San Francisco

San Francisco's residential market is small (about 47 square miles, roughly 380,000 housing units), expensive, and structurally distinctive in three ways. The transfer tax is among the highest in the country at the higher price tiers, up to 6% on transactions above $25M. Tenancy-in-Common (TIC) ownership sits alongside condo and single-family residential, with its own legal structure, financing market, and price tier. And rent-control rules under the local ordinance and California's Costa-Hawkins Rental Housing Act materially constrain what sellers can do with tenant-occupied properties.

The northern California / southern California closing-practice split is real here: the buyer customarily pays for the owner's title insurance in San Francisco (where the seller pays in LA), and other small conventions diverge. Otherwise, SF closings follow California escrow-company practice, escrow officer coordinates, no attorneys required.

SF's progressive transfer tax

The transfer tax structure in SF is tiered and substantial:

The tax is customarily paid by the seller. On a $2.5M condo sale, that's $18,750 in city transfer tax alone; on a $7M single-family sale, it's $157,500. The structure means high-end SF transactions face transfer-tax burdens approaching the highest in the country.

What buyers should know

The standard California contract applies. Inspection contingencies run 17 days; financing and appraisal contingencies run through close. SF condos and single-family use conventional residential financing; TICs are different.

A Tenancy-in-Common is shared ownership where multiple buyers each own a fractional interest in a single legal parcel, with a usage agreement assigning each owner exclusive use of a specific unit. TICs developed because SF's strict condo conversion rules made converting multi-unit buildings to condos extremely difficult. The financing market for TICs is small, most major banks won't lend, leaving fractional-loan products from a handful of specialized lenders at higher rates and stricter underwriting. The trade-off is materially lower price-per-square-foot than the equivalent condo.

For older multi-unit buildings, the soft-story retrofit program affects buyers in specific zip codes. The city identified ~5,000 buildings needing seismic retrofits; sellers must disclose retrofit status. Buyers of un-retrofit buildings are typically inheriting a six-figure capital obligation.

What sellers should know

SF sellers face the progressive transfer tax as the largest state-and-local cost beyond commissions. Above $5M, the rate jumps materially; sellers near these thresholds sometimes structure pricing to land just below.

Rent control is the most consequential constraint on tenant-occupied properties. Costa-Hawkins exempts post-1979 single-family homes and condos from local rent-control rate caps, but the local just-cause eviction protections apply broadly. Selling a tenant-occupied property requires understanding what eviction-control protections exist; in many cases, the practical strategy is selling with the tenant in place rather than attempting to deliver vacant possession.

California state cap-gains tax (up to 13.3%) plus federal LTCG plus NIIT (for high earners) produces combined rates above 36% on taxable gain in SF, same as elsewhere in California, but the dollar magnitudes are larger given typical price points.

How closings work

SF closings happen through escrow companies, with the closing typically coordinated by the title company. Documents are often signed remotely via mobile notary. The escrow officer files the city transfer-tax forms with the SF Office of the Treasurer & Tax Collector and records the deed with the SF Recorder's Office.

For TIC transactions, attorney involvement is more common than in standard residential, the TIC agreement (the document governing how the co-owners use, manage, and exit the building) is highly customizable and worth attorney review. The state guide for California covers the broader framework.