Is Buying a Historic Home Right for You?

Some home buyers want new, modern and move-in ready. Others prefer older homes, with character and charm they can't find in new construction. If you’re interested in historic homes, take these factors into consideration as you shop.

Historic neighborhoods often impose restrictions

Many towns throughout the U.S. have zoning and planning commissions that, among other things, set out to preserve and protect historic homes and neighborhoods.

As a result, renovating and altering a historic home - particularly the building’s facade - will require a separate layer of approval and sometimes bureaucracy. If you buy a 100-year-old home, you may not be able to renovate it the way you want, and that is a serious consideration.

Some landmark or historic districts retain an immense amount of control. As a result, renovations and planning can take longer and cost more. If you’re purchasing a historic home with intentions to renovate, you should consult both an architect and town officials.

Recreating architecture from the past can be challenging - and expensive

Let’s consider the example of Victorian-era homes. Contractors and home builders constructed Victorian homes through the mid to late 19th century, often with materials that are no longer in use today.

If you buy a home in less-than-perfect condition, finding the wainscoting, picture rails, crown moldings, and richly decorative and ornate features common in Victorian architecture can be tricky. Architectural salvage companies can track down these materials, but there’s often a steep cost attached.

Repair and maintenance needs could be extensive

Most buyers want move-in ready homes because they don't have the time, money or energy to embark on a renovation project. These buyers also don't want to be burdened with systems going out or having to live with older or outdated technology. For them, it's a quality of life issue.

If you want a historic home, you need to have a maintenance strategy in mind. Unless you plan to do major renovations or updates (subject to any landmark or historic area regulations), you have to be ready to address issues that arise. Broken systems, leaks or flaws mean time and money.

For history buffs, no amount of time commitment or money will stand between them and a one-of-a-kind home. That person appreciates the architecture and knows that intensive maintenance is par for the course. If you don't share that appreciation, a historic home is not right for you.

Related:

• This Historic Connecticut Home Once Hosted a Dancing George Washington
• Living Legacy: Making a Family Home in a Historic Mansion
• 1800s Estate Proves History Is Anything But Drab

Note: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinion or position of Zillow.

Originally published February 2015.

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November New Home Sales: Setting Up for a Weak End to 2018

• November new home sales rose 16.7 percent from October, to 657,000 units (SAAR), according to the U.S. Census Bureau. Sales were down 7.7 percent from November 2017.
• Inventory of new homes for sale rose 0.6 percent from October and 14.2 percent year-over-year, to 330,000 homes — the highest points since January 2009.
• The median sales price (non-seasonally adjusted) of new homes sold in November 2018 was $302,400.

Even after an autumn that proved stronger than first reported — initial data for August, September and October were all revised upward — new home sales are poised to end 2018 down decidedly from a year ago. November was an OK month in terms of volume, but was nevertheless well below November 2017, when a rush of buyers likely pushed their closing dates forward prior to new tax laws taking effect. And new home sales often track existing home sales closely – and after a decent November, existing home sales plummeted in December. The main culprit for the year-end weakness is a combination of mortgage rates that hit a seven-year high in November and a pullback in new construction starts that began early in the year. It's been a season of anxiety for builders over the past few months, driven by worries of a potential broader economic slowdown, high construction costs and short-term uncertainty as a result of political volatility. The partial federal government shutdown also delayed the collection and publication of critical housing market data widely used in long-term planning and decision making. There's at least the potential for one of these weights to be lifted, if only temporarily – mortgage rates have retreated lately from recent highs, offering buyers more wiggle room in their budgets to afford somewhat pricier new homes. Even so, December and January sales are likely to be softer than November, despite lower interest rates. The path of mortgage rates has shifted definitively lower since the fall, but the builder pipeline is a long one and it will take them many months to respond to those changes, if they decide to at all given the longer-term storm clouds on the horizon. The effect of lower rates is more likely to be seen in new construction prices than in sales numbers.

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Credit Card vs. Debit Card: Which Is Better?

When you make everyday purchases, chances are you don’t stop to think about the piece of plastic you pull out of your wallet. You swipe, you pay, you leave. Most of the time, you’ve used either a credit card or a debit card. And while most cards look the same, they are anything but. The features and benefits of these two methods of payment are quite different.

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How Debit Cards Work

Debit cards work like a plastic version of a paper check. Whenever you use a debit card to make a purchase, the funds are withdrawn from an existing bank account. If you use up the funds in your bank account, you generally can’t use your debit card for new purchases until you deposit more money into the account. The money you’re spending when you use a debit card is your money.

How Credit Cards Work

Credit cards work like loans. When you use a credit card to make a purchase, you’re borrowing money from your card issuer, normally a bank, which you must eventually pay back. The “credit limit” on the account controls how much you’re allowed to charge at any given time. The money you use when you use a credit card is the bank’s money.

