Buying Santa Barbara Homes for Sale – Montecito Homes for Sale

Investing in Santa Barbara real estate and Montecito real estate can have both tangible and intangible rewards.The process can be rather complex. Both your results and success will vary depending on your knowledge of the market and your understanding of the elements that will comprise the basis of your purchase transaction. You´ll want to investigate the properties that are available from the Santa Barbara MLS. It can not be overstated that the benefits that you will receive from working with an experienced Realtor can and will make all the difference in the world in navigating the complexities of a real estate transaction. The peace of mind alone is worth the time in interviewing and finding the right Realtor for you.

The following guideline is intended as a review of the process of buying real property. As you shall see, there will be a lot of information to consider as well as a number of professionals from whom you may wish to seek advice from as you move through the stages of research, financing, negotiations, escrow, inspections, and the resolution of any obstacles prior to taking title and ownership of your new property. Take a moment and search the Santa Barbara MLS to see what properties are currently available in Santa Barbara real estate and Montecito real estate.

People own real estate for three basic reasons; primarily as a place to live, as an investment where appreciation of value and/or income are anticipated and finally and as a lifestyle enhancement where the property could be used as a second home, vacation home or held for aesthetic purposes. There may be times when these considerations overlap and your investment perspective will be multi faceted.

Real estate in Southern California, Santa Barbara, Montecito and the surrounding areas of Carpinteria, Summerland, Hope Ranch, Goleta, GaviotaCoast, Santa Ynez, Los Olivos and Solvang can offer you a diverse range of properties to consider. There are many luxury homes, investment properties, single family residences, multi million dollar houses, estates, ranches, condominiums and even fixers, vacant land, lots and acreage to choose from. In the Santa Barbara area the architecture has been inspired by our Spanish heritage but you´ll also find a range of styles from traditional to contemporary.

Views are often breathtaking with panoramas of the ocean, mountains, city, harbor, coastline, the Channel Islands and even setting views are very attractive with gardens and stately oak trees. The Santa Ynez Valley also known as Santa Barbara´s wine country offers a more casual lifestyle where the properties are no less spectacular and the views overlook vineyards, ranchland and mountain panoramas.

It´s easy to see why Santa Barbara real estate and Montecito real estate has had such strong demand. Just look at the values in the Santa Barbara MLS.The year round weather is outstanding with a mild Mediterranean style climate. There is a sense of place within the community that encompasses the Spanish heritage of old California and the cultural traditions of contemporary America. Santa Barbara´s size is very manageable, yet the availability of activities, events, educational opportunities, transportation and health care rival metropolitan areas many times our size. When one considers the meaning of the concept 'quality of life' in respect to places to live, Santa Barbara consistently scores amongst the premier locations in the world. Now that you are at least partially convinced that Santa Barbara is a great place to live, let´s look at buying Santa Barbara real estate and Montecito real estate.

Learning the Market Areas

Each of the cities, towns and communities listed above has their own unique character and style as well as some of the gated communities within these areas. There will be a range of architectural styles from which to choose. The locations where homes have been built around Santa Barbara have been kept to rather defined and finite areas; undeveloped locations are becoming scarcer every year. This is not to say that Santa Barbara is overbuilt, quite the contrary; Santa Barbara values its´ open spaces. Santa Barbara has kept growth under control with considerations for density, aesthetics, environment, conservation and impact on the general community. Thus the property values here are some of the highest in the country.

It will be prudent to learn and understand the value of properties that you may be considering before making an offer. There are many factors that contribute to the value of a property such as: location, conforming and non conforming values of properties in that location, the relationship of a particular property and its´ value as compared to comparable properties in other locations, unique factors that may affect the value of a property in a location (aesthetics, views, utility, geology, fire zone, environmental hazards, easements, title restrictions, non conforming use, neighborhood conditions), market trends for that location, comparable alternative properties, the zoning classification for the property, CC & R´s (Conditions, Covenants and Restrictions) that may apply to the property, access to and the service of utilities, the improvements (quality, style and size) developed on the property, conforming use and design as compared to the neighborhood, demand for that type of property, scarcity of that type of property and how closely it matches your investment goals.

