Shopping in San Francisco and not sure whether a TIC or a condo is the better fit? You are not alone. The differences affect your loan options, monthly costs, resale, and even how decisions get made in your building. In a few minutes, you will understand each option in plain English so you can choose with confidence. Let’s dive in.
What you actually own
Condo basics
A condominium is a legally separate unit that you own in fee simple, plus a shared interest in the common areas. Your building is a “common interest development” governed by California’s Davis‑Stirling Act with recorded CC&Rs, bylaws, and an HOA. This structure creates clear title for each unit and standardized rules for disclosures, reserves, and meetings.
TIC basics
A Tenancy‑in‑Common (TIC) is fractional co‑ownership of the entire property. You own an undivided percentage of the whole building, and a private TIC agreement assigns you exclusive use of a specific unit. That agreement sets the rules for maintenance, voting, transfers, buyouts, and dispute resolution.
Why it matters
- Title and resale: Condos have individual parcels, which makes sales and financing more straightforward. TICs record percentage interests and rely on a private contract, which can add complexity.
- Legal protections: Condos fall under Davis‑Stirling with built‑in consumer disclosures. TICs are contract driven, so protections depend on the strength of the TIC agreement.
- Governance: Condo HOAs follow statutory procedures. TIC owners follow what is written in the TIC agreement.
Financing in San Francisco
Condos: broader options
Condos usually qualify for a wide range of loans, including many conventional options. Lenders look at the project’s financial health, reserves, insurance, and owner‑occupancy. When a project meets guidelines, financing tends to be smoother and faster.
TICs: portfolio lenders and down payments
Many mainstream lenders do not treat TICs like standard condos. Buyers often work with portfolio or specialty TIC lenders. Expect a narrower lender pool, potentially larger down payments, and sometimes slightly higher interest rates. Lenders review the TIC agreement closely and may require certain provisions before issuing a loan.
How financing affects your offer timeline
TIC approvals usually take longer because lenders must review the legal agreement, insurance, and title details. Some government loan programs are restrictive for TICs. If a TIC is on your radar, get pre‑approved with a TIC‑savvy lender before you write an offer so your timeline and terms stay competitive.
Resale and marketability
Who buys condos vs TICs
- Condos: Appeal to the widest buyer pool, including many investors and buyers using standard loan programs. That liquidity often supports stronger pricing and faster sales.
- TICs: Attract a smaller, more specialized pool of buyers who understand the contract and financing. A narrower audience can translate to longer days on market and possible pricing discounts compared to similar condos.
Conversion to condo in SF
Some buyers hope to convert a TIC to condos later. In San Francisco, conversion is legally possible but can be complex and costly. You may need surveys, legal mapping, building upgrades, and city approvals. Success depends on strong owner cooperation and compliance with local rules. Do not assume automatic or easy convertibility.
Monthly costs and governance
Condos: HOA dues and reserves
Condo owners pay monthly HOA dues that fund maintenance, building insurance, and reserves for future repairs. Davis‑Stirling requires certain financial disclosures, and many HOAs complete reserve studies so owners can plan for assessments and repairs.
TICs: shared costs and contracts
TIC owners share operating costs under the TIC agreement. Shares can be equal or proportional to ownership. There is no default statutory reserve requirement, so the agreement should spell out how reserves and special assessments work. Administrative tasks, like bookkeeping or a manager, are handled as the owners agree.
Insurance overview
- Condos: The HOA typically carries a master policy for the building. You carry an HO‑6 policy for your interior and personal liability.
- TICs: Insurance varies by agreement. Some buildings carry a master policy, while others require specific endorsements in each owner’s policy. Confirm exactly what is covered before you commit.
Quick decision framework
Use this checklist to match your needs to the right structure:
- Financing flexibility: If you want access to standard loan programs, a condo is usually more straightforward. If you have a larger down payment and a TIC‑ready lender, a TIC can work.
- Resale goals: If you value a broad buyer pool and easier resale, consider a condo. If you plan to stay long term and are comfortable with a smaller audience at resale, a TIC may be fine.
