Buying Historic Homes 101: Financing
The first step in buying historic homes is no different than buying any other home – it starts with financing. Most folks aren’t paying cash but financing isn’t all that simple sometimes with a historic home. For example, does the home need repairs or a full restoration? Then you need renovation financing and a lender who offers it. Are you thinking of going VA? Then the home has to be in a condition to pass a VA appraisal, which includes but isn’t limited to, no wood rot or peeling paint. If you’re a first time homebuyer you may want to tap into a down payment assistance program that’s available. On and on. So find out what your financing options are before you begin so that you don’t fall in love with a house you can’t buy.
Next, work with a real estate professional who is experienced in buying historic homes, and preferably, lives in, a historic neighborhood. There are a lot of things not obvious to an agent who has not had experience with all the nuances and requirements and restrictions and challenges to be found in a historic neighborhood. That person can tell you what types of changes you’ll be allowed to do in the future to your home and the steps involved. They know the levels of value that you find in a recently restored home, vs one restored 20 years ago, or a badly restored home vs a quality restoration.
You should consider the challenges of owning a 100 plus year old home. Will your utility bills be higher in a home with original windows? Are you on board with knowing that a wood frame home requires diligence to keep it painted properly to prevent wood rot?
Do you want a home that is fully restored or are you up for the challenge of a partial or complete restoration? Do you want to be able to look back and say you brought this home back to life and made it your own or does the prospect make you want to run the other way? The worst looking home you can find has been around for way longer than you have and it is always restorable. You have to determine if you’re the one to do it.
Would you rather just find a newer built home or build a new one in the historic neighborhood and avoid some of the old home challenges but still be in the historic area? Not a bad option for those that want to go that way.
Which leads us back to those first 2 steps. Your financing options may dictate some of your choices and your experienced real estate professional can guide you through the process. When you finally close on that perfect house you’ll know you’ve come home and you made the right decision.