Buyer’s and Seller’s Agents Can Make History With Historic Homes
Do you have clients who would jump at the opportunity to live in F. Scott Fitzgerald’s house? Or perhaps the very first mansion in the state of Utah is more their speed? As it turns out, successfully buying or selling historic properties like these requires a particularly knowledgeable agent — so we’re here to help.
What Constitutes a Historic Property?
While there are plenty of charming older properties on the market (looking at you, shag carpet), only a handful are officially considered historic homes.
The National Register of Historic Places awards the designation of a historic property based on three main criteria:
- Significance: The property may be associated with historic events or developments, which could include housing a prominent figure. It may also provide information about the past through archeological investigation.
- Age: In general, historic properties must be more than 50 years old. The National Register may make an exception if the property is especially significant.
- Integrity: Despite its age, the property must look largely like it did in the past.
So, it’s no surprise that truly historic properties require unique owners, buyers, and agents. Here’s how to go down in history by expertly assisting in the sale or purchase of one of these distinguished properties.
Employ Purposeful Marketing
If you happen to be selling a historic home, you’ll need a strong marketing strategy. Historic homes are often unique in their architecture and level of craftsmanship. Anyone interested in art, tradition, or quality work that stands the test of time may respond well to marketing materials highlighting these features.
You could get some additional coverage if the home has a notable former owner or any especially interesting historical features. If you have a newsworthy listing, consider contacting the press.
For example, actor Robert Mitchum once owned a property marketed on Inman.com. A crack in the exterior was said to be the result of a luxury car race during an A-list house party. Hello, front page!
Find the Right Buyer
Owning an older home isn’t for everyone, much less a historic property.
“There is a responsibility in owning a historically designated home in terms of maintenance and upkeep, and honoring aspects of the house that make it significant,” said Ken Lyon, Associate City Planner and Historic Preservation Officer in Palm Springs, California. Owners should be willing and eager to learn the local history, get to know the community, and preserve the home’s historic charm.
There are also various rules and regulations that historic homeowners must follow. Certain cities and their respective preservation offices limit modifications, or even require any proposed changes to be presented before a board.
Potential buyers who are looking to renovate, call all the shots, or are unwilling to put in the necessary time and energy to preserve the home simply won’t fit the bill. As such, buyer’s and seller’s agents should advise their clients on the necessity of fit.
Encourage a Thorough Home Inspection
Of course, properties that are 50+ years old often come with some quirks.
“With an old house, there is always going to be something, but you just have to know that,” said Ryan Arvay, Historic Properties Coordinator of Historic Savannah Foundation. While squeaky windows may not be a deal breaker, foundational issues could certainly raise some eyebrows.
Agents should encourage or, if your network is especially developed, connect clients with a reputable home inspection service to identify any major issues.
Clients should also keep in mind that, according to the National Trust for Historic Preservation, repair projects in historic homes tend to cost more because skilled craftsmen with experience in plaster, masonry, and other materials may be required. Arvay recommends buyers plan to devote 20% of their budget to unanticipated repairs.
If you’re curious about what projects may pop up for the buyer, check out this video from CenterBeam Construction:
Study Up on Financial Incentives
There are some serious benefits to owning a historic home that you’ll certainly want to share with clients. For example, historic homeowners can take advantage of low interest home improvement loans. Plus, according to a 2018 report by the Historic State Tax Credits from the National Trust for Historic Preservation, a whopping 35 states have tax incentive programs related to the restoration of historic homes. The number of states with tax incentive programs has since jumped to 39, and the federal Historic Rehabilitation Tax Credit (HTC) also credits 20% of qualifying historical project costs.
Each state’s rules and regulations will vary, but clients should have the full financial picture before committing to a historic property.
Encourage Buyers to Speak With Their Mortgage Lender
If you’re representing the buyer, you’ll want to get clear on financing sooner rather than later. When it comes to historic properties, and many older homes in general, some lenders may require supplementary guarantees before awarding a loan. Recipients of the FHA or VA loan should also ensure that the home meets the necessary criteria, as considerable necessary repairs could disqualify them from financing.
History in the Making
The purchase and sale of historic homes require a unique approach. Luckily, all agents really need is a careful selection of buyers, an in-depth home inspection, a foundational knowledge of the financial benefits, and a strong marketing strategy. Then, the rest will be history!
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