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Common mistakes & how to avoid them when you’re buying or selling Santa Cruz, CA real estate

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With its redwood forests, pristine beaches and stunning cliffside views, the coastal city of Santa Cruz, California is picture-postcard. To settle down in this idyllic surf town is like fulfilling the dream of an endless summer, which is why homebuyers are tempted to rush the homebuying process. The same can be said when selling a house: with the demand for real estate in Santa Cruz, CA high, sellers want to close their home sales as fast as possible and for a good price.

Whether you’re buying or selling, it’s always important to do the necessary research before diving headfirst into the process. Doing so will help you avoid making mistakes and navigating the competitive Santa Cruz, CA real estate market successfully.


There has been a consistently high demand for real estate in Santa Cruz, CA over the past decade, and this remains unchanged. As of the time of writing, there are 176 homes on the market, with prices ranging from $155,000 to $30 million. The median listing home price is $1.5 million at a price per sq. ft. of $897.

Despite price reductions, Santa Cruz, CA remains a seller’s market, with more buyers than homes available. Unsurprisingly, oceanfront homes in affluent neighborhoods like Seabright, Pleasure Point, and Twin Lakes are significantly more expensive compared to houses inland.


Buyers and sellers often have conflicting interests when it comes to home sales. Sellers want to auction off their property for the highest price possible while buyers aspire to secure a home within or lower than their budget.

No matter which side of the fence you’re on, knowing the basic flow of a real estate transaction beforehand can prevent you from being blindsided in the future.

For home buyers

    • Hire a real estate selling agent. Before rushing into anything else, have an honest conversation with your Realtor about your needs, preferences and budget.


    • Check your finances. Determine if you’re in a position to purchase a home. And if you are, how much home can you afford? Cash reserves, household income, monthly expenditures, and other sizable expenses should be calculated in order to come up with a realistic and workable budget.


    • Shop around for houses. Don’t fall in love with the first house you see. Visit multiple properties with your Realtor in areas you like, then compare and compromise.


    • Make an offer. Come up with an offer price and other inclusions, then let your Realtor negotiate on your behalf. A high price isn’t always necessary— you can sweeten the deal by waiving certain contingencies or making a cash offer.


    • Conduct property inspections. Home inspections and seller disclosures are a critical part of the escrow process. If there are any defects that might diminish the property’s value or habitability, you can re-negotiate with the seller, put the deal on hold, or even back out of the transaction.


    • Finalize your mortgage application. Before closing day, make sure your lender has fully approved your mortgage application if you are not buying with cash.


    • Close the deal. Once the sale is finally closed and the contracts are signed, the seller will hand over the keys of the house to its new homeowners.


For home sellers

    • Hire a real estate listing agent. Discuss your financial expectations, set timelines, and disclose any pertinent information regarding the house you’re about to sell. This is also the best time to determine upgrades or renovations with the help of your Realtor.


    • Make the house look more inviting. You can give your house a complete makeover or opt for simple but effective updates. Decluttering, repairs, and a fresh coat of paint can go a long way in bumping its resale value. Professionally captured photos can generate buyer interest online.


    • Set a realistic price. Your Realtor will come up with a comparative market analysis (CMA) in order to ensure that your home is priced competitively right from the start. Home improvements, location, and the average selling price of other houses are some of the factors considered when in a CMA.


    • Promote the property listing. There are a number of tools that can be used to market a house for sale. Online ads, social media, and the regional Multiple Listing Services (MLS) can all be utilized to reach a wider audience.


    • Organize viewings. Subject to your approval, your Realtor may send out invitations for an open house. They can also schedule private viewings at the buyers’ convenience.


    • Review and negotiate offers. The highest price isn’t always the best offer. Carefully review each offer and outweigh its pros and cons. Don’t hesitate to have your Realtor negotiate on an offer you like but can be improved.


    • Fulfill your seller obligations. Once you’ve accepted an offer and signed a purchase agreement, use the closing window to complete your seller responsibilities. Depending on what was agreed, these can include making final repairs to completing disclosures. Use this time to finalize your move as well.