Debit Card Benefits

Debit cards tend to have a cult-like following among some in the financial community. Here are some of the reasons why.

You Won’t Go Into Debt With a Debit Card

Although it’s technically possible to overdraw your bank account or tap into overdraft protection and create debt by using a debit card, that’s unusual. Generally, you can only use a debit card until you exhaust your account balance. As such, you can’t go into debt.

The fact that debit cards are tied to bank accounts keeps most people from spending more money than they have available. Mind you, a debit card won’t prevent overspending nor will using one make you a good budgeter. A debit card is simply a deterrent to creating debt, not a deterrent to overspend.

Debit Cards Offer Fraud Protections

The Electronic Funds Transfer Act is a federal law that offers you protection if someone uses your debit card for unauthorized charges. If you report the fraud within two business days, your personal liability is capped at $50. However, if you wait more than two business days, your liability goes up to $500.

Despite these protections, your personal funds can be tied up while the bank tries to sort out the mess. Remember, if someone uses your debit car fraudulently, they’ve stolen your personal money. This means you might not have access to your money for bills and purchases for several days, or longer.

Credit Card Benefits

Because so many Americans have struggled with credit card debt, credit cards sometimes get a bad rap and are even vilified as being some sort of debt trap. I would respectfully disagree as credit cards, when used properly, are arguably the best financial services product available today.

Credit Cards Can Help Build Credit Scores

Credit cards offer the benefit of helping you to build better credit scores. And, your credit scores are one of the most influential components of mortgage applications. Solid credit scores can help you procure cheaper money, rent an apartment or a home without a security deposit and get approved for cheaper auto and homeowners insurance.

Here’s the catch: You must manage your credit cards properly or they can work against you. If you make late payments or charge excessive balances, credit cards could hurt your credit scores instead of helping them. Plus, carrying a balance month to month will result in you paying some hefty interest fees.

Credit Cards Offer Better Fraud Protections For Unauthorized Charges

The Fair Credit Billing Act (FCBA) is a federal law that protects you if someone uses your credit card fraudulently. Unlike debit card fraud protections, the FCBA caps your liability at $50 if your credit card is used without your permission as long as you report the fraud within 60 days. And, all of the major credit card networks have zero fraud liability policies so you likely won’t have to pay a dime if your card is ever abused.

Debit or Credit: The Bottom Line

Although both types of plastic offer convenience and are far safer to use than cash, credit cards win as the better payment method in every category. Portable capacity that can grow into the tens of thousands of dollars, zero fraud liability, near-universal usability and optional fees and interest make the credit card the apex predator of the financial services world.

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What is Negative Equity?

One of the best things about owning a home is building equity. Equity is the portion of your home’s value that belongs to you. When you first buy your home, you put down some amount of money as a down payment. At that point, that is your equity.

As time goes on, your equity grows in two ways: Your mortgage balance declines as you make payments, and the value of your property increases. Your equity soars, increasing your net worth. Unless …

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Sometimes homeowners find themselves in a negative equity position, meaning that they owe more money on their mortgages than their homes are worth.

Upside-Down Mortgage: How Does It Happen?

It can happen in two different ways: The value of your home must decline, or the balance of what you owe the bank must increase. Both seem unlikely, but they can happen.

Declining Property Value

How can your property value go down? It happens, as it did during the 2008 financial collapse. In many areas of the country, property values went down by 50 percent or more. If you had just purchased a property with a 10 percent down payment, it doesn’t take common core math to see that you’ll owe more than the property is now worth – you’ll have negative equity.

Your property value can decrease for other reasons, too. External factors sometimes bring down your value, too. For instance, when large manufacturers – such as automobile or steel companies – close down plants, the value of homes throughout the entire city can drop. A land use change, such as a freeway being planned on the border of a neighborhood, can diminish desire for an area and negatively affect property values.

Even you can damage your home’s appeal, by not maintaining it or making ill-advised “improvements” to your home.

If the value of your home declines below what you owe on it, you will have negative equity.

Increasing Debt

Increasing debt is rare today, but it can happen. Each time you make a payment, your principal balance goes down, but interest is always accruing (being charged) and increasing what you owe. The reason your loan balance goes down over time is because your payment is more than the interest that accrues each month, so you pay all the interest that accrued plus a little principal.

However, if you miss a payment, the accruing interest quickly overtakes what you would have paid. Within a week or so of missing the payment you will owe more than you did the previous month. If you catch up, you’re fine, but if not, your loan balance grows very quickly. Plus, you are charged late fees, and if you go long enough, you will be charged fees for the lender’s collection efforts, including possibly legal fees.

You would be amazed at how fast your unpaid principal balance will grow in this circumstance. This is a good reason to make your mortgage payment your first priority when times are tight.