- Governance style: If you prefer standardized rules and disclosures, choose a condo. If you are comfortable relying on a private contract and owner cooperation, a TIC can be a fit.
- Cost predictability: If you want regulated reserve practices and consistent financial reporting, condos provide more structure. For TICs, read the agreement closely to understand reserves and assessments.
- Conversion plans: If future condo conversion is important, research feasibility and owner alignment early. Expect cost, time, and detailed coordination.
What to review before you write an offer
For TICs: must‑have documents
- Full TIC agreement and any occupancy or unit allocation exhibits
- Any recorded declarations, easements, or liens
- Owner meeting minutes for the past 2–3 years, current operating budget, bank statements for shared accounts, and any reserve policy
- List of current lenders and any mortgages on the building
- Insurance policies and proof of premium payments
- Any rights of first refusal, transfer restrictions, or buyout formulas
- Evidence of owner occupancy vs tenant occupancy
- Title report for the property and each owner’s interest
For condos: must‑have documents
- CC&Rs, bylaws, and building rules
- Recent HOA meeting minutes, annual budget, and latest reserve study
- Insurance declarations and any known or pending special assessments
- Any current or pending litigation
- Current HOA dues and any planned increases
Pros to involve early
- A San Francisco agent experienced with TICs and condos
- A lender who actively finances TICs if you go that route
- A real‑estate attorney to review the TIC agreement and conversion questions
- A title company familiar with TIC title endorsements
- An insurance agent who understands master policies and condo or TIC endorsements
San Francisco neighborhood context
TICs are common across older multi‑unit buildings in several neighborhoods, including parts of Noe Valley, the Mission, the Castro, and the Inner Sunset and Sunnyside areas. You will also find plenty of traditional condos across the city. Pricing and demand vary block by block, so compare apples to apples on size, condition, and location, then layer in financing and governance differences before deciding.
Simple side‑by‑side summary
- Ownership: Condo owners hold a separate unit plus a share of common areas. TIC owners hold a percentage of the entire property with exclusive use of a unit defined by contract.
- Financing: Condos fit more standard loan programs. TICs often use portfolio or specialty lenders with larger down payment expectations.
- Resale: Condos draw a wider buyer pool and often sell faster. TICs can take longer and may trade at a discount compared to similar condos.
- Monthly costs: Condos pay HOA dues with regulated disclosures and often formal reserves. TIC costs follow the private agreement, which can be flexible but requires careful review.
- Risk profile: Condos provide more standardized consumer protections. TICs rely on the quality and clarity of the TIC agreement.
Final thoughts
There is no one right answer for every San Francisco buyer. If you want financing flexibility, predictable governance, and a broad resale audience, a condo is often the better fit. If you have a larger down payment, plan to stay a while, and are comfortable with contract‑based governance, a TIC can open doors to more neighborhoods and price points. When you are ready to compare real properties, connect with a local advisor who can walk you through the documents, financing, and market context.
If you want a calm, clear path through the details, reach out to Michelle Kennedy for a personal consult. You will get practical, step‑by‑step guidance tailored to your goals and budget.
FAQs
What is the key difference between a TIC and a condo in San Francisco?
- A condo is a separate legal unit with HOA governance under Davis‑Stirling, while a TIC is a fractional share of the whole property governed by a private TIC agreement.
Can I use a standard mortgage to buy a TIC in San Francisco?
- Often not. Many TICs require portfolio or specialty lenders, and you may need a larger down payment compared to a typical condo loan.
Are TICs always cheaper than condos in San Francisco?
- Not always. Some TICs price lower due to a smaller buyer pool and financing friction, but true value depends on location, size, and condition.
How hard is it to convert a San Francisco TIC to condos?
- Conversion can be complex and costly, needing owner cooperation, mapping, upgrades, and city approvals. Do not assume easy or automatic conversion.
What documents should I review before making a TIC offer?
- The full TIC agreement, meeting minutes, budgets, insurance, title reports, any transfer restrictions, and details on existing loans and reserves.
Who should be on my team for a TIC purchase in San Francisco?
- An agent with TIC experience, a TIC‑savvy lender, a real‑estate attorney, a title company familiar with TIC endorsements, and an insurance professional.