    • Close the sale. On the agreed closing date, you will turn over the title, property deed, insurance policies, service records, warranties, blueprints, and any other important documents to the buyer, provided every requirement has been satisfied.


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There is a certain pride that comes with homeownership. After all, a house is one of the biggest and most personal purchases you can make in your life whether it’s your first or third home.

When stakes are high, there is more to lose. A mistake, no matter how well-intentioned, can spell disaster for your finances and delay your dreams. Below are several of the most common homebuying mistakes and how you can avoid them.

Timing the market is a common investment strategy that revolves around buying while prices are low and selling when the demand is high. In times of volatility, it’s wiser to err on the side of caution for investment decisions. But according to experienced investors, it’s nearly impossible to guarantee that this method applies to real estate.

No amount of research, forecasts, or speculation can accurately predict when the housing market will crash. The real estate market may be constantly shifting, but massive price fluctuations only ever occur over a span of years or during a global crisis. House prices for Santa Cruz, for example, have continued to trend upwards in the past ten years, but we may see more price reductions in the months to come.

It’s wise to consider the market conditions when timing your purchase, but the best time to buy a home is always when you’re ready.

Lacking a clear vision for the future

It’s crucial for a house to meet your current needs and preferences, but it also must have room to spare for long-term goals.

If you’re buying with your spouse with an intention to grow your family, take into consideration the number of children you plan to have (and when), the distance of prospective homes from good schools, and the amenities available in the neighborhood. If your career is at the forefront of your life for the next 5 to 10 years, envision your career’s trajectory and consider public transit options and commute times from home to your workplace.

Outgrowing a house in less than five years’ time would necessitate uprooting the entire household. You’ll have to go through the whole rigamarole of moving again. You must have enough foresight to ascertain you and your family’s future needs. This way, it would be easier to find a home where you can grow and thrive for years to come.

Rushing the house-hunting process

A hot market like Santa Cruz can whip homebuyers up into a frenzy. In the rush to snap up a property in a certain area, you might be swayed into choosing the first house you view even if it’s not exactly what you really want. Take the time to shop around and look at other options. Checking out several houses for sale around the neighborhood can give you a better idea of the area’s average property value.

There’s no set number as to how many houses you should view but touring multiple listings would mean more points of reference to consider when it’s time to make the big decision. Of course, take into consideration your schedule especially if you are actually in a rush to buy a home. (Read more about common house-hunting mistakes here.)

Stretching the budget

A big, luxury home might become nothing more than a gilded cage if it costs way beyond the budget you’ve set. While it may have great investment potential, it will ultimately feel like a burden if you’re struggling to make ends meet after the purchase.

Needless to say, homeownership is a huge responsibility, and with responsibility comes expenses. Monthly mortgage payments, insurance fees, taxes, and utilities are but a few of the regular payments you need to make to maintain and enjoy your home.

Don’t let a dream home turn into a nest of regrets and resentment. Overextending finances can empty out emergency funds, or worse, end in foreclosure. Stick with a realistic budget and choose a more modest house with less strings attached if needed.

Making a lowball offer

Making an offer that is deliberately lower than the selling price is a tricky tactic to play. On one hand, the seller might actually consider the offer, but on the other hand, they might dismiss the bid completely.

Santa Cruz is a seller’s market, which means sellers have the upper hand.  Because of the staunch competition, buyers often become desperate to outdo each other, ultimately resulting in a bidding war.

Making a lowball offer when the current climate fuels all-out bidding wars can be counterproductive, to say the least. Sellers will be able to call out a buyer’s bluff and might end up distrustful of succeeding offers. As much as possible, keep close to the original listing price and include add-ons to your offer, such as waived contingencies.


Even the rising tide of house prices can’t dissuade potential homebuyers from wanting a slice of Surf City. Despite the low inventory and competitive prices, homes typically sell after staying in the market for 43 days.

If you want to sell your home fast, an experienced real estate agent has plenty of tricks up their sleeve to drum up more interest for your property.

