Thinking about buying near Dolores Park without stretching your budget to the breaking point? In Mission Dolores, many buyers consider a TIC as a path into an iconic, central neighborhood. If you are comparing a TIC to a condo and feeling unsure where to start, you are not alone. In this guide, you will learn what a TIC is, how it differs from a condo, common pros and risks, financing realities, resale considerations, and a practical checklist you can use before you write an offer. Let’s dive in.
What a TIC is, in plain English
A Tenancy in Common, or TIC, is a form of shared ownership. You and one or more co-owners each hold an undivided fractional interest in the whole property. Your name is on title for a percentage share, not for a separately deeded condo unit.
In most TIC buildings, a written TIC agreement grants each owner the exclusive right to use a particular unit and outlines how expenses, repairs, and decisions are handled. Think of three buyers purchasing a 3-unit Victorian: each owns one-third of the property by title and, by agreement, each occupies a specific flat.
The TIC agreement is the key document. It sets voting rules, maintenance responsibilities, how assessments work, rules for selling your share, and what happens if an owner defaults on obligations.
Why TICs show up in Mission Dolores
Mission Dolores has many older 2–6 unit Victorian and Edwardian buildings. Before condo conversions became common, TICs gave residents a way to own in these multi-unit properties. Today, TICs remain prevalent in neighborhoods like Mission Dolores, Noe Valley, the Castro, and Haight-Ashbury.
Because TICs carry added legal and financing complexity, they often sell at a discount compared with similar condos nearby. The size of that discount varies over time and by micro‑location, so comparing current local comps is essential.
TIC vs. condo at a glance
- Ownership structure:
- Condo: You own your individual unit plus a share of common areas. Your unit has a separate deed and parcel number.
- TIC: You own a percentage of the property. Exclusive unit use comes from the TIC agreement, not a separate deed for a unit.
- Documents and governance:
- Condo: Governed by recorded CC&Rs and a homeowners association.
- TIC: Governed by the TIC agreement, meeting minutes, budgets, and any recorded restrictions.
- Financing landscape:
- Condo: Widely financed by conventional lenders.
- TIC: Fewer lenders, stricter underwriting, and often higher down payments. FHA and VA options are generally limited.
- Resale market:
- Condo: Broader buyer pool and financing options.
- TIC: Narrower buyer pool due to structure and lending limits; pricing and time on market can reflect that.
Why some buyers choose a TIC
- Lower entry price. TICs often trade below condo pricing in the same neighborhood, which can open doors to Mission Dolores.
- Classic architecture and space. Many TICs are in character-filled Victorian or Edwardian buildings with generous layouts.
- Owner-occupied feel. Many TIC buildings are primarily owner-occupied, which can support engaged building stewardship.
- Potential for future condo conversion. Some TICs convert to condos over time, which can help marketability. Feasibility varies and depends on local rules and building specifics.
Risks and tradeoffs to weigh
- Financing hurdles. There are fewer lenders that underwrite TIC loans, and terms can be stricter. Expect higher down payments and tighter credit standards.
- Shared liability exposure. If there is a master mortgage on the entire property, owners may share liability for that loan. Even with individual TIC loans, shared financial obligations can exist through the agreement.
- Resale liquidity. The buyer pool for TICs is smaller than for condos. Days on market and pricing can reflect that.
- Transfer restrictions. TIC agreements often include approval rights, rights of first refusal, or buyout rules that can affect timing and terms if you sell.
Financing a TIC in San Francisco
Financing is the biggest practical difference you will feel as a TIC buyer. Many national lenders do not offer TIC loans, and the ones that do often require more conservative underwriting. Specialty lenders and local banks familiar with TICs are common sources.
- Pre-approval is essential. Get pre-approved by a lender experienced in TIC underwriting before you make offers. It boosts your confidence and your negotiating position.
- Down payment and reserves. Plan for 20–30 percent down, depending on lender and your profile, and be ready to show healthy reserves.
- Rates and review. Lenders may price TIC loans as higher risk. They will also review the TIC agreement, title evidence, insurance, and any master mortgage closely.
- Master mortgage vs. individual loans. Some buildings carry one master loan on the entire property with payments allocated among owners. Others allow individual financing secured by each owner’s fractional interest. Understand the structure, your liability, and lender remedies before you commit.
- FHA and VA. These programs are generally oriented toward fee-simple condos that meet project approvals. Most TICs do not qualify unless they have converted to condos or meet program-specific requirements. Always verify eligibility directly with a qualified lender and official program guidance.
Resale and potential condo conversion
- Buyer pool and pricing. TICs serve a narrower buyer audience than condos, which can impact pricing and time on market. The discount relative to condos varies by building, neighborhood, and market cycle.
