If you've been closely watching the Santa Cruz homes for sale arena lately, you’ll agree that while it's largely exciting, it is also a bit tricky. Families love this area for its energetic community and fantastic ocean scenery. With solid infrastructure and great amenities, like top-notch schools and healthcare facilities, it’s no wonder many people want to settle here. Plus, being just a hop away from Silicon Valley means plenty of job opportunities in the tech industry. Whether you’re looking for a place to raise a family or just want to enjoy the beautiful surroundings, Santa Cruz has so much to offer!
But this high demand means there are often bidding wars, and homes for sale go off the market quickly. To ensure you get your dream home in this lively market, we’ve created 7 key tips for Santa Cruz, California.
Inside this Article:
1. Get Pre-Approved for a Mortgage
Once you get a mortgage pre-approval, you’re way ahead of many other buyers. In the tough Santa Cruz housing market, a typical seller will likely choose buyers who seem ready with their finances. A pre-approval letter indicates that lenders have reviewed your financial background, which helps sellers trust that you can go through with buying the home.
Additionally, understanding the cost of a home appraisal is crucial. A typical appraisal in Santa Cruz can range from $300 – $700, depending on the property's size and complexity. Knowing this upfront can help you budget, know what to include in your offer, and plan your finances more effectively as you navigate your options for houses for sale in Santa Cruz, CA.
2. Understand the Local Market
Crafting a great offer can feel overwhelming, especially with all the metrics floating around. However, you do not need to drown yourself in data; just a few indications can come in handy when making an offer that stands out:
- Housing Inventory in the area: This is a big one. If supply is low, it should be a wake-up call for someone considering making a lowball offer. In a tight market, properties that fit your needs might not return anytime soon, so you may need to put forth your best offer immediately.
- Days on the Market (DOM): Timing is everything in the Santa Cruz real estate market. If you think it is a seller’s market, unreasonable hesitations can be a huge deal-breaker. If properties are flying off the market, you must act quickly. On the flip side, if properties linger, you may have more room to negotiate for a better deal.
- Listing vs. Selling Price: Understand how homes in the area are selling compared to their asking prices to see how it can give you a competitive edge. If homes for sale are often taken at a price above the list price, then your best bet is to target properties priced below your maximum loan limit. The strategy can boost your chances of making a strong offer.
- Assessing the Competition: If you find yourself up against many all-cash offers, then you must strategize well. Think deeply about what can be included in your offer to make it more appealing, like reducing contingencies or offering a quicker closing.
- Number of Offers Before Acceptance: It can be tricky when your offers are turned down. To ease your concerns, consider asking the seller if they’re willing to share how many offers other buyers have made before being accepted.
Lately, the real estate scene in Santa Cruz has been really lively. By October 31, 2024, the average sale price of homes in Santa Cruz was approximately $1,495,175, while the median price was $1,325,000. This shows that sellers are optimistic, making the market more competitive!
Interestingly, 41.6% of homes are being sold for more than their asking price, showing that many people want to buy in this beautiful coastal area. At the same time, 43.7% of sales are happening below the list price, which means there’s some bargaining going on between buyers and sellers. Homes for sale in Santa Cruz are also moving so quickly. The average time to reach a pending sale is approximately 40 days, meaning desirable properties don’t stay on the market for long! It means if you want to do well in the Santa Cruz housing market, plus its neighborhoods like Watsonville and Los Gatos, it’s vital to keep track of the latest trends in prices and bidding strategies and act fast. When you find a home for sale in Santa Cruz, CA, that meets your criteria, just be among the first to place an offer.
However, understand that seller expectations and home prices can change a lot from one neighborhood to another, especially if you’re still figuring out where you want to settle in Santa Cruz. Knowing what similar properties are going for and how they’re being received will give you an advantage when you find that perfect home. The more informed you are, the more confident you’ll feel when it’s time to make your decision.