What To Do If You’re in Negative Equity

If you are thinking long-term, it doesn’t really matter. This is your home, after all, and you have to live somewhere. As long as you keep making your mortgage payments, eventually your loan balance will go down and your home’s value will go up, putting you back into a positive equity position.

So, although this may not sound helpful, if you don’t plan to or need to move away, hang in there – your negative equity will turn positive in time.

You can also ask your lender for a short sale. This is where the lender agrees to take less than what is owed.

If you plan or need to sell, your negative equity puts you in a difficult position. When you sell your home, you must pay off your mortgage. If you are underwater, then the proceeds from the sale will not be enough to pay off the principal balance. What happens then?

If you have enough money in savings to cover the difference, then you can sell your home and you will have to bring money to escrow to cover the negative balance. While no one wants to pay to sell a home, sometimes that may be the best course of action.

You can also ask your lender for a short sale. This is where the lender agrees to take less than what is owed. Generally, a lender would only do this if you can’t continue to make the payments and don’t have enough in savings to make up the difference. However, it is done all the time, so it is possible. Be aware, however, that debt forgiveness can be a taxable event. Consult with your tax advisor to be sure.

How to Avoid Negative Equity

You buy a home to build positive equity, and the best way to do that is to make all your payments on time for a really long time.

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This Philadelphia Farmhouse Is a Historic Stunner

Take a stone farmhouse from 1810, mix it with the best furnishings you can find at flea markets in Paris, and the result is this exquisitely renovated Colonial home outside Philadelphia.

A walk-in fireplace graces the living room, while the formal dining room boasts French doors that open onto a screened porch. For a cozier ambiance, the library of this 4-bedroom, 3,800-square-foot home features a fireplace and picture-window views.

A beautifully upholstered floating wall was installed in one bedroom to allow a lake view while lounging in bed. A chandelier hangs above the bed, and behind it is a sitting room.

 

Owners Michele and Michael Friezo also remade the nearly 8-acre grounds, adding formal and informal gardens. They planted more than 300 types of flowers in a meadow with a fire pit that overlooks a private lake.

The pleasure of watching the sun on autumn evenings is rivaled only by watching the snow fall while sitting by a roaring fire in the barn, Michele Friezo said.

The couple also renovated the estate’s crumbling horse barn, which is a rustic version of the main home. Concerned that adding insulation would take away the barn-like appearance of the structure’s interior, they bought a second barn and installed it inside the first one.

The barn’s massive French windows face the meadow and the lake, offering front-row seats to the nesting of two bald eagles who live in a nearby grove of pine trees.

The estate sold for $2.575 million with Caryn Black of Kurfiss Sotheby’s International Realty.

Photos by Juan Vidal Photography.

Related:

• Living Legacy: Making a Family Home in a Historic Mansion
• This Historic Connecticut Home Once Hosted a Dancing George Washington
• The Childhood Dream Home Turned Dream Come True

Originally published December 2016.

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Living Legacy: Making a Family Home in a Historic Mansion

Noah and Dennis Brodsky didn't set out to buy a historic home.

They were just looking for a place that could provide a bit more room for their growing family than their 800-square-foot Manhattan apartment. But as soon as they saw this Nyack, New York, home, they knew it was meant to be.

The Gothic Revival house hit all the marks they were looking for and more: It’s spacious with a gorgeous view of the Hudson River, and it’s within walking distance to town.

A powerful history

Discovering the home's history was an added bonus.

Built in the 1850s, the 6,000-square-foot house was once owned by Thomas Edison's lab assistant, William H. Hand. Hand and Edison worked together often in the barn, making significant technological improvements to the battery.

The house was in excellent condition when the Brodskys made the purchase in 2014. "What we really spent time doing was making it feel like ours," explains Noah.

They changed the colors, added their own furniture and built a nursery for their baby. As an homage to the history of the house, they replaced the standard light bulbs in the kitchen with Edison bulbs.

"That personalization is really where we put our energy," Noah remarks.

Quirks and challenges

While the home has been modernized, many historic touches - like original handmade crown moldings and a maid's bell system that no longer works - remain.

Noah says that they also find relics hidden around the property. For example, in the backyard, they discovered an old smokehouse and a rusted animal-pulled mower buried in the ground.

Living in a historic home can have its quirky challenges. Getting Wi-Fi throughout the house is "constantly frustrating" because of all the brick. And after the couple’s first chilly winter, they added insulation in the attic to help with the heating.

Tips for historic home buyers

Dennis advises overestimating maintenance costs. If something needs to be restored or fixed in a historic home, often you can't simply call a contractor.

Additionally, the couple didn't anticipate the impact that having a home on the National Registry of Historic Places would have on their insurance costs.

"But it's a lovely house," says Noah, and the two are relishing creating new family traditions in it.