- Prepare documents early. For a smoother resale later, keep your TIC agreement, budgets, reserve statements, insurance, meeting minutes, and any loan or lien information organized from day one.
- Condo conversion. Some TIC buildings later convert to condos, which can improve marketability. Conversion depends on meeting local and state requirements and on the building’s specifics, including loans and occupancy history. If conversion is part of your plan, review current guidance with the San Francisco Planning Department and consult a local real estate attorney for feasibility.
Is a TIC the right fit for you?
A TIC may be a smart path if you:
- Want to live in Mission Dolores and value lower entry pricing compared with condos.
- Plan to stay put for several years so you are not depending on a quick resale.
- Have strong credit and cash reserves and can work with a TIC-savvy lender.
- Are comfortable with shared governance and can engage constructively with co-owners.
A TIC may not be ideal if you:
- Need FHA or VA financing and cannot confirm program eligibility.
- Want a simple, standalone title and minimal shared liability.
- Aim for a quick flip or need maximum liquidity when you sell.
Your due diligence checklist
Use this list to focus your review before you write an offer:
- Title and recorded items:
- Recorded grant deed showing ownership percentages.
- Any recorded master mortgage or liens.
- TIC agreement:
- How shares and expenses are allocated.
- Maintenance responsibilities and reserve requirements.
- Sale and transfer rules, including approvals and rights of first refusal.
- Remedies if an owner defaults, including possible foreclosure of an owner’s interest.
- Financials and reserves:
- Current operating budget, statements, and reserve balances.
- Recent or planned special assessments and major repairs.
- If a master mortgage exists: terms, remaining balance, lender, and how payments are allocated.
- Lending and pre-approval:
- Pre-approval from at least one lender experienced with TIC loans.
- Written confirmation of TIC-specific terms, and any FHA/VA eligibility if relevant.
- Insurance and risk:
- Master property insurance and any required individual coverage.
- Seismic considerations appropriate for older San Francisco buildings and any retrofit evidence.
- Building condition and permits:
- Past inspections, roof and foundation history, pest/termite reports.
- Permits for prior renovations; identify any unpermitted work.
- Compliance with local codes and any occupancy or tenant issues, if applicable.
- Litigation and governance:
- Any ongoing or past litigation or claims.
- Recent owner meeting minutes and notes on disputes or upcoming projects.
- Resale and conversion readiness:
- Prior evaluation of condo conversion feasibility, if that is a goal.
- Ability to deliver marketable title and full TIC-specific disclosures at resale.
- Professional advisors:
- A local real estate attorney familiar with San Francisco TICs.
- A CPA or tax professional for tax treatment and capital gains planning.
- Lenders and insurance providers experienced in TIC structures.
How a local advisor adds value
Mission Dolores TICs live at the intersection of neighborhood nuance, building history, legal structure, and lender appetite. You want clear guidance on pricing versus condos, realistic financing options, and which buildings are well run.
As a native San Franciscan and advisor who regularly works with TICs, I help you:
- Identify sound buildings and agreements that fit your goals and budget.
- Connect early with TIC-savvy lenders so your offer is strong and timelines are realistic.
- Review documents for the most important operational and financial details.
- Navigate negotiation points unique to TICs, from transfer approvals to assessments.
Ready to explore Mission Dolores TICs with a clear plan? Reach out to Michelle Pender for a private consultation.
FAQs
What is a TIC in San Francisco real estate?
- A Tenancy in Common is shared ownership of a property by fractional interest, with exclusive use of a specific unit defined by a TIC agreement rather than by a separate condo deed.
Can I use FHA or VA loans for a Mission Dolores TIC?
- FHA and VA financing is generally limited for TICs; most TICs do not qualify unless they convert to condos or meet specific program criteria, so confirm eligibility with a qualified lender.
What is a master mortgage in a TIC building?
- A master mortgage is a single loan secured by the entire property, with payments allocated among owners; it can create shared liability, so you must understand terms and remedies before buying.
How do TIC prices compare to condos in Mission Dolores?
- TICs often trade at a discount to comparable condos due to added complexity and financing limits; the size of the discount varies by building and market cycle, so review current comps.
Can a Mission Dolores TIC convert to condos later?
- Many TICs eventually convert, but feasibility depends on local requirements, loans, occupancy history, and building specifics; check current San Francisco guidance and consult a local real estate attorney.
What should first-time buyers review before making an offer on a TIC?
- Focus on the TIC agreement, building financials and reserves, insurance, any master mortgage, inspection and permit history, and obtain pre-approval from a TIC-experienced lender.
