How to be a Quality Agent in the Historic Home Market
America is ripe with historic homes, and while most of the oldest homes in the country reside on the east coast, there are plenty of historic homes in the southwest—and Phoenix and Prescott are just a few cities in Arizona that boast a number of examples. Homes in and around downtown or centralized areas of larger cities are becoming more popular and sought out by the day. Younger buyers, for instance, tend to be far more attracted to older homes than they are newer builds. The suburban expanse that once took us out of the city limits has slowed down to make way for modern needs that bring us back into the city. At the end of the day, the new-found love for historical homes partially boils down to one thing—location, location, location.
Phoenix and Prescott have become hotspots for younger potential buyers seeking out old-world charms with modern amenities. With 35 individual historic districts to choose from in Phoenix, and a charming and unique historical downtown in Prescott, buyers have plenty of places to choose from in central and north central Arizona. Phoenix boasts a number of high-end historical communities, including Willo, Coronado, Roosevelt, and FQ Story—while Prescott is a booming downtown with small estates, early 20th century bungalows, and some mid-century moderns.
Most historic homes in Arizona were built between 1900 and the early 1950s, at the height of southwestern expansion. Many of these homes were built after the endings of both WWI and WWII, when soldiers came home and searched for places to plant their roots and begin their families. Phoenix and Prescott were both popular Southwestern destinations for westward migration and many of those homes remain strong to this day, mixing together the charm of a life that once was with the amenities of modern day life.
So, what does it take to sell historical properties and how can you be sure you’re going about it the right way as an agent? Here is a quick rundown of the characteristics of a historic home, how to go about pricing and marketing one, and what are the biggest perks buyers get out of purchasing one:
Characteristics of Historic Homes
Historic homes come in all shapes and sizes. Historical status does not require a property to be a sprawling estate with maid’s quarters and guest homes—historical status can pertain to anything from small bungalows to giant estates, and everything in between.
There aren’t many requirements to signify historical status, but there are different types of historical designation. Homes can be recognized as historic on a local, state, and national level, with the most prestigious homes being recognized by the National Register of Historic Places. Depending on their designation, some historic homes come with harsher regulations pertaining to renovations and repairs on the exteriors, and sometimes even the interiors, as the registry seeks to maintain the integrity of the architecture.
In the simplest of terms, a historic home:
- Must be over 50 years old
- Often resides in designated historic district in its given city
- Are often sought out for their architectural and cultural significance
The quality of a historic home tends to be the most important feature that buyers gravitate toward. Commitment to craftsmanship just doesn’t exist like it used to, and because of that, our homes aren’t built with quite the same integrity as they once were. While we’ve become a society that loves the newest and latest, when it comes to our homes, it’s fair to say that newer isn’t always better. Renovations happen, and when they do, the old world charm a historic home offers mingles with modern updates to create what has become one of the most ideal sales in terms of the current real estate market.
The current largest pool of potential buyers are Gen Xers and Millennials, many of whom have take a different approach to home buying, seeking out a home with quality bones, modern updates, and superior features—like copper piping, plaster walls, original hardwoods, slate roofing, and even stained glass. The modern young buyer has been awakened to the benefit that true quality can bring—and the idea of a Roomba robot vacuum cleaner trailing around a home that once didn’t have direct electricity is almost too good to imagine. Historic homes don’t offer quality alone, but also a sense of historical and modern juxtaposition that a younger prospective buyer can really appreciate.
Pricing and Marketing Historic Homes
Pricing historic homes anywhere is dependent on the surrounding comparable homes—but the uniqueness of historic homes is a key factor in pricing as well, so finding true to form comps can be a difficult task. There often are not obvious homes to compare any given historic property to. For instance, I am currently writing this blog from a home that was built in 1900, which resides next to a house that was built in 1888. While the home built in 1900 has been renovated and has its own set of perks, the home built in 1888 has original features that could easily help to make the price point much higher, even with less renovation.
