Checking T.I.C. Sold Prices for 2-Unit Buildings is a Tricky Treat

Monday, October 27th, 2008 @ 5:03 pm | Buyers, Market Trends, San Francisco, Sellers

Beware of the trickiness of selling or buying 2 units vs. TICsIn San Francisco, if a 2 unit building is being sold as 2 “vacant” units with no past tenant issues – the highest possible price for a Seller is to sell to two owner-occupier Tenant-In-Common (TIC) Buyers with both TIC Buyers looking for the upside potential of condo converting the property after one year of?owner-occupier TIC ownership.

 

As a Seller’s agent, I would market the property 3 ways to attract 2-TIC Buyers, investors, and owner-occupiers with an income producing unit:

  1. Two separate TIC units with two distinct “for sale” prices for each of the 2-units in the building.
  2. One 2 unit building with combined for sale prices of the 2-TIC units in the building.

What gets tricky is how a Seller’s agent reports the sale prices accurately on the MLS at the close of escrow without reporting all three sales prices (i.e. the 2 TIC sale prices and the one 2-unit building).

Many times, I see with the San Francisco MLS, seller s agents reporting that their 2-unit property was withdrawn from the MLS and the 2-TICs are reported as sold on the MLS with two sales prices.

And then, many of these?online public websites show the property s sales price from the public records as a 2 unit building sold while other websites will show that there were 2 sales at on the property, yet not differentiating whether these two sales were condos or TICs sales.

Thus a 2-unit vs. the TIC market analysis both become rather complicated to determine whether a property is over or under valued to the for the unlearned, the novice, or misinformed.

The treat is understanding the value of buying a 2 unit building and the upside potential of buying in this market.

 

 

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