Price it right

Overpricing a property can scare off potential buyers. Pricing it too low, meanwhile, can leave you with the shorter end of the stick. To ensure that a property is priced right, study the comparative market analysis (CMA) your Realtor prepared. This will help you arrive at a figure that’s realistic for the area and reflective of your property’s market value.

Pricing just below is a popular strategy commonly practiced in the industry. A $500,000 house, for example, is better off with a $499,000 price tag. Odd-even pricing has a proven psychological effect on buyers, resulting in lower price perceptions and higher sales.

Take care of repairs

Not a lot of people would want to buy a major fixer-upper. Those who do will likely haggle for a discount for having to deal with the inconvenience.

Loose tiles, leaky faucets and chipped walls are minor defects that can deter interested parties. You would need to shell out funds to fix these short-term home improvements, but they could also result in a high return of your investment. Shouldering the repair costs for these quick fixes can immediately increase the property’s appraisal value and catch the eye of potential buyers.

Stage the home for success

Home staging is designed to highlight the house’s best features and impress potential buyers upon first look. The visual impact is so effective that staged homes spend 90% less time on the market and tend to sell for more compared to those that aren’t.

Staged houses undergo deep cleaning and decluttering, with the goal of making it look lived in but brand new. Professionals then transform the interiors with trendy furniture, art, and home accessories. Personal items and pictures are removed from the premises in order to encourage the buyer to imagine the space as their own.

Some home stagers may even go beyond visual styling and attempt to engage all five senses. Playing calming music, lighting scented candles, and putting out freshly baked cookies can create a warm, comfortable atmosphere that’s meant to feel like home.

Accommodate requests

It’s hard to turn down a good deal. In order to convince the buyer to close the sale, consider going the extra mile to accommodate their additional requests and offer financial incentives. For instance, you can include furniture or art you can part with to the sale. You can also offer to cover all closing costs. which include property taxes, title insurance, loan origination fees, inspection fees, and appraisal fees.

Furthermore, you can do your part to sweeten the deal by adjusting your schedule to fit the buyers’ move-in timeline. Go over all of your options carefully and only offer incentives you can fulfill.


For home buyers

    • Do consider the neighborhood. As people often say, when it comes to real estate, it’s all about location, location, location. A house might come with marble floors and an enormous lap pool, but its location dictates its true value and your enjoyment of the home.


    • Don’t waive the house inspection. Take advantage of the due diligence period and conduct a thorough property inspection with a professional. Spotting red flags early on can save you money in the long run.


    • Do consider paying with cash. If you can, consider making a cash offer instead of securing a loan. Sellers will find this offer more attractive since it eliminates the risk of a financial fall-through and hastens the closing period.


    • Don’t splurge on a big purchase before closing. Lenders keep an eye out for sizable transactions that can seriously dent finances. Irresponsible spending can throw off your debt-to-income ratio and may cause your application to fall through.


For home sellers

  • Do make sure all documents are in order. The state of California requires the following documents to sell a house:
    • Purchase Agreement
    • Closing Statement
    • Signed Deed
    • Bill of Sale
    • Affidavit of Title

To ensure there are no issues such as title claims or missing deeds, prepare the important paperwork necessary even before escrow opens.

  • Don’t try to do everything on your own. Some sellers opt to handle transactions on their own because they are wary of shelling out for professional fees and commissions. Contrary to this, a real estate agent can actually keep you from making more costly expenses by offering their market expertise.
  • Do treat it like a business transaction. No matter how attached you are to your old house, hanging around open houses or private viewings can prevent buyers from expressing their honest opinions about the property. Be objective and let your Realtor handle all buyer-facing steps.
  • Don’t hide major house issues. Hiding defects won’t make it go away. Divulge property issues from the get-go before it gets uncovered during the inspection. California law obligates sellers to disclose any known defects to interested buyers.

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With a Realtor like Amber Melenudo by your side, you can explore real estate in Santa Cruz, CA smoothly. A Santa Cruz County resident for 20+ years, Amber knows the ins and outs of the local housing market from both buying and selling perspectives.

Connect with Amber today at 831.566.2263 or send her an email to learn more about your options in Santa Cruz County.