Selling Santa Barbara Real Estate
and Montecito Real Estate

Take a moment and search the Santa Barbara MLS to see what properties are currently available for Santa Barbara real estate and Montecito real estate. The developable land areas in Santa Barbara are limited.  This part of southern California in known for its great climate, location relative to points of interest, a regional aesthetic, community services and lifestyle; it´s no wonder why people embrace the desire to live here.  It´s a simple case of supply and demand.

There´s nothing else like Santa Barbara real estate and Montecito real estate. The supply of available real estate whether it be single family residences, luxury homes, condominiums, investment property, land, ranches or commercial property is very limited compared with the over weighted demand for these types of properties.  Thus, property values have appreciated to levels that lead the housing sector when compared to the rest of the country.  See the Santa Barbara MLS for all the currently available properties.

It can probably be said that because of the qualities that are attributed to living in Santa Barbara and Montecito; that the ownership of real property becomes an enhancement of one´s lifestyle. Of course our real estate market is supported and affected by changes in economic conditions locally, regionally, nationally and even globally.  Generally speaking, economic changes impacting real estate markets across the country have seen more positive affects locally on economic upturns and a lesser impact during downturns.  In the end, a property´s value and its salability will be relative to the local market conditions, volume of market activity and competing properties that are available as alternative choices for buyers.

Selling Santa Barbara real estate and Montecito real estate in our market is not any easier because of the popularity that the area enjoys.  Like any other market our real estate market experiences peaks, plateaus and downturns.  Affluent buyers of luxury real estate always have the option of deferring their timing in regards to making investments as often times do sellers when offering a property for sale.  Financial strength gives real estate investors more options of choice and time. 

Ultimately it will always come down to relative value, style, aesthetics and utility.  The market is constantly changing both from competition in the marketplace, the number of buyers that are looking at any one time and the economics of the day.  It is highly recommended that you consult with a real estate professional who has the experience and insight to advise you when preparing your property for the market, in implementing a market plan and pricing your Santa Barbara real estate and Montecito real estate correctly.

Develop an Exit Plan

Planning is an essential element for success.  Let´s work backwards. You´ve just sold your property, where do you go from here?  It will be prudent to investigate the market area to where you will be moving or where you will reinvest in order to get a handle on the types of properties available and their value ranges.  Asset management may also be a consideration so consulting with your accountant or attorney could be helpful.  You may even want to consider an exchange for your property.

Timing will be the greatest unknown factor.  It is impossible to predict when your property will sell.  It may happen quickly or it may take months, so preparing for the transition whether it concerns a residential property or an investment property, will set the stage for when everything comes together.  Planning ahead for challenges that may arise during the sale process will be important both for you as the seller and for reinforcing the confidence level of your buyer who is anticipating completing the sale.  The majority of real property in Santa Barbara is unique in its aesthetic appeal and certainly location.  Buyers usually have a selection of properties from which to choose in their price segment.  It will be important to emphasize your property´s strong points and minimize any weaknesses.

Preparing Your Property for the Market

Ultimately every property has to stand on its own merits.  It will be crucial to step back and analyze the subject property with a critical eye or from the perspective of the buyer who has yet to see the property.  Try to remove ego from the equation as well as any excuses for living with a property´s shortcomings.  Your evaluation and analysis should be all encompassing and inclusive.

The underlying questions should be: Is the property ready to be shown in its best light and if not what can reasonably be done to improve the situation?  Will specific capital improvements made to the property translate into a better return on the sale or improve the property´s salability?  How familiar are you with the property´s condition and environmental factors that may have an impact on the property?  What terms are you prepared to work with when selling the property?  Do you want to consider offering the buyer financing?  Are you able to be flexible with considerations affecting the transition during and after the sale?  Are all family members or business partners who are part of the decision process in agreement with how to proceed?  Are you reasonably confident of your value assessment for the property?