Related:

• This Historic Connecticut Home Once Hosted a Dancing George Washington
• 2019 Design Forecast: What’s In, What’s Out
• This Home Looks Like a Barn (But Has Enough Room to Be a Small Castle)

Originally published November 22, 2016. 

via Living Legacy: Making a Family Home in a Historic Mansion

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1800s Estate Proves History Is Anything But Drab

Steven Favreau is the type to go big - and go home.

When he set out to put down roots near his hometown of Boston, Favreau fell in love with an old country estate in quaint Chelsea, Vermont. It was the perfect place for this interior designer to escape from the hubbub of big city life after working with celebrity clients and more.

"It was a quintessential Vermont house in a quintessential Vermont town," said Favreau, about spotting the house in 2012. "I hopped on a plane and bought it the next week."

Built in 1832, the house was once owned by a man named Aaron Davis, whose family lived in it for at least 100 years. Davis' granddaughter eventually sold the 23-acre property in the 1980s, and the new owner converted it into a bed-and-breakfast. (There's still a portrait of Davis above one of the home's five fireplaces.)

After Favreau purchased the 5-bed, 5-bath home, he sought to restore it to its original grandeur - at a frenetic pace. A contractor brought in a crew to rework everything from the wiring (it was a fire waiting to happen) to the wallpaper (there were eight layers throughout the house). The workers even put in a massive new beam to support the house and keep it from sinking.

Up next on the designer’s list: keeping the look, feel and integrity of the antique touches, while updating the space to accommodate today's trends. He tore out a downstairs wall to expand the kitchen to 700 square feet; the master suite got a modern bath with a soaking tub.

Favreau painted walls in his signature bright colors and added bold wallpaper. He lined the master bathroom with tree-print wallpaper. The dining room got a splash of flamingo pink with a print of Victorian-looking cake plates - a nod to the era in which the house was built.

"What I wanted to use for inspiration was the house and the period of the house, so nodding to the period and updating it with a contemporary aesthetic," Favreau said. "It says today, but it also says yesterday."

Some things are distinctly New England. A wooden footbridge connects the main property to 22 secluded acres on the other side of the White River. On warm summer nights, Favreau’s family will pull a dining room table out onto the bridge and dine alfresco.

In the winter, the adjacent land allows for snowshoeing or cross-country skiing.

There's also an old wood barn, which Favreau envisions becoming an event space for weddings or storage. The possibilities for the next owner are limitless, he said.

"It's a big glorious house, and my family is a big glorious family. We've enjoyed it," he added. "I feel like I've loved my time being there and up in Vermont, but it's time to find the next one. Maybe an oceanside property."

The home is on the market for $695,000. Zoe Hathorn Washburn of Snyder Donegan carries the listing.

Interior photos courtesy of Jim Mauchly of Mountain Graphics Photography. Exterior photos courtesy of Andrew Holson with Snyder Donegan Real Estate Group.

Related:

• Hibernate Luxuriously in This 5,572-Square-Foot Cave Mansion
• 2019 Design Forecast: What’s In, What’s Out
• This Home Looks Like a Barn (But Has Enough Room to Be a Small Castle)

Originally published September 2017.

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This Historic Connecticut Home Once Hosted a Dancing George Washington

Built in 1680 and listed on the National Register of Historic Places, this center hall Colonial home in Old Lyme, Connecticut, is not only a living testament to early American architecture - it's also got a storied past of its own.

The home once served as a storefront during the Revolutionary War and was largely used as the Peck Tavern throughout the second half of the 18th century and early part of the 19th century.

It's even rumored that George Washington stopped by to dance in the former ballroom, which is now used as the master bedroom.

The house was also once headquarters for the Old Lyme Guild, an organization started in the 1930s that exhibited and sold arts and crafts.

For a period of time, there were even shops for cabinetmakers, bookbinders, metal workers, potters and weavers out in the barn.

"Can you imagine the conversations that have happened in this house? That's something I like to think about," says the homeowner.

In addition to its spectacular history, the home is also architecturally significant. Hand-hewn beamed ceilings and corner posts, original wide-board floors, and rare double-arched paneling that was specific to the Connecticut River Valley in the 18th century are just a few of the unique features in the home.

Updated for modern living (yet still keeping the historical integrity), the home now has geothermal heating and cooling, a modern kitchen and updated bathrooms, and plenty of space for entertaining.

"It's been a wonderful house to share with friends and family," says the homeowner.

The home is listed for $1.075 million by William Pitt Sotheby's International Realty.

Photos courtesy of Peter Harron.

Related:

• 1800s Estate Proves History Is Anything But Drab
• Small-Town Charm: 8 Homes for Sale in Less Populated Areas
• A Park Slope Townhome That Went From ‘Mess’ to Masterpiece

Originally published July 2018.

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