As incredible as Santa Barbara is as a place to live, people do sell their real estate holdings. There are basically four reasons why people sell Santa Barbara real estate and Montecito real estate; changes in lifestyle where the number of people residing in a home increases or diminishes, to capture the appreciation in value that has been realized in having held a property over time, relocation to another area and changes in use for a property. There is a diverse range of properties available in the Santa Barbara and the surrounding communities.
The Santa Barbara real estate and Montecito real estate markets are different from most other areas of the country. The popular demand for housing in Santa Barbara and Montecito when compared to the relatively limited supply of homes has contributed to the market appreciation. We have what is considered to be a luxury home market, though that is not to say that all homes are luxurious. The majority of residential properties are modest in their size and architectural appointments.
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. 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. While the present market reflects the economic conditions that the country is evolving thorough the change here has been less dramatic. 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. The term 'as is' does not remove a seller's obligation to disclose facts known to them regarding the condition or use of the property, a failure to do sure could result in legal consequences after the sale.
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 a potential buyer view any easements or conditions in a negative light?
* Has anyone else besides the owner had access to or has used the property?
* How is the access to the property? Is road maintenance a concern? Would the maintenance 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?
* If the property in consideration will be developed what requirements need to be met to apply for and receive a Land Use Permit?
* 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, and seasonal creek or drainage area?
* Has the property been graded or had fill added?
* Do flood or fire hazard zones affect the property?
* 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 guideline?
* 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.
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