditional places, such as a local historical society or websites that cater specifically to older homes. Telling the home’s story on social media can also go a long way to catching a buyer’s eye.
The bottom line: The age of a historic home means both buyers and sellers will need to do extra due diligence and prep work in order to facilitate a seamless real estate transaction. But for those willing to put in the time, care, and attention to detail a historic home requires, the sense of history and architectural charm will make purchasing an older home well worth the journey.
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