Financing Your Purchase

You probably have a very good idea of the price range that you would like to consider for your real estate purchase. The education that you´ve experienced through your market research will have helped you define the market segment and target price range of your purchase. In principle, the structuring of the financing of your purchase will either be all cash or involve financing. In either event, this will result in all cash to the seller at the close of escrow unless the seller had previously agreed to participate with your financing.

In the case of an all cash purchase, it will be prudent to consult with your financial advisor as to the timing of events to liquidate any assets that will be converted to cash so that the funds will be available at the close of your escrow on the new property. If traditional or private financing will be a part of your transaction, a longer time line will be needed to allow for the exchange of information necessary for the approval of your loan.

If you will be financing your purchase, it may be to your advantage to investigate the opportunities available, their options and lender requirements prior to making an offer on a property. This will give you the opportunity to be 'pre-qualified' by a lender which may give a seller more confidence in working with and accepting your offer. Eventually the subject property will be reviewed by the lender and appraised with consideration given to the purchase agreement, any inspection reports generated and the title report before finalizing the loan approval. In this regard it would be wise to establish a relationship with a local lender. These lenders are familiar with the local market areas and the properties found there. Thus they have more confidence when reviewing a loan package for a property in these areas and the approval process will more than likely go smoother than one with a lender outside of the area. There are exceptions of course, but if there is any doubt, submitting multiple loan applications may be to your advantage.

Negotiating the Purchase

This will be one of the most important steps in the purchase process as it will set the guidelines of the transaction as it moves through escrow defining the obligations and relationships of the participants. Keep in mind that goals that are clearly defined are easier to focus on. There may be a variety of underlying factors which need to be considered prior to drafting a purchase proposal. Do your homework. Consider the price and terms; these are the two elemental factors in a purchase agreement. Rarely will you be able to control these cornerstones of a transaction to an unfair advantage. Determining a property´s value and reaching an agreement on price will be a primary concern. In a perfect world buyers and sellers would agree upon a 'fair market value'. This would be a price at which a property would change hands between a willing buyer and willing seller, neither being under any compulsion to buy or sell and both having reasonable knowledge of the relevant facts.

You can see that to reach this optimum position on price, that the parties involved would be both educated about the market, the property under consideration and reasonable with their expectations. As you can imagine, it can be a challenge to reach a meeting of the minds. Most homes and land parcels in the Santa Barbara real estate market are unique and making equitable comparisons comes with experience and broad knowledge of the market. Access to this experience and knowledge will be invaluable in structuring a sound position in a purchase agreement.

Escrow

The escrow process in the acquisition of real property in California is the transitional stage where the escrow officer, who acts as a neutral third party, manages and coordinates the exchange of information between all of the participating parties as outlined in the purchase agreement with particular attention to the title report, contingency removals and financing compliance. At this stage, the terms of the purchase agreement can only be modified by the mutual agreement and signed acknowledgment of the buyer and seller. Without any such modifications, the escrow officer will hold the original purchase agreement as the guiding source.

When the escrow is opened, which is usually within 24 hours of mutual acceptance of the purchase agreement or the next business day, the buyer is expected to deposit into escrow the amount stated in the purchase agreement as the 'deposit' on the purchase. This is usually accomplished by a check or wire transfer of funds. This is an important first stage of the escrow process and to delay in any manner may arouse suspicions of credibility concerns throughout the remainder of the escrow. A difficult point to overcome if renegotiations of the purchase guidelines come up based on discoveries that come to light during the contingency period.

A title search will be generated and the status of the subject property as given in the title report will be the legal basis on which the transfer of title occurs. It will contain a legal description of the property, the description of any easements, entitlements, covenants, restrictions, conditions or rights and other matters that may affect or apply to the property. Read and understand this document. It may be necessary to obtain legal advice, have the property surveyed or consult with other real estate experts such as architects, county zoning personnel or land use planners to explain and/or resolve items or concepts that could become issues in regard to your planned use and development of the property.

