Historic Homes

Helpful Tips For Working With Historic Properties

Lauren Bowling9 minute-read
January 20, 2022

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There’s a definite romance that comes with a historic property; a feeling of nostalgia for days gone by and simpler times. When it comes to buying and selling historic real estate, however, there are certain nuances that have nothing to do with the tactical realities of buying and selling property and everything to do with a home’s age, history, and the personality of the buyers and sellers.

Because a historic property is a “niche” subset of a location’s real estate market, both the tactics to buy and sell will look a little different than with, say, a newer home in the suburbs.

What Is A Historic Home?

To most, any house of a certain age would be considered “historic,” but in the eyes of the law (and for qualification on any national or local register of historic places) a historic home must typically 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 as, “A national register identifies, a local historic [district] protects.”

Having your home on (or within a neighborhood on) the National Register of Historic Places is an honorary title but places no restrictions on what a homeowner can or cannot do to their property, unless your home is part of a project that receives federal funding or assistance.

Having your home in a neighborhood that is in a local historic district, however, does make it subject to ordinances and laws that preserve the home’s historical integrity, mostly around maintaining what the home looks like so it fits in with the character of the surrounding neighborhood.

A historic home can also be in both a nationally and locally recognized historic district. The two designations often work together to preserve the historical integrity of a location and can be complementary, but not always.

Are Historic Home Transactions Different From Typical Real Estate Transactions?

Historic home transactions are no different from a logistical standpoint than “typical” real estate transactions where a non-historic home is being bought or sold. In a typical transaction, a buyer looks at properties, makes an offer, conducts an inspection and due diligence, a bank underwrites the loan for the property, and then there is closing where ownership passes from one party to another.

The process is exactly the same for a historic property, but there are a few more things to consider due to the age and any potential restrictions on the home because of its historic status.

3 Tips For Working With Buyers Interested In Historic Homes

Most typically, those seeking a historic home are very specific about the reasons why they desire this type of property and they usually come with the appetite that is necessary to maintain a period home. Often, these individuals are history buffs or have a fondness for a bygone era and they want to spend their time as stewards of these historic, architectural gems.

Often, these types of buyers come with a specific style of historic home in mind, but below are tips for working with buyers who desire a historic home - and how to find these gems within a local market.

1. Research Thoroughly: How To Find Historic Homes  

The MLS has a number of ways to narrow your search down to historic homes.

  • You can search by year the home was built, for example 1910-1920
  • You can search for certain keywords of style of home, such as “Victorian” or “Midcentury”
  • If you know certain neighborhoods are prime with historic real estate, you can enter in a neighborhood name as a keyword

Depending on the real estate agent who wrote the house description and uploaded the home into the MLS, this may be enough to find a historic home. Agents should also feel free to look outside a given price range (as many “historic” homes may be priced well below market due to the number of updates needed or well above if they are in a hot area) and look closely at listing photos.

An agent may enter the data incorrectly, but historic homes are often easily spotted by their architectural features from the era when the home was built. If all else fails, it may be worth it to explore local historical societies and reach out to their internal resources or see if any homeowners they know may be looking to sell off the market.

2. Reach Out To Local Historical Designations

Local historical designations are important for potential buyers to be aware of. This is because these designations often come with restrictions on the types of alterations homeowners can make. Alterations to a historically designated home must first typically go through a design review process with the local Historic Preservation Committee before any improvements can be made. Local historic organizations impose these restrictions so that the neighborhoods maintain the characteristics that make them unique, distinct, and of historical significance.

Certain historic designations, however, can be a big boon for homebuyers because of the tax credits and incentives involved. If the home is income producing, up to 20% of rehabilitation expenses can be deducted against federal income taxes. And at least 35 states have their own tax incentives for historic homes. The first step for most of these programs is getting a home placed on the National Register of Historic Places.

3. Be Aware Of Financing Difficulties

While buying a historic home may not make obtaining financing more difficult, buying a historic home isn’t as easy as buying a non-historic one. For FHA buyers, a home must also meet certain livability criteria in order to be eligible for this type of mortgage, which means buying an older home in need of a lot of work may prevent an FHA buyer from buying, or that they’ll need to come out of pocket to ensure repairs are made prior to taking occupancy of the home.

Depending on the age of the house and the type of work involved, this may make historic homes a no-go for certain buyers.

