Buying a home in Santa Barbara comes down to six steps: make a plan, line up your funding, search, make an offer, get through escrow, and move in. Escrow usually takes 21 to 45 days, and most local purchases need a jumbo loan.

1. Your plan

Decide your budget, timing, areas and must-haves, and sign a buyer agreement with your agent. California has required a written buyer agreement since 2025.

2. Funding

Get pre-approved before you look. Many Santa Barbara homes need a jumbo loan, meaning a loan above the conforming limit ($941,850 in Santa Barbara County for 2026), which has its own rules.

3. The search

Tour homes and learn the local rules. Two homes a mile apart can differ on fire and flood zones, City or County permits, sewer or septic, and water district.

4. The offer

Your offer sets the price, deposit, loan, contingencies and closing date on the California Residential Purchase Contract. The seller can accept it as written, send a counter offer, or decline. If you don’t reach agreement, you keep looking.

5. Escrow

Wire your deposit, inspect, read the disclosures, arrange insurance and your loan, and remove contingencies by their deadlines (17 days by default). Start homeowners insurance on day 1.

6. Keys & after

You sign, the loan funds and the deed records. Then set up utilities, file your homeowners’ exemption, and plan for the supplemental property tax bill.

By Kathy Henry, Broker Associate · Updated September 2026

Sources: California Department of Real Estate: consumer information

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In Santa Barbara fire areas, homeowners insurance can take weeks and can decide whether a purchase closes on time. Start shopping the day your offer is accepted, or before you write it.

Why start so early?

Your lender needs proof of insurance before closing, and insurers may inspect the home or set conditions such as brush clearance or roof work.

What do insurers look at?

The roof, vents, brush clearance, distance to trees, and the property’s fire hazard zone. Past claims on the home can also matter.

What if no company will insure the home?

The California FAIR Plan is the insurer of last resort. It covers fire, lightning, internal explosion and smoke, but not theft, liability or water damage, so owners usually add a Difference in Conditions (DIC) policy.

When should I have a policy lined up?

Before you remove your investigation contingency, have a policy you can bind with the price and any conditions known.

By Kathy Henry, Broker Associate · Updated September 2026

Sources: California FAIR Plan · CAL FIRE hazard zone map

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When you buy a condo, you buy into the homeowners association too, and its money and repairs become yours. Check the reserves, any special assessments, the board minutes, the balcony inspection and the HOA insurance before you remove contingencies.

Reserves

The HOA’s savings for big repairs. Look at the “percent funded” number in the reserve disclosure; low reserves often mean an assessment or higher dues later.

Special assessments

One-time charges to every owner when reserves fall short. Ask whether any are approved or under discussion.

Board minutes

Read the last 12 months for leaks, lawsuits, insurance problems and dues increases.

Balcony inspections (SB 326)

California requires HOAs with 3 or more units to have wood balconies, stairs and walkways inspected by a licensed architect or engineer, with the first inspection due by January 1, 2025, then every 9 years.

HOA insurance

The master policy covers the building, not your unit’s interior. In fire areas, master policies are harder to get and deductibles are higher.

By Kathy Henry, Broker Associate · Updated September 2026

Sources: California Civil Code 4525: HOA documents a buyer receives

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Downsizing works best when the next home fits the next twenty years, not just the next two. Look for one-level living, check how Prop 19 and the home-sale tax exclusion apply to you, and understand senior-living options before you need them.

What makes a floor plan work as you age?

A bedroom, full bath, kitchen and laundry on the entry level, and at least one entrance with no steps. Easy access to doctors, groceries and downtown matters more over time.

How can taxes help?

Prop 19 lets eligible homeowners 55 and older move their property tax base to a replacement home in California, up to three times. Up to $250,000 (single) or $500,000 (married) of gain on a main home may be excluded from federal tax.

What is a reverse mortgage?

A loan for homeowners 62 and older that turns home equity into cash, or helps buy a new home, with no monthly mortgage payment. You still pay taxes, insurance and upkeep, the balance grows, and it’s repaid when you sell, move out or pass away. A HUD-approved counselor session is required first.

Who should be on my downsizing team?

Usually a CPA, an estate planning or elder law attorney, a financial advisor, a senior move manager, an estate sale company, an appraiser for valuables, an organizer, and movers experienced with seniors, plus your real estate advisor.

What senior-living options are there?

Assisted living, continuing care (life plan) communities, memory care, and care at home. Their costs and contracts differ a lot, so read them carefully and involve an elder law attorney.

By Kathy Henry, Broker Associate · Updated September 2026

Sources: Prop 19 (Board of Equalization) · IRS Publication 523

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A 1031 exchange lets you sell investment or business real estate and buy another property while deferring capital gains tax. You have 45 days after selling to identify the replacement property and 180 days to close, and a qualified intermediary must hold the money in between.

What property qualifies?

Real property held for investment or for use in a business, exchanged for other real property held the same way. Your primary home doesn’t qualify.

What are the deadlines?

You must identify replacement property in writing within 45 days of closing the sale, and close on it within 180 days (or by your tax return due date, if that comes first). The deadlines don’t stretch for weekends or a slow escrow.

