SAN FRANCISCO BUYER’S GUIDE
Navigating One of America’s Most Dynamic Real Estate Markets
San Francisco’s real estate market operates by its own rules. From TIC ownership structures found nowhere else in the country to a tiered transfer tax that can reach 6% on ultra-luxury properties, buying here demands specialized knowledge. This guide equips you with the SF-specific insights you need to purchase with confidence, whether you’re eyeing a Pacific Heights Victorian, a SoMa condo, or a Noe Valley single-family home.
Understand SF Ownership Types: TIC vs Condo vs Co-op
San Francisco has ownership structures you won’t encounter in most other cities. Understanding the differences is essential before you start your search.
The Three Main Structures:
- •Condominium: You receive a deed to your specific unit plus shared interest in common areas. Governed by an HOA under California’s Davis-Stirling Act. Standard conventional financing is available, and FHA/VA loans may apply if the building has project approval.
- •Tenancy in Common (TIC): You own a fractional interest in the entire property with exclusive-use rights to a specific unit, governed by a private TIC Agreement. Financing requires specialized portfolio lenders with larger down payments (20–30%) and potentially higher rates. TICs are typically priced 15–25% below comparable condos.
- •Housing Cooperative (Co-op): Less common in SF, you own shares in a corporation that owns the building, with a proprietary lease for your unit. Financing is more restrictive, and the board must approve buyers.
If a TIC is on your radar, verify whether the building qualifies for future condo conversion. San Francisco’s lottery system caps conversions at 200 units per year with a significant backlog, so never assume conversion will happen.
San Francisco Transfer Tax: What Buyers Should Know
San Francisco imposes one of the highest transfer taxes in California, and the rates increase dramatically at higher price points. While the seller customarily pays this tax, it indirectly affects pricing negotiations and total transaction costs.
SF Transfer Tax Rates (approximate percentages):
| Sale Price | Approx. Rate |
|---|---|
| Up to $250K | 0.50% |
| $250K – $1M | 0.68% |
| $1M – $5M | 0.75% |
| $5M – $10M | 2.25% |
| $10M – $25M | 5.50% |
| Over $25M | 6.00% |
The steep jump at the $5M threshold is significant for luxury buyers. Transfer tax is also imposed on leaseholds of 35+ years and certain legal entity transfers. Exemptions exist for transfers between spouses, inheritances, and gifts.
Property Tax and Proposition 13 in San Francisco
California’s Proposition 13 is one of the most buyer-favorable property tax frameworks in the nation, and it matters enormously in a high-value market like SF.
Key Prop 13 Rules:
- •Property tax is capped at 1% of assessed value (your purchase price) plus local voter-approved bonds
- •Annual increases are limited to 2% maximum, regardless of market appreciation
- •When you purchase, the property is reassessed at current market value (your purchase price becomes the new tax base)
- •Expect a supplemental tax bill after purchase, covering the difference between prior assessed value and your purchase price for the remaining tax year
- •Proposition 19 allows homeowners 55+ to transfer their existing tax base to a replacement property anywhere in California
For a $2M San Francisco purchase, your initial annual property tax would be approximately $20,000 to $24,000 including bonds. This predictability is a significant advantage for long-term owners in an appreciating market.
Financing Your San Francisco Purchase
With San Francisco’s median home price well above the conforming loan limit, most buyers need jumbo or specialized financing. The conforming loan limit for San Francisco County in 2026 is $1,209,750, and anything above requires a jumbo loan.
Financing by Property Type:
- •Condos & Single-Family: Conventional jumbo loans with 10–20% down, credit scores of 700+, and higher cash reserve requirements. Some buildings qualify for FHA/VA if project approval is current.
- •TICs: Portfolio lenders or credit unions offering fractional TIC loans with 20–30% down. No FHA or VA options. Interest rates may run 0.5–1% higher than conventional products.
- •Multi-Unit Buildings: Investment property loans with 25%+ down and different qualifying criteria. Rent control regulations affect income projections and underwriting.
- •Bridge Loans: For buyers who need to purchase before their current home sells. Short-term financing secured against existing equity.
All-cash offers remain common in competitive SF situations. If financing, a strong pre-approval from a lender experienced with SF property types strengthens your offer significantly.
Choosing Your San Francisco Neighborhood
San Francisco is a city of distinct micro-markets, each with its own character, price range, and property mix. Your ideal neighborhood depends on lifestyle priorities, commute patterns, and what type of property appeals to you.
Notable Neighborhoods:
- •Pacific Heights & Presidio Heights: Grand Victorians and Edwardians, sweeping Bay views, among SF’s highest price points. Predominantly single-family homes and luxury condos.
- •Noe Valley: Family-friendly with Victorian single-family homes, sunny microclimate, and village-like commercial corridor along 24th Street.
- •Marina & Cow Hollow: Popular with young professionals. Mix of condos and flats with proximity to the waterfront and Chestnut/Union Street shopping.
- •Russian Hill & Telegraph Hill: Iconic city views, walkable to North Beach and downtown. Mix of condos, TICs, and co-ops in historic buildings.
- •Hayes Valley & NoPa: Trendy and walkable with boutique shopping. Higher concentration of TICs in converted Victorians. Strong appreciation trajectory.
- •SoMa & Mission Bay: Modern condos and high-rises, proximity to tech employers, newer construction with amenity buildings. Lower price-per-sqft than northern neighborhoods.
Explore our San Francisco neighborhood guides for in-depth profiles of each area, including market trends and available listings.
Due Diligence: What to Inspect and Review in SF
San Francisco has disclosure and inspection requirements that go well beyond the standard California checklist. Thorough due diligence protects your investment and avoids costly surprises after close.
SF-Specific Due Diligence Checklist:
- •3R Report: Review the property’s building permit history for open or unpermitted work
- •Seismic Safety: Check if the building is on SF’s soft-story retrofit list and verify compliance status
- •Natural Hazard Disclosure: Earthquake fault zones, liquefaction zones, flood zones, and fire severity areas
- •Lead Paint (Pre-1978): Federal disclosure required with a 10-day inspection window unless waived
- •For TICs: Full review of TIC Agreement, master mortgage structure, insurance coverage, reserve funding, and co-owner financial stability
- •For Condos: CC&Rs, HOA budget, reserve study, pending assessments, litigation history, and owner-occupancy ratio
- •Sewer Lateral: Older homes may require sewer lateral inspection or certification depending on the utility district
- •Knob & Tube Wiring: Many insurers decline coverage for homes with active knob and tube systems. Budget for removal if present.
Use the SF Planning Department’s Property Information Map to check permits, zoning, and enforcement history on any property before making an offer.
Rent Control and Multi-Unit Considerations
If you’re purchasing a multi-unit building or a property with existing tenants, San Francisco’s Rent Ordinance is a critical factor.
- •Rent control covers most units built before June 1979. Existing below-market tenancies transfer with the property.
- •Owner move-in evictions are permitted under strict rules but require relocation payments (currently several thousand dollars per tenant) and restrictions on future re-rental.
- •Condo conversions with rent-controlled tenants face additional protections: protected tenants (seniors 60+, disabled, families with children) have rights to lifetime leases.
- •Buildings built after June 1979 and single-family homes are generally exempt from rent control, though some local rules may still apply.
Always review existing tenant leases, rental history, and any prior eviction notices before purchasing a multi-unit property in San Francisco. Rent-controlled tenancies can significantly impact property value and your intended use.
This guide provides general information about San Francisco real estate. Every situation is unique — consult qualified real estate, legal, and financial professionals for advice tailored to your circumstances.
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