At this stage of the transaction it will be critical to focus on completing the arrangements for financing. A timely close of the escrow will be anticipated by the seller and an unexpected delay because the financing approval has been delayed can not only cause havoc in the planned transition of the participating parties but may also jeopardize the entire transaction. It is better to allow for plenty of time to accommodate the broad number of details that the lender will be reviewing than to respond too casually to an initial review of 'everything looks fine'. Some of the factors that the lender may take into consideration prior to the loan approval are: structure and capacity of the purchase agreement, disclosure statements and reports, condition and location of the property, environmental reports, inspection reports, title report, contributing source of funds, credit report, appraisal and the general conformity of the property to their lending profile.

We´ll come back to closing the escrow in a minute but first let´s look at the inspection and contingency periods of the transaction.

Inspections

It is possible, reasonable and prudent to investigate any matters that are or could be physically or practically related to the subject property. These inspections and investigations will be outlined and listed as contingencies in the purchase agreement. These inspections may include but not be limited to: general and structural elements of the house and any other improvements on the property, dimensions and location of the property boundaries, pest infestation, soil stability and any other geological concerns, waste disposal, water service (especially from private sources), environmental hazards, fire hazards and insurance, building permits for existing structures and additions as well as any personal factors concerning safety and neighborhood conditions.

The seller 'may' have inspection information to share with the buyer. Residential properties are recognized in their offering for purchase as being in 'as is' condition. This simply means that the buyer is put on notice that he/she is responsible for conducting any inspections, research or gathering of information from which they may rely upon to complete the purchase or negotiate with the seller for resolution or remedies to discovered facts that may or may not have an impact on the property´s condition and thus value prior to the close of escrow. This does not exempt the seller from completing his/her obligations to disclose relative facts and conditions affecting the property of which they are aware.

Note, that unless specifically agreed to in the purchase agreement, the seller may not be responsible for any repairs to the property nor adjustments to the price or the terms of the agreement. Any consideration and restitution for discoveries made during the inspection process and subsequent resolution will be conducted separately from the purchase agreement seeking a mutual agreement to this proposal.Once an agreement is reached an amendment to the purchase agreement will be drafted, signed by buyer and seller and incorporated into the transaction. Sometimes when at this crossroad, the situation becomes a take it or leave it scenario, where you will have to weigh the present and future benefits against the angst and challenges that are immediately in front of you.

Contingencies

Similar to the consideration of inspections, contingencies can be incorporated into the purchase agreement to cover a broad spectrum of concerns and circumstances. Time frames for which information is exchanged, inspections, securing financing and completing any residual elements of the transaction will often carry as much weight as the specific matter itself. Let wisdom and reasonableness be your guide. Imagine yourself in the seller´s position.Understand where you are prepared to compromise and where you will stand firm. It will be important that during the contingency periods that you´ll remain focused on understanding the information received and working out the resolutions to the specific areas that have been identified. Time will pass quickly during the escrow process and inevitably things will come up and adjustments will need to be made accordingly.

Address issues as they are discovered and work out their resolution. If appropriate, put it in writing in an amendment. Once a contingency has been satisfied you will need to sign it off. Many times a collective number of contingencies expire on the same date; they can be listed and signed off together. Do not leave a contingency hanging. The purchase agreement describes the buyer´s and seller´s rights and obligations for dealing with contingencies and should one side ignore the timely process of removing contingencies, the other may initiate a request to perform or proceed with the cancellation of the escrow.

Closing the Escrow

The time has come to finalize the transaction.You´ve completed your inspections of the property, the title report is in order, your financing is in place and you´ve signed off on all of the contingencies. There will be one last meeting with your escrow officer to finalize the transfer of title and the final review of the accounting of the transaction. Once the escrow company receives your purchase funds and the title exchange is recorded you now have become the owner of your new property and the transfer is noted inthe Santa Barbara MLS. Welcome home to your new investment in Santa Barbara real estate or Montecito real estate. Remember to inform the public utility companies and service providers of your change in ownership status so that service will continue without interruption. Congratulations and enjoy your new property.

Real Estate and Financial Insight Timely information to help with your real estate investments.

Buying Santa Barbara Real Estate and Montecito Real Estate

Buying Santa Barbara Real Estate
and Montecito Real Estate