Understanding the quantum dynamics of spin defects and their coherence properties requires an accurate modeling of spin-spin interaction in solids and molecules, for example by using spin Hamiltonians with parameters obtained from first-principles calculations. We present a real-space approach based on density functional theory for the calculation of spin-Hamiltonian parameters, where only selected atoms are treated at the all-electron level, while the rest of the system is described with the pseudopotential approximation. Our approach permits calculations for systems containing more than 1000 atoms, as demonstrated for defects in diamond and silicon carbide. We show that only a small number of atoms surrounding the defect needs to be treated at the all-electron level, in order to obtain an overall all-electron accuracy for hyperfine and zero-field splitting tensors. We also present results for coherence times, computed with the cluster correlation expansion method, highlighting the importance of accurate spin-Hamiltonian parameters for quantitative predictions of spin dynamics.