Historic Home

Buying A Historic Home: What You Need To Know

Katie Ziraldo9-Minute Read
October 03, 2022

If you love older architectural styles and yearn to live inside a piece of history, buying a historic home could be perfect for you. Older homes are often better constructed and have more unique features to enjoy. With history and charm, however, come a few drawbacks.

When you buy a home more than 50 years old, the chances of it having hidden (or not so hidden) issues are pretty high. After all, the homes of the past were built for a totally different time. Some historic houses may have been built before widespread electricity or even modern indoor plumbing. Many modern features present in the home were likely added after original construction and could have various issues from years of use or even installation error. Incorrect or outdated electrical wiring, structural issues, and features that defy local building codes are a few common examples.

That said, it’s important to know what you’re in for before you set out to buy a historic house. Let’s go over a few things every buyer should know.

What Is A Historic Home?

Many people would consider any older home historic, but a true  historic home is one that is registered to the U.S. National Park Service’s National Register of Historic Places. Registration to this list grants homeowners a few perks, like possible access to grants and tax credits, as well as the ability to utilize their home as a historical education tool if they wish. Not every home can make the list, however.

Generally, a home must have been built at least 50 years ago to qualify. It also must typically meet some or all of the following requirements, depending on the structure:

  • Associated with some significant event in history
  • Associated with the lives of historically significant figures
  • Associated with a practice or feature connected to a certain time period
  • Embodies unique characteristics that fit a certain time period
  • Located within a historic district

What You Need To Know Before Buying Historic Property

If a house you’re looking to purchase is considered a historic property (or honestly, even if it’s just an older home) there are a few things you should keep in mind. Unfortunately, living in a historic home isn’t always all old-timey charm. Let’s discuss a few things to remember.

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You’re Buying A Piece Of History

When you purchase a historic home, you’re not just buying a house to live in – you’re taking ownership of a living, breathing piece of history. Many new homes are based on cookie-cutter designs, but historic homes often have a charm and style all their own. Houses from the past have floor plans and design elements that reflect a time very different from the one we are present in today.

Historic homes, due to their age, are also often located in older, more developed neighborhoods with beautiful and abundant landscaping, complete with mature trees and gardens. And for fans of the paranormal, historic homes are also more likely to be known for being haunted!

The Historic Home May Require Maintenance

One of the biggest things to remember when buying a historic property is that it is old. Most historic houses are decades, if not centuries, old. With age, unfortunately, comes various problems caused by wear and tear. Many older houses were built with more natural materials than we are used to today, which can be beautiful – but also leaves the structure vulnerable to natural degradation.

Aged homes are more likely than new ones to fall victim to termite damage, foundation issues and other structural problems that occur with time. When looking at an older home, it’s important to get a thorough inspection before closing to make sure there aren’t any serious problems that could end up costing you a huge chunk of money and time.

Renovations And Improvements May Be Regulated

When a home is registered with the National Register of Historic Places, there are typically some restrictions placed upon what a homeowner can do with the property, typically for historic preservation purposes. To assure a homeowner isn’t detracting from the historical value of a structure, there may be limits placed on whether you can add visible additions to the structure, among other things that could change the way a house looks.

Renovations may prove challenging in some cases, as some properties will not be eligible for major home improvements. That means you could get stuck with old, drafty windows or other issues that you will have no real solution for.

6 Steps To Follow When Buying A Historic Home

Buying a historic home follows the same process, for the most part, as purchasing a normal house. You’ll still have to find a house you love, get approved for financing, make an offer and get an appraisal. With an old house, though, there will be a few additional things you will want to make sure you tackle during your home buying process to protect yourself – and your wallet.

1. Find Your Home

The first step to buying a historic home is actually finding one. The best way to do this is to work with a real estate agent. Real estate agents are experts in their field and can give home buyers extremely useful guidance on where to buy and what to consider, depending on what you’re looking for in a home.

An experienced agent may be able to point you toward historic districts and homes that might suit your preferences. You can also use listing websites like Rocket HomesSM to help find older houses. By setting the construction date filter to homes built prior to 1950, you can find many houses for sale with history. (Here, for example, are homes for sale in New York built prior to 1920.)

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2. Research Any Easements Or Restrictions 

Before purchasing your property, it’s also a good idea to check for any easements and restrictions. Easements give people or organizations limited rights to access your property for specific reasons. For example, if you lived next to a public beach, there might be an easement on your property allowing the public to cross a path through your yard to get to the water.

There could also be easements in place that restrict renovations from being made. For example, there may be a ban on putting up a fence of a certain height that could block the view from your neighbor’s yard. To find out if there are any easements on a property you’re considering buying, it’s a good idea to pay to have a title search done.