An FHA 203(k) renovation loan product can help first-time buyers roll renovation costs into the mortgage and make necessary repairs to a historic home, but depending on their budget, this may not work for all buyers.

6 Tips For Working With Historic Home Sellers

Due to the age of the home, there are a couple of extra steps listing agents for historic homes should take in order to ensure a smooth transaction for their sellers.

1. Get To Know The Home 

Spoiler alert: buyers who want a historic home want them because they LOVE history. It’s the history of the home – who lived there, what happened there, what period details are throughout – that makes these historic buyers fall in love. Historic owners adore being able to pass on the folklore of a home to visitors and guests and are buying into the historical prominence of the property as much as they are the way the house looks, feels, and functions for their family.

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 and if/when any major systems such as HVAC, electrical, and plumbing were replaced so you can inform any potential buyers of what they may or may not need to replace in the near future.

2. Finding Comps Can Be More Difficult 

A historic home cannot be comparably priced to a modern home - even if it has the same square footage and number of bedrooms and bathrooms as a modern home. There’s just too many small tweaks and quirks involved. According to data from REALTOR®.com, historic homes often sell for 5.6 % more than their modern counterparts, particularly if it is on the prestigious Register of National Historic Places.

But if the home is in a state of complete disrepair and needs a lot of work and systems replacement, it may need to be priced more aggressively than modern counterparts. Pricing a historic home really comes down to location – if the home is in an already stable area and/or sits on a large lot of land. If there aren’t any similar comps nearby, go by price per square foot of your area, but be prepared for a historic home to stay on the market longer than more traditional counterparts.

3. Get A Seller’s Inspection 

Given the age of a historic home, it is always a good idea to do a seller’s inspection prior to the listing going live on the local MLS. This will give your sellers a head’s up on areas that need to be updated or come in line with code to meet a potential buyer’s financing. It may also validate how to properly price the home if a substantial amount of expensive work is needed in the near future, or at least be a way to guide negotiations when an interested buyer comes along.

4. Know What To Update 

Historic homes are full of charm and special details most modern homes severely lack. With that said, a historic home still has to function for modern life – and modern buyers. 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.

With a more traditional home, buyers like to see more cosmetic repairs done. With an older, historic home, even replacing plumbing or electrical or insulating an attic or crawl space can help incentivize a buyer into making an offer.

Consider An Easement

Did your seller pour their heart and soul into meticulously restoring and/or renovating the home to preserve its original character? If so, advising them to consider an easement may make it easier for a seller to “let go” of a well-loved home.

A historic preservation easement is a restriction on the property that would prevent any type of renovation that would destroy the historical character of the home. The owner creates the easement with a local historic preservation group (who enforces it), and the easement is then recorded on the deed - which means it passes with the property and not the owner and lasts, basically forever

For sellers, an easement is a way to “protect” the character of the home and may make it easier for a buyer to qualify for historic property tax incentives. Reminder: as an agent you’ll need to disclose the easement to any serious buyers upfront as an easement is a restriction on what an owner can and cannot do to property they legally own. This may be a “no go” for certain buyers, but isn’t uncommon with historic properties.

5. Stage For Modern Buyers 

All too often, historic homes are full of period specific furniture, but just because a buyer is interested in owning a historic home, doesn’t mean they want their home to look like a museum. Period furnishings may also emphasize the age of the home and turn off otherwise interested buyers.

If the home is heavy on antique furniture pieces, it’s best to stage with more modern furnishings to both broaden the appeal and help buyers envision that a modern family can, in fact, live in a much older home.

6. Market In Unusual Places 

In real estate, so many buyers think, “Well, it only takes one!” or, “I only need one offer!” and while this is true, much of buying and selling houses comes down to marketing to the largest amount of people possible.

This rule in real estate is true except when it comes to a historical home. Given the age of a historical home, the lack of modern amenities or trendy floor plans, and the care involved in maintaining one over time, historical home sellers really 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 historic home in a few non-traditional places, such as a local historical society or websites that cater specifically to highlighting older homes. An article on the history of the home in a local paper may entice area residents who have always admired the home, but may not be in the immediate market or frequently browsing the MLS. 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 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.

Lauren Bowling

The Rocket Homes blog is here to bring you all you need to know about buying, selling and making the most of your home. Whether you’re thinking about becoming a homeowner, selling your current home or looking to keep your place in tip-top shape, our writers and freelancers bring their experience and expertise to meet you right where you are.