Let´s start with the obvious.  The subject property should be clean, in reasonably good condition and any negative deterrents should be mitigated as best as you are able.  Defects or any negative elements need to be corrected or will have to be offset in a correction to the asking price.  Once the buyer is found for the property, they will no doubt conduct any number of inspections and tests to determine the condition of the property which is their right and as they should.  Residential properties in particular are offered in 'as is' condition which does not mean that the buyer has to accept any and all conditions that the property is in without recourse; it does mean that the buyer is put on notice that he/she is responsible for their own investigations and should rely solely on the information which is generated from their inspections.

Strategies for a Smooth Transition

We can probably agree with the assumption that as the seller, you would like the property to successfully transit escrow and consummate in a sale.  Why wouldn´t it?  What challenges could come up?  There are far too many reasons why escrows get cancelled and thus it is strongly recommended to take a proactive approach in handling areas of concern and potential challenges that could be deal threatening.  The seller is required to make disclosures regarding their knowledge of the property, its condition and environmental hazards.  Be honest and complete in making these disclosures.  What the seller discloses in advance is less of a problem than having a buyer discover defects or problem areas themselves.  Remember it is better to enable a buyer to be confident than it is to give them reasons for doubt.

The buyer is entitled to ask for corrective work, repairs or credits for repairs for items that they feel contribute to their use, safety and enjoyment of the home.  This doesn´t mean that buyers are always reasonable in their requests nor does it mean that a seller must accommodate them.  How these issues are handled can have a direct impact on a buyer´s confidence level and their motivation to continue with the escrow.  For this reason it is prudent for a seller to be as informed and prepared in advance so as to deal with any issues that could arise in an enlightened manner.

In brief here is a summary of elements that will come under review:

* Title report; is the report clear or are there liens, easements, questions of property lines or conditions that impact the property?

* Do any easements or conditions restrict the property owner from developing or using the property?  Could any easements or conditions be viewed in a negative light by a potential buyer? 

* Has anyone else besides the owner had access to or has used the property?

* How is the access to the property?  Is road maintenace a concern?  Would the maintenace of the road be shared with other property owners?  Is there a maintenance agreement covering financial responsibility?

* Are there any zoning violations?

* Are there any government guidelines for use or maintenance that affect the property including zoning overlays?

* Are there any features in common shared with a neighboring property?

* Geology; is this or should this be a concern?

* Does the property have a hillside, ravine, steep slope, seasonal creek or drainage area?

* Has the property been graded or had fill added?

* Is the property affected by flood or fire hazard zones?

* How much utility does the parcel offer?  Is there enough space for privacy and recreational use or does the geography of the parcel limit use?

* Does the home meet earthquake safety guidelines?

* Are there neighborhood conditions that affect the property; such as commercial or nonconforming zoning applications around a residential location?

* Do the surrounding properties reflect the value of the subject property or do they skew values differently?

* Are there CC & R´s (covenants, conditions and restrictions) that govern the use of the property and access to it?

* Have there been any structural or system defects?

* Are all the featured or structural elements in the home in working order?

* Is the property in compliance with government retrofit standards?

* What is the physical condition of any and all of the improvements on the property?

* Has there ever been water intrusion or mold identified in the structure?

* Are all property systems in working order?

* Are all the utility services in good working order?

* Are the property boundaries clearly marked?

* Is there a presence of wood destroying pests?

* Are there any natural or environmental hazards on or affecting the property?

* Have repairs or remodeling been completed with the proper permits and been done to code?

* Is the property in compliance with security and safety laws?

* Have any insurance claims been made against the property?

* Are there any lawsuits threatening or affecting the property?

* Are there any bonds or assessments against the property?

* Are there any other items or issues known to you that may affect the use or condition of the property or title that need to be disclosed?

There is a lot to consider isn´t there.  It is important to note that not only will the buyer be considering the answers to these questions, but so will a lender if financing is part of the transaction.  Lenders and their underwriters don´t like surprises either.  Prior to a loan being approved there may be corrective work required by the lender.  These issues usually come to light just prior to the close of escrow.  As you can see, developing a proactive plan that is designed to minimize the impact of such inspections can significantly contribute to a smoother and successful escrow process.  Your real estate professional can go over the disclosures that both the seller and buyer will complete and review as well as a more detailed list of inspections that may be directly applicable to your property.

