5 Real Estate Closing Pitfalls in Santa Barbara
- Posted on: Oct 1 2025
During the sale of a home, both the purchaser’s and seller’s ultimate goal is to reach the closing. However, the buyer could run into problems that they must resolve, or the seller may need to fix issues that could threaten the closing. Whether you are buying or selling property in Santa Barbara or Ventura, there are local issues that you must also keep in mind.
Pitfalls in the residential closing process are not uncommon, but they are potential roadblocks to completing the transaction. The Law Offices of Brian L. Fox, ALPC is ready to work with you to clear any hurdles so you can move forward.
Pitfall 1: Financing Problems
The buyer will likely need financing to complete their real estate purchase, but this area presents the single most common obstacle to closing. Although a mortgage pre-approval can give the purchaser an idea of what sort of house they can afford, it is not a final guarantee of loan application approval. These are some common issues:
- Applicants not being upfront with loan officers about outstanding tax liens and other debts and liabilities
- Changed financial situation from the time of pre-approval to the closing date, like a job loss
- Acquiring a new debt while the application is being processed, for instance by financing a new vehicle
- Errors and discrepancies in the purchaser’s credit reports
The best way for the purchaser to avoid these problems is to be honest with the loan officer, maintain their financial situation without acquiring new debt, and make sure all credit reports are accurate. Talk to our Santa Barbara real estate lawyer for assistance.
Pitfall 2: The Property Appraisal is Lower Than Expected
Lenders do not like to approve loan applications for more money than is necessary to purchase a home. The appraised value of the home will determine its fair market value, and therefore affect how much the lender will approve. If the appraisal on the Santa Barbara home comes in lower than expected, the lender may deny the loan application.
Buyers have options to resolve this problem, including:
- Asking the seller to lower the price of the home
- Paying out of pocket to account for the difference between the appraisal value and purchase price
- Challenging or asking for a review of the appraisal
Pitfall 3: Unexpected Property Damage
Properties in Santa Barbara are susceptible to many different types of problems that may cause damage, including:
- Severe storms and flash flooding
- Persistent rain that can cause roof leaks, foundation problems, and basement seepage
- HVAC condensation due to heavy humidity
- Poor drainage
- Plumbing and sewage issues, especially in older homes
These and other issues will affect the value of the property, so the buyer will need to conduct a thorough inspection prior to closing. If the purchaser uncovers problems, however, then they and the seller will need to work out a resolution. A real estate lawyer serving Santa Barbara and Ventura can help you address these matters, regardless of which party to the deal you are.
Pitfall 4: Zoning Problems
Like other municipalities, Santa Barbara has its own zoning rules that control matters such as architectural integrity, home expansions, and renovations. Sellers and buyers must be aware of these. If the seller violates the local zoning code, it could make the property unmarketable; conversely, the buyer will not want to purchase property with any code violations.
Prior to listing your property for sale, or signing a purchase agreement with the seller, you should consult an attorney. A real estate lawyer who works in Santa Barbara will understand the relevant zoning rules and make sure they don’t delay closing.
Pitfall 5: Permit Problems
If you are building in a coastal zone, you must obtain a De Minimis Waiver, Coastal Development Permit, or Coastal Development Permit Requiring A Public Hearing. On the other hand, a seller can sell a home that has unpermitted work, but they may need to take remedial steps. These could include obtaining a retroactive permit.
Either way, coastal and other types of permits could delay the closing and cause financial problems for the buyer and seller. Some practical ways to prevent or remedy these issues include:
- Make sure you, as the seller, hire a licensed contractor to do any work on your home
- Apply for any retroactive permits that may be necessary before you sell your home
- Correct any code violations uncovered during inspection
- Contact Santa Barbara Building & Safety with any questions
Working With You to Complete Your Real Estate Deal
Sellers and buyers alike want a smooth process so they can move towards the closing date with confidence. But if you encounter any challenges along the way, let the real estate legal team of The Law Offices of Brian L. Fox, ALPC assist you. Call or complete our online contact form to get started today.
Posted in: Real Estate
