Benefits- typically less expensive than a Condo, Dramatically less closing costs
Disadvantages- usually require anywhere from 10-20% downpayment, COOPs tend to have a Flip Tax when selling (ranges per Coop), harder to sell due to board approvals which in most cases are required
Coop's usually require a % down at closing (typically 10-20%). Except for Sponsor/ owner of unsold shares units, you have to interview before a board. Although you can purchase title insurance, this is actually rare and all that is required is a lien search.
Condo's can be purchased with many different variations on loans and as a result DP's. You can purchase a condo for example with only 3.5% down, however, you will need title insurance and will have to pay all the other fees title agents collect like Mortgage tax for example.
Othan than the DP, Coop closings are less expensive. Not that this should dictate you choice, but just food for thought
Realtors - instead of giving idiotic stock answers, put some brains into your heads. And yes, I know this question is from 3.5 yrs. ago.
MILTON D. JOHNSON
LICENSED REAL ESTATE BROKER
4 REAL ESTATE 123
co-op you have a lease and shares in the unit, condo you get a title. Different co-op units have different rules and regulations whereas condos are usually same all around.
Exit Realty Search
3928 E. Tremont ave
Bronx, NY 10465
I have NOT read the answers below because I have answered this many times and the ANSWERS are always accurate........ In a CO-OP you don't have fee simple ownership (only shares in a corporation (certain tax advantages) where as in a CONDO you own it with BETTER TAX BENEFITS......
One other major reason is that Coop's will have an underlying mortgage on the building which the Corporations may use to refinance and Cash-out for improvements to the property. The mainteance can increase as the underlying mortgage increases in Balance/Rate. So, if a bad financial decision is made by the Board it can cost the remaining Shareholders.
A Coop is Not considered Real Property. You are purchasing shares of a Corporation. So, like any investment you need to do your Due Diligence into the Corporation.
Feel free to call me if you need some more information.
The â€œcondoâ€ advantage of individual unit ownership can be compared to the benefit of being able to â€œchooseâ€ your neighbors in a â€œco-opâ€ setting, where the application process is very often quite selective. In the sale of a â€œcondoâ€, once a price is agreed upon, the deal is done; whereas the â€œsaleâ€ of a â€œco-opâ€ requires approval by the Board of Directorsâ€”which can be (and often is) withheld based upon arbitrary selection criteriaâ€”with no recourse to the buyer or seller if the â€œsaleâ€ is not approved.
â€œCo-opâ€ ownership represents an â€œinterestâ€ (i.e. stock) in realty; â€œcondoâ€ ownership is actual ownership of realty. Price differences reflect demographic and geographic distinctions. You decide whatâ€™s best for you.
When you buy a condominium , you own the apartment and are part owner of the building. While condos sell for up to 30 percent less than a house of comparable square footage, you share in building maintenance and upkeep costs.
In a co-op, you lease an apartment and are a shareholder in the corporation that cooperatively owns and manages the building. Although you don't directly own property, there are tax benefits.
Century 21 Metro Star
Michael gave you a good answer regarding the difference between a condominium and a co-op. I would like to add that it's sometimes more difficult to obtain a loan for a co-op vs. a condominium as many lenders do not offer financing on co-ops.
I suggest that you work with an experienced real estate agent in the area as they can guide and counsel you through the purchase process and also give you some referrals to lenders.
Good luck to you!
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