Your Realtor can identify areas that could be problematic and make suggestions as to the best options for preparing the property for the market.  It is strongly recommended that a proactive approach be taken well before the buyer arrives on the scene when it comes to the discovery and remediation of elements that have an impact on your property and its´ overall value.  It is exactly in these areas where sellers and buyers see situations from different perspectives resulting in challenges over remediation.  The better prepared that you are in advance, the more smoothly your negotiations of the sale and subsequent escrow will go.

Determining the Value of Your Property

This may be the single most important element that will impact your property when it arrives on the market.  There are a few different ways that property owners arrive at an estimate of value for their property.They may visit a number of open houses and make comparisons to what other people are asking for their homes and extrapolate for how they see their house comparing.  A word of caution, asking prices do not equate to selling prices.  They may seek the advice and input from friends and family who mean well and are quick to flatter the property owner with estimates that place the subject property at the pinnacle of its market segment.  Unless someone is an expert in analyzing your real estate market, weigh their advice accordingly.  They sometimes do an advanced extrapolation comparing their home with the most expensive property that has sold in their neighborhood and somehow come up with a valuation that prices their property near this benchmark.  The ego´s intervention overrules reality.

If the property owner has refinanced their property in the recent past, they may attach an emphasis to the appraisal that the lender did in processing the loan.  Appraisals are a snapshot of a perfect world.  They neither take into consideration the aesthetic appeal, utility nor the sale probability which is a combined factor of present market conditions and competing properties.  Sometimes a property owner may interview a few Realtors who will provide the seller with a Comparative Market Analysis for their property.  The seller is left to decide which if any of these Realtors is most adept at interpreting the market and often times goes with the one who comes in with the highest price.  Over estimating a property´s value is known as 'buying the listing', every seller would like to get top dollar for their property and may be swayed by a poor market analysis only to be left wondering months later why they haven´t received an offer.

As you can see from the previous discussions of preparing your home for the market and strategies for a smooth transition, there are many factors that directly impact a property coming on to the market, not to mention the relevance of understanding the economic conditions, evolving market trends, competing properties and their relationship to the subject property as well as the general appeal, condition and market demand for what the subject property has to offer.  In the end, the sale of a property comes down to desirability and value.  These concepts can be very subjective and have a correlation to price and patience.

The more unique a property is the more unique a buyer and their investment profile will be for a good match.  While price is always a factor, having the patience to wait for the buyer who is a good match for the property is necessary as well.  If a property has deficiencies, reducing the asking price is an alternative to offsetting them.  The price range of your home is also a contributing factor to the uniqueness of the property.  The further up the price pyramid which a property finds itself, the fewer buyers there are in that price segment.  These affluent buyers usually consider multiple locations for investment and once decided have higher expectations as to how a property matches their investment goals.  A review of the current market conditions and the recent statistical history will give you an indicator of the number of sales that are probable in the coming months.  Compare this information with the number of properties in your price segment and you will have some insight to pricing and time on the market.

In a perfect world a property should sell at a 'fair market value' in a reasonable amount of time.  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.  As time passes and the market evolves these conditions may change and the participants may have to adjust their positions.  Determining a property´s asking price when it comes onto the market will set the stage over the interval of time between the initial offering and conclusion of a sale.  Your real estate professional should be able to explain all of these elements and work with you in developing a plan which will help you set realistic goals and expectations.

Marketing Your Property

Marketing is getting a product in front of a customer.The sales process is about motivating the customer to buy and the confidence to act.  Service is the credibility and integrity that builds a customer´s trust.  Satisfaction is when the product meets or exceeds the customer´s expectations after the sale.

Your Realtor is going to be a significant factor in all of these areas, so as someone who will be representing you; you´ll need to choose wisely.  This person should have experience in marketing, sales, communications, basic business skills, know the economics of the real estate market and be capable in developing and executing a business plan.

