What You Need to Know About Buying a Historic Home
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If your clients fall in love with a historic home, they need to know that buying and owning one can be more complicated than a regular home. Here are some things you should inform them of so that they have all the information they need before buying a historic home.
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- Obtaining financing and insurance for a historical home can be challenging. Marketwatch reports that some lenders are hesitant to offer mortgages for old homes that need a lot of repairs. However, there are options that can be used for renovations. For example, a 203k loan, a private HUD title loan or a Fannie Mae HomeStyle Renovation mortgage.
- It can be costly to repair and maintain a historic home. Old buildings were constructed with different materials than new ones, and seemingly simple repairs can become challenging and costly. For example, think of trying to replace a 100-year old window with an appropriate alternative or repairing a tin roof. You’d need to find tradespeople with the right materials and expertise — and that can be expensive.
- It’s possible to get tax credits for maintenance and repairs. The IRS states that there’s a rehabilitation credit for qualifying buildings. The homeowner will receive a 20 percent credit spread out over five years.
- There may be restrictions in terms of what can be done with the home. According to CBS News, local and state regulations can restrict what homeowners can do with the exterior of a historic home. For example, homeowners may only be allowed to use certain paint colors or types of windows. At the same time, some historic homes have easements on them. This will designate exactly what can and can’t be changed in a home.
- The home can come with old problems. Think of things like issues with the foundation, insufficient wiring, a lack of insulation, old plumbing, and even lead paint. Since these issues can affect a homeowner’s comfort and health and can be expensive to repair, it’s advisable to have the home looked at by a home inspector who possesses experience with historical buildings.
- A historical home can be challenging to sell. Relatively few homeowners want to be restricted as to what they can do with their home while at the same time being obligated to maintain it in a specific manner and to a certain standard. That’s why historical homes frequently sit on the market longer than regular ones.
Help Buying a Historic Home in Los Angeles
Clearly, buying a historic home requires a lot of dedication and a significant amount of funding. But for those homeowners who truly fall in love with the unique features and character of an old building, it’s well worth the investment.
Happy client, happy realtor. Visit Century 21 Peak to learn more digestible real estate tips and get an edge over the competition. We are your #1 Los Angeles real estate experts.