3. Acquire Financing

The next step in the process is to acquire financing to purchase a home. This is typically done by finding a mortgage lender and getting approved for a set loan amount. Many historic homes, however, will need renovations that could be costly and won’t be covered by your mortgage amount. It may be a good idea to look into additional forms of financing for that reason, too. Home improvement loans can be a good option for large-scale projects.

4. Have The Home Inspected

Having your home inspected is crucial when purchasing an older home. The home inspection is a separate process from the home appraisal. An inspection seeks to discover not the value of your home, but whether there are any major issues that will need fixing. With a historic piece of real estate, many things could turn up. Structural damage, faulty heating or cooling systems and many other issues might be present that even the sellers may be unaware of.

A home inspection is often not required by mortgage lenders, but it is absolutely something that will be worth your money when purchasing a historic house. After all, if there are major problems, you don’t want to get stuck paying thousands of dollars later on.

5. Get The Home Appraised

Once your potential future home has been inspected, you’ll also need to get it appraised. The appraisal process is similar to a home inspection – a professional appraiser will come inspect various features of your house. An appraisal is less in-depth than an inspection, however, and seeks mainly to determine the fair market value of the house for the sake of your loan.

With older homes, however, it can be difficult at times to find an appraiser willing to look at the property. A big factor of appraisals is finding comparable properties to examine the home against in order to judge its value. Historic homes often don’t have any comparable properties near them. This can make things a lot more challenging for an appraiser, who won’t have any reliable comps to work from.

6. Close On Your Historic Home

Once you manage to secure financing and get your future home inspected and appraised, you can finally close the loan, given there aren’t any major issues. The entire closing process typically takes around 30 – 45 days. When you finally reach closing day, you’ll sign documents, pay closing costs and the title of the home will be transferred to your name, making you the official new owner of the property.

The Pros And Cons Of Buying A Historic Home

As you can see, there are both pros and cons to purchasing older homes. Let’s explore a few benefits and downsides to historic homeownership before you commit to your own piece of history.

Pros 

  • Historic homes offer unique designs that create character and charm
  • Historic homes can come with tax incentives
  • Historic homes are often located in more developed neighborhoods

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Cons 

  • The property could be costly to maintain over time
  • Historic homes may require large renovations or improvements
  • City regulations may limit what renovations you can make
  • Obtaining financing and insurance may be more difficult

FAQs About Buying A Historic Home

There’s a lot to think about when buying an old house, and as a potential historic homeowner, you’re bound to have a lot of questions. Here are a few common questions surrounding historic houses to help clear up any confusion.

Are historic homes a good investment?

Historic homes can be a good investment – though if monetizing your purchase is the only reason you’re buying an old home, you may want to look elsewhere for more reliable profit.

One of the benefits of owning a historic home is the tax break you can receive, which might offset the cost of maintaining the home over time. Some states offer tax credits for purchasing and rehabbing a historic home. Virginia, for example, offers a 25% tax credit for the rehabilitation costs incurred. Because tax credits directly lower your tax liability, this can mean substantial savings come tax time.

So, the answer is a resounding maybe. If your interest in the house is just as a real estate investment, be sure to do your research and be sure the property is something that will be worth pouring your capital into. If it’s in poor condition, make sure something like flipping the house to restore it will even be possible with potential restrictions and easements that could find you wasting your money later on.

Are historic homes worth more?

Although it depends on the specific property, it’s not uncommon for historic homes to have higher values than other homes in similar areas. For example, old homes built by the famous architect Frank Lloyd Wright regularly list with multimillion-dollar price tags, regardless of their locations. It’s important to research the home you’re interested in ahead of time to get an idea of the demand for the building and its value; a real estate agent may be able to help you estimate this as well.

Do historic homes increase in value?

Well-preserved historic homes in well-maintained historic districts have been known to outpace newer homes in the same location in home appreciation. But of course, failing to keep up on maintenance in an old home is an easy way to lose property value.

Are historic homes hard to sell?

Some historic homes may take longer to sell than traditional homes, primarily due to the upkeep involved in owning them. Owners of historic homes often pay more in maintenance and repairs than the average homeowner, which can be off-putting for the wrong buyer. But that doesn’t mean the house won’t sell, it simply means the target audience for historic homes is more niche than that of traditional homes.

The Bottom Line: Buying A Historic Home Should Be Carefully Considered

Buying a historic home can land you in a beautiful house straight out of another era – but it also comes with a lot of responsibility. Old homes are more likely to be in disrepair and can be a potential strain on your wallet, depending on the work that needs to be done. As with any home, do your research before buying to assure this is a good financial move for you.

If you decide you’re up for the task, buying a historic home can be a great choice. But if you’re not ready to commit, take a look at other popular house styles.

Katie Ziraldo

Katie Ziraldo is a financial writer and data journalist focused on creating accurate, accessible and educational content for future generations of home buyers. Her portfolio of work also includes The Detroit Free Press and The Huffington Post.