Most Realtors are independent contractors; that is we hang our real estate license with a firm whom provides us with access to training, marketing resources, professional guidance and customer support. Independent Realtors who own their own businesses typically run smaller boutique operations.  Agents and companies differ in their backgrounds, experience, communication skills and business capacities.  The marketing and sale of your property will be a team effort.  As part of your team, your Realtor, their company and the professionals who will be called in to act as consultants and advisors during the process will all play a major role in the success that you will experience during the process of selling your property.

Today the Internet is the primary source for the exchange of information.Information is available 24/7 whenever someone has the desire to learn an answer to their question; the Internet usually offers a wealth of choices and resources.  This has become most evident when a customer is interested in researching their options for purchasing real estate.  From the comfort of your home it is possible to travel the world markets and view properties.  This is how today´s real estate buyer begins their search before they actually travel to a desired location to inspect properties in person.  Your Realtor and their company should have extensive capabilities in showcasing your home on the Internet, both on their respective web sites but also through the network of professionals that they exchange information with.

Print advertising is great locally, but the further away that a publication gets from the location of the subject property, the less likely that a buyer for your property will see the ad.  There may be exceptions for properties that represent great size, value or have unusually unique features where there may be a specific target market, but the truth of the matter is that when someone is serious about buying real estate, they will travel to the location to see what choices are available to them and specifically how these properties appeal to them.  These days buyers come prepared with a collection of information that they have previewed on the Internet.  They want to know as much about the area that they are considering moving to as they do about the homes for sale there.  Some locations in the world have a mystique and allure about them.

Santa Barbara real estate and Montecito real estate are perfect examples of that.  You can travel almost anywhere in the world and mention the name 'Santa Barbara' and it is not surprising to find that not only do people know of Santa Barbara, but they have an opinion of what they think that our area is all about.  Someone who is interested in moving to Santa Barbara is motivated more by their expectations of enhancing their lifestyle than by a particular home.  They are optimistic that they will be able to find the property that fits their needs and are eager to see what is available.  So selling your property is as much about your house as it is about selling the experience of living in Santa Barbara.  You will be best served by an agent and a company who have a comprehensive marking plan that incorporates a mix of marketing media and resources that attracts a buyer´s attention and inspires them to see your home.

Working with an Offer

The day has come when after time on the market and a number of showings, someone likes your property as much as you do and has submitted an offer for your consideration.  Assuming that all is in order and the buyer has provided you with references that substantiate their financial capacity the process begins of negotiating the price and terms of the purchase agreement.  This may involve a number of counter offers and unfold over the course of next few days.  Contingencies will be identified as well as the process for satisfying them and signing them off.  Inevitably compromises will be made until a mutual agreement for the price and terms is settled upon.

Over the course of the escrow, disclosures pertaining to the property´s condition and environment will be made, inspectors will investigate the property for defects and documentation acknowledging the exchange of information will be signed off.  Legal and financial professionals may also review this information and be advising the buyer on a prudent course of action.  After receiving all the reports from the inspections, the buyer may request the repair or remedy of existing conditions.  These requests are negotiable.  The response is often conditioned by how well the property was prepared for the market and barring no surprises, the reflection of reasonable minds and a sense of fairness will go a long way in reaching a mutually agreeable conclusion.  The alternative may be in risking a cancelled escrow and a return to the marketing program while awaiting the next buyer to come along.

The offer to purchase a property such as Santa Barbara real estate or Montecito real estate will establish a number of benchmarks throughout the course of the escrow where you as the seller should become more confident with the buyer´s performance and commitment to close the escrow.  A word of advice before chilling the champagne; when an offer has been agreed upon and the escrow opened the journey is half way along.  As the contingencies are removed the destination becomes closer at hand.  All is not complete until the grant deed is recorded and notification of the closing has been received.  The Santa Barbara MLS notes the sale and now the time has come to celebrate and enjoy the transition that you´ve outlined in your exit plan months ago.  Congratulations.

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