Who holds the money?

A qualified intermediary. If the sale proceeds reach you, the exchange can fail.

How do I defer all of the tax?

Generally, buy property of equal or greater value and reinvest all the cash. Your CPA can tell you how this applies to you.

Why plan early in Santa Barbara?

Inventory can be thin and escrows can run long, so it helps to have replacement options in mind before you list your current property.

What happens if I miss a deadline?

The exchange fails. The sale is treated as a regular sale, so capital gains tax, and tax on the depreciation you took, come due for that tax year. The deadlines don’t move for weekends, holidays, a slow escrow or a purchase that falls through; only federally declared disasters can extend them. Your qualified intermediary can generally release the money only at set points, such as after day 45 if you identified nothing, or after day 180. If the sale closed late in one year and the money comes back the next, your CPA may be able to report the gain in that later year.

Can I cancel the sale if I can’t find a replacement?

Not once it has closed. The sale is final, and the 45-day clock started that day. Before closing, you can back out only as your purchase contract allows. Walking away without a contractual right can expose you to a lawsuit or damages, so talk with your attorney first.

How do I lower the risk?

Plan before you list. We can look for replacement properties early, negotiate a longer escrow or a rent-back on your sale, and identify backup properties on your day-45 list. Ask your qualified intermediary about a reverse exchange, where you buy the replacement first: it costs more, but it takes away the 45-day pressure.

By Kathy Henry, Broker Associate · Updated September 2026

Sources: IRS: Like-kind exchanges

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On October 6, 2026, the Santa Barbara City Council unanimously approved new short-term rental rules. In most City neighborhoods, you will not be able to rent a whole home for 30 days or less. Montecito, Summerland and other unincorporated areas follow the County’s rules instead.

Where are short-term rentals allowed?

Inland City neighborhoods: Not allowed in residential zones or high fire hazard areas. They are allowed only in homes in commercial zones that already permit housing. These rules are expected to start in January 2027.

The Coastal Zone: Restricted in single-unit and two-unit residential zones. Homeshares, where you live in the home while renting part of it, are allowed where housing is permitted. These rules take effect only after the California Coastal Commission approves them, likely sometime in 2027.

What are the rules for owners who qualify?

One short-term rental per owner. The owner cannot be a trust or a corporation. The unit cannot have had a long-term tenant in the past two years. Guests must stay at least two nights. Quiet hours run from 10 PM to 7 AM. Current operators will have six months to apply for a license.

What can never be a short-term rental?

ADUs (granny units), deed-restricted affordable or employee housing, live-work units, and manager or caretaker units.

What this means if you are buying

If short-term rental income is part of your plan, treat it as something to prove, not something to assume. Price the home on what it is worth as a primary home or a long-term rental. A home with an existing short-term rental history may not be able to keep operating, and a license may not transfer to you.

How do I check an address?

Use the City’s short-term rental map, and confirm the zone, Coastal Zone status, and license status for the parcel before you remove contingencies.

What about HOAs?

Many condo HOAs restrict or ban short-term rentals, even where the City or County allows them. Read the CC&Rs.

By Kathy Henry, Broker Associate · Updated October 8, 2026

Sources: City STR ordinance page · City Council notice, Oct 6, 2026 · City STR map · County STR rules · Santa Barbara Independent · Noozhawk · KEYT

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Most homes in town are on sewer; many Montecito, Hope Ranch, Mission Canyon and rural homes are on septic. Know which one you’re buying, inspect it, and plan for its care.

How often should a septic system be inspected?

The U.S. Environmental Protection Agency recommends an inspection every 3 to 5 years, with pumping as needed.

Who is responsible for the sewer lateral in Santa Barbara?

The property owner. In the City of Santa Barbara, owners maintain the lateral from the building to the City main, and some remodel permits trigger a required video inspection.

By Kathy Henry, Broker Associate · Updated October 12, 2026

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Before you buy a home you plan to remodel, add on to or rebuild, find out which rules apply: zoning, design boards, hillside and coastal overlays, fire rules and historic review, plus what’s changing now.

Do I need design review to remodel a house in Santa Barbara?

It depends on size. Since May 28, 2026, small first-story additions (up to 800 sq ft under 17 feet), small upper-story additions (250 sq ft or less) and other minor work can be approved by City staff if every standard is met. New homes, new second stories, larger upper-story additions, homes over the City’s size limit and grading over 100 cubic yards or on slopes over 20% go to the full Single Family Design Board.

What is the Hillside Design District in Santa Barbara?

A City design overlay for the foothills and Riviera. Grading on slopes over 20% goes to the full Single Family Design Board, staff approvals are limited on slopes of 15% or more, and extra visuals are required near ridgelines and scenic view corridors.

By Kathy Henry, Broker Associate · Updated October 12, 2026

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Historic status in Santa Barbara mostly affects the outside of a home: exterior changes, additions and demolition go through the Historic Landmarks Commission, while the inside is up to you. In return, owners may qualify for real benefits, including a Mills Act contract that cuts property taxes by 40 to 60 percent on average. Separately, many homes sit in overlay zones (hillside, coastal, high fire, Montecito) that add review steps when you build. Plan for both before you buy.