Renovations play a major role in how an agent will price a historic property, in that a good reno job can make the price tag sky rocket, and a property in need of renovation can be an incredible investment to make if buyers are willing to put in the work to rehabilitate the home to get a return on their venture. Specific to renovating a historic home, a lot of the return on investment is dependent on how much of the original home is preserved in the process. There is a buyer for every property but stripping too much of the original architecture and integrity away can be detrimental to rehabbing a historic home and making a sale.
The plus side to all this dependency on uniqueness is, the price history for any given historic home is usually available to the public—so an agent can use the past trends of the home’s price to come up with a fair and balanced market price. A chief point to make as an agent would be emphasizing the act that property taxes in historic districts and areas tend to stay fairly steady. As an agent, it would benefit you to present a history of property taxes, as well as the price history of the home you are showing, just to give the prospective buyer an idea of how the price and taxes have or haven’t fluctuated over time.
Marketing a historic home is often a vastly different experience than marketing a new build or home built within the last 50 years. As an agent, you have to focus on what makes the property unique and sets it apart from anything else they might find on the market.
Here are three important tips to always consider when marketing historic properties:
- Know where to advertise
- List in magazines and publications with historical context—a place where potential buyers are looking specifically at older properties with historical significance.
- Inquire and network with agents who specialize in historic homes. They may have a built-in clientele—knowing who is buying and who is selling—that they can connect you with.
- Know what to advertise
- Work to come up with the perfect price based on all the public information and updates that can be configured.
- Focus on the history of the home—find a story to tell. Exploit the historical significance of the home in any way you can. Create a historical story to emphasize the charm and unique nature of the property.
- Point out the modern updates where it’s beneficial and do the same for the original components. Is there a new kitchen? Point out all the benefits that brings! Are the moldings and hardwoods original? Make it known! Buyers love to see the connections to history—and the juxtaposition of old and new is super popular right now.
- Know how to market
- Make a website specifically for the historic property listing—using squarespace or wix for easy coding.
- Include a virtual walk-through.
- Incorporate any first-hand articles or pictures that emphasize the age and history of the home. Look for the original blueprints and showcase them with a list of modern updates that have been made.
- Generate excitement by making a site that showcases the property thoughtfully, is streamlines, and easy to navigate.
As the selling agent, it will be beneficial to know the answer to a handful of questions that prospective buyers are sure to ask.
- What year was the home built?
- Were any substantial renovations made?
- Any historical stories or facts to share? Notable owners or residents/visitors?
- What features remain original to the home?
Promote the Perks
Many states offer tax benefits for owning a historic home—including but not limited to reduced property taxes and state income tax credits to be use toward restoring the property. Tax breaks and benefits vary from state to state—Arizona specifically offers property tax reclassification, in which, according to the Arizona State Parks Board, “the fifteen-year agreement requires maintenance of the property according to federal and Arizona State Parks Board standards and limited to property used for non-income producing activities. In order to qualify for the SPT program, the property must be listed on the National Register of Historic Places either individually or as a contributor to a historic district.” The program reduces property taxes by anywhere between 30-45% under the agreement that the property owner will “maintain and preserve the integrity of the property” for 15 years—including the historic features, materials, appearance, and environment. Applications for property owners (or potential buyers) can be obtained through the County Assessor’s Office. When showing homes in the historic districts of both Prescott and Phoenix, it’s vital to know where to direct you prospective buyers if they wish to benefit from any historic tax breaks the state has to offer.
Working as an agent in Phoenix or Prescott all but ensures that a historic property will pop up on your radar at one point or another. Between the 35 historic districts of Phoenix, and the historic downtown area of Prescott, there are plenty of properties for sale that fall under the category of “historic.” With location acting as one of the biggest deciding factors when purchasing a home, historic homes have become more and more popular amongst younger buyers looking to be closer to or in the city.
Selling historic means knowing the ins and outs of the market, and understanding the benefits, and also restrictions, a buyer will face when buying historic. Learn about the history of the property and convey that history as a selling tactic. Emphasizing the charm and integrity that comes along with the home is the best selling point an agent can arm themselves with—so fill that arsenal!