TIC’s- What are they, really?

Aashiyana Shroff

Picture this…. a one-bedroom newly-renovated home in Pacific Heights with parking, listed at $750,000. No, not a dream, this gem has been on the market for nearly a year. 

What’s wrong with it then?

Well, absolutely nothing – this property, and many, many others in the city are TICs. 

Totally in Contract?

Timing in Contingency? 

Title in Contest? 

No, no and no.

Tenancy in Common – the 3 most special words in the SF real estate market, ignore everything you’ve heard prior to this, Truth in Candor.

First the facts, TICs are a form of home ownership. They were created in the ’80s as an affordable alternative to increasing housing prices. 

Why the hesitation? There are urban myths and hearsay around this, with a good measure of misinformation. TICs are sort of like Tom Cruise – very misunderstood and commonly talked down on. 

In a nutshell you generally get more bang for your buck with a TIC.One of the major differences between a regular condo and a TIC is the financing. TIC financing used to involve group loans where everyone shared one loan.

A helpful analogy is a chest of drawers vs wardrobe. 

In the old days, getting into a TIC was like getting into a wardrobe with a group of people – everyone was on the same loan, so if your neighbor missed a payment you were on the hook for it. Not a fun wardrobe to be in. 

Nowadays, we have Fractional Financing, this is like a chest of drawers – each unit has its own separate loan – a separate drawer if you will – close but apart. Aren’t those the best relationships? 

Currently there are five lenders in this space – Bank of San Francisco, Bank of Marin, Redwood Credit Union, NCB, Sterling bank and Trust. (Of course we have our favorites which we are happy to share privately).

Now for the clever bit.

In a recent sales comparison between TICs vs Condos, 1701 Grove Street was a top-floor, two-bedroom one bathroom unit in the heart of NOPA with laundry and parking which sold for $995,000.

The condo equivalent of this at 133 Ashbury Street sold for $1.325 M, also a 2 bedroom, 1 bathroom with in unit laundry and one parking space!

That’s a significant difference in price for essentially the same physical product.  I know that sounds very practical – and yes, that organic avocado at Whole Foods tastes the same as the one from Trader Joe’s. So be a smart shopper – make your mother proud!

There are more than 50 active TICs on the market right now waiting to be loved and understood. 

The TIC vs Condo argument is like comparing vanilla extract with vanilla flavoring – they feel, smell and taste the same as the real deal – it’s ultimately the cost that’s different. 

Aashiyana Shroff is a buyer’s agent at Elevation Real Estate, San Francisco.  She’s lived in 3 continents, and has a restaurant list to prove it! Elevation Real Estate will not only find/sell your home, but make you laugh and enjoy it along the way !

For more information on buying or selling in the Bay area contact her on [email protected]