How do I find out if a home is historic?

Search the address on the City’s Historic Treasures map, which shows whether a historic evaluation is on file. Not every property has been surveyed. If the home is 50 years or older and the map shows nothing, the City’s Architectural Historian can evaluate it from current photos of each side of the house. Evaluations are usually free.

For Montecito, Summerland and other unincorporated areas, ask County Planning. Goleta and Carpinteria have their own rules.

What kinds of historic status are there?

City Landmark: the highest level, designated by the City Council.

Structure of Merit: historically significant, but to a lesser degree. Designated by the Historic Landmarks Commission.

Potential historic resource: any building 50 years or older that hasn’t been evaluated. It must be evaluated before an addition, alteration or demolition, so an unremarkable-looking 1960s home can turn out to be historic when you apply to remodel.

Districts: El Pueblo Viejo Landmark District covers the downtown core, State Street, Cabrillo Boulevard and the area around the Mission. The Brinkerhoff Avenue, Riviera Campus and El Encanto Hotel areas are historic districts. The Mission Area Special Design District and the Lower Riviera Bungalow District have their own design rules.

State and national: a home can also be listed on the California Register or the National Register of Historic Places.

Why would a home be designated, and do I have a say?

The goal is to protect the buildings that give Santa Barbara its character. To qualify, a building must be at least 50 years old, keep enough of its original character, and meet at least one test: a link to important events or people, distinctive design or construction, important historical information, or being a familiar visual landmark in its neighborhood.

The Historic Landmarks Commission can start a designation itself, and an owner or any interested person can nominate a property. The owner and neighbors get notice at least 10 days before the public hearing, and the owner can speak at it. The City’s information sheets do not say the owner must agree. A Structure of Merit decision can be appealed to the City Council within 10 days. If this matters to your plans, ask the City’s Architectural Historian before you buy.

What changes for the owner?

The outside: exterior changes, including window replacement, go to the Historic Landmarks Commission instead of the Single Family Design Board. Minor changes can sometimes be approved by staff.

The inside: not reviewed.

Upkeep: landmarks must be kept in good repair.

Demolition: very limited. For a landmark, generally only after earthquake, fire or similar damage that can’t reasonably be repaired.

What doesn’t change: designation doesn’t change your title, restrict a sale or require public access.

Benefits and what to plan for

The Mills Act: lower property taxes

The City of Santa Barbara’s Mills Act program lets owners of designated historic homes sign a contract with the City for lower property taxes. The City says owners save 40 to 60 percent on average. In return, the savings go toward restoring and maintaining the home.

Contract: 10 years, and it renews automatically each year.

Applying: applications are accepted January 1 to June 30, and you need a meeting with the City’s Architectural Historian by June 1.

Yearly cap: the City accepts contracts only until the total tax savings for the year reaches $260,000, so approval isn’t guaranteed in a given year.

Buying a home with a contract: the contract stays with the property, so you take on both the savings and the work plan. Ask the seller for the contract and the work completed so far.

In Montecito and other unincorporated areas, ask the County whether a Mills Act contract is available.

Tax credits for restoring a historic building

Federal: a 20 percent credit for rehabilitating a certified historic building, but only one that produces income, such as a rental or business property. It doesn’t apply to the home you live in.

California, for homeowners: a credit of $5,000 to $25,000 (20 percent of qualified costs) for restoring a home on the California Register that is your main residence, with household income of $200,000 or less. A new law signed September 27, 2026 (AB 1265) ends this homeowner credit for credits given out from 2027 through 2031. If you’re counting on it, talk to your tax advisor now.

California, for income property: 20 percent of qualified costs, with the state program extended through 2031.

I’m not a tax advisor. Your CPA or tax attorney should confirm what applies to you.

Building or remodeling: the extra layers

Beyond a normal building permit, these layers can apply depending on where the home is:

City design approvals expire after three years unless a building permit is issued (one two-year extension is possible). Goleta and Carpinteria have their own design review.

What this means if you are buying

If you plan to add on, rebuild or change the outside, find out what applies before you remove contingencies. Check the Historic Treasures map and the parcel’s zoning, Coastal Zone and fire zone status. Ask the seller for any historic report, Mills Act contract or past design board approvals. If a remodel is part of your plan, have an architect who knows the local boards look at it early. Review takes time, but plenty of beautiful projects get approved every year.

By Kathy Henry, Broker Associate · Updated October 12, 2026

Sources: City: find out if a building is historic · City Landmark information (PDF) · Structure of Merit information (PDF) · City Mills Act program · El Pueblo Viejo Landmark District · City design review rules (Single Family Design Board, Hillside) · City Coastal Zone review (PDF) · City High Fire Hazard Area requirements (PDF) · County Boards of Architectural Review · California historic credit (FTB 3835, PDF) · AB 1265 (2026) · National Park Service: federal historic tax incentives

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