Real Estate Terms to Understand Before Getting a Historic Home
Selecting a historic property to buy means you get access to a beautiful and unique home with a rich past. However, some people are wary of looking at older properties because they feel like owning a historic home may be a bureaucratic hassle. It is true that there are some extra-legal aspects to consider when getting an older property, but you do not have to be confused.
This guide will help you to understand some of the common legal phrases that regularly come up when shopping for historic properties.
What Actually Counts as a Historic Property?
Before getting further into the details of historic real estate, it is important to take the time to consider what a historic house actually is. Some people may think the term includes midcentury properties while others only view a house as historic if it was built before the world wars.
A simple way of telling if the house is historic is checking to see if it is registered with either the National Register of Historic Places or your city’s Historic District Board. Homes registered as historic may have some extra restrictions.
What is a Historic Preservation Easement?
Many historic homes will come with an easement already attached to them. This is a voluntary legal agreement, but it is quite permanent. Essentially, buying a home with an easement means that you agree to the terms of the easement and agree to only sell the property to buyers who agree to the easement.
Most historic preservation or conservation easements will be held by conservation organization that will make sure the owner sticks to the terms of the easement. This can regulate how the property is used and what renovations can be done to the property.
How do you Determine if Renovations are Interior or Exterior?
One of the most common stipulations for living in historic properties is that you need permits before doing exterior renovations. This might seem simple, but it can actually be tricky to tell if a proposed renovation affects the inside or outside of the house.
In general, this can mean that it may be difficult to change the outer walls, roof, porches, porticoes, doors, railings, or stairs of a home. It may also mean that you have to consider regulations when making add ons, building decks and porches, installing new windows and doors, or adding shutters, window boxes, and flagpoles to areas.
What are Contingencies and Should your Contract have Them?
A contingency is a term used in real estate offers that essentially means you are only bound by the offer if the other party fulfills certain requirements. Since historic homes tend to have some construction issues, you typically want to put in an offer contingent on inspection.
This lets you back out if any major issues with the property are discovered. Other potential contingencies may include requirements that the seller makes certain repairs, that the buyer can sell their current home first, or that the property meets a minimum appraisal value.
Do you Still have to Deal with Escrow when Buying Historic Properties?
Escrow is one of the most frequently misunderstood parts of buying a property. An escrow account is an account of money held by a trusted third party. It ensures that you actually have the money you need to pay property taxes, insurance premiums, and other fees while you are trying to purchase the property. This is an important part of almost every real estate transaction, so you can expect to use it when getting a historic property too.
Do you Have to Join the Historic HOA?
Many historic homes are in districts that include homeowners’ associations. If this is the case, you are probably required to join the HOA and agree to follow their rules when you purchase the property. You can check with your Realtor to find out if there is an HOA governing the property.
Though some people do not like the idea of having extra restrictions, others feel that an HOA is a useful tool for maintaining the historic feel of a neighborhood. HOAs for historic properties tend to regulate house color, lawn decor, parking, and other things not mentioned in the easement.
Now that you know a little more about the phrases you will encounter when checking out historic property, you can see just how simple it really is. By taking the time to do a little research before you begin your house hunt, you can easily find the historic property of your dreams!
For more information about buying Savannah’s Historic Homes, contact The Heather Murphy Group.