3. Price Your Offer Competitively
Setting the right price for your offer matters most in a bustling market like Santa Cruz. In this county, houses often sell for more than what the sellers originally asked, so it’s crucial to think about making a solid offer from the beginning. Take some time to look into homes that are similar to the ones you’re interested in, and check out recent sales to find a good price that fits the current market. When you make a careful offer, you highlight the real value of the home and play a role in negotiations. While searching for homes in Santa Cruz, keep track of the latest sales trends to see which offers have worked and which homes sold for more than their asking prices.
4. Limit Contingencies
Reducing the number of conditions in your offer can make you stand out as a buyer, especially in a tough market like Santa Cruz. Sellers usually like offers that have fewer strings attached. It might help to keep your home inspection contingency for your security, but you could think about giving up the appraisal contingency if you're okay with the risks that come with it.
However, the key is to strike the right balance. Carefully consider what protections you might be sacrificing. Discussing your strategy with your real estate agent, who can provide valuable insights on which contingencies to keep and present a compelling offer while safeguarding your interests, is wise.
5. Increase Your Earnest Money Deposit (EMD)
Earnest money, which some people call a good faith deposit, is like a promise that you’re truly interested in buying a house. It’s a specific amount of cash you put down to show you mean business about the property. You usually pay this when you sign the purchase agreement or sales contract. This action tells the seller you are serious, especially in a market where most people are trying to buy. It builds trust and can make your offer look better.
While the EMD can be as low as 1%, 3% is standard, and 5% or more of the purchase price can set your bid apart in competitive situations. However, ensure that your earnest money is refundable in case of contingencies you choose to keep. It enhances your credibility and signifies your intent to move forward quickly, which is often appealing in the fast-paced Santa Cruz house-for-sale market.
Apart from the earnest money deposit, it’s an excellent idea for those looking to buy a home to consider making a bigger down payment, especially in a competitive market. A larger down payment shows that you’re in a solid financial position, which can help sway sellers in your favor. If you can pull from your savings for this, you’ll have to borrow less and could even qualify for a larger loan if necessary. Overall, a solid down payment can give you an edge in a crowded housing market.
6. Stay Flexible with Closing Dates
As you hunt for a home in Watsonville, Scotts Valley, Los Gatos, or any Santa Cruz homes home for sale—and across California and beyond—being flexible can elevate your offer. Many sellers have their own timelines for personal reasons, like relocating or starting a new job. Your offer will catch their eye if you are ready to adjust to what works best for them.
Make sure to clearly express your flexibility in your offer and be prepared to negotiate. In the fast-moving Santa Cruz real estate scene, showing that you can align with the seller’s schedule can set your bid apart. It demonstrates that you’re eager to buy and mindful of their situation, which can help create a positive rapport.
7. Work with a Local Agent Who Truly Understands the Santa Cruz Homes for Sale Market
Working with a local realtor who understands the Santa Cruz property market can make a huge difference. A good agent knows about the best neighborhoods, smart pricing tactics, and what’s happening in the market. They can help you create a firm offer that stands out.
Also, local agents usually have good connections with other agents and sellers, which can help you during negotiations. So, if you’re looking for a Santa Cruz home for sale, consider working with a local realtor who knows the Santa Cruz real estate market well. Their knowledge can help you on your journey to buying a home!
Winning in the fast-paced Santa Cruz housing market requires some careful planning, a strong strategy, and sometimes a personal touch. By using these 7 helpful tips, you can improve your chances of finding the perfect home in one of California's most sought-after areas. However, the Santa Cruz real estate scene can be more complicated than it looks, so having a local expert like Paul to guide you can be super helpful!
Paul Burrowes, CRS, CCEC, SFR, NHCP, LHC, REALTOR® Licensed REALTOR® with over 15 years of experience and expertise. Commits to being on time and transparent. Acts as your consultant to ensure you make the best decisions to fit your transaction at every step in the process. Negotiates towards a low-stress, win-win outcome. Handles all the details for you, ensuring the hundreds of steps in your real estate transaction go smoothly. Proudly serving Silicon Valley, Santa Cruz, Monterey, and Santa Clara Counties! | DRE# 01955563 | (831) 295-5130 | paul@burrowes.com |
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