With all of the above said, I've sold many co-op units in DC and know that there are dozens of great cooperative housing associations in the area that can provide an excellent opportunity for many buyers. Some of DC's finest and most historic residential buildings are co-ops and they should not be overlooked.
Best of luck!
Although some DC agents are not familiar with co-ops, I don't believe that in general DC agents are reluctant to show co-ops. Experienced agents know that co-ops can be a great value as they are typically a lot less expensive than similar condos, and the fees include property taxes and usually most of the utilities. But many of my buyer clients opt not to consider coops because most do not allow renting or only allow it for a very limited time period. DC is such a transient area that buyers want the option to rent if work or life mandates a move, and don't want to be forced to sell in a down market or if they move away temporarily.
But, I still love selling co-ops. My very first client purchased a co-op, and I still believe she got the deal of a century. I've been hooked on them ever since.
Long & Foster Real Estate
With a co-op":
- Your co-op fee often includes the underlying mortgage and taxes, so it's higher than you might expect in a similar condo.
- Your financing options are limited to a few lenders approved by the co-op board (not really a prob)
there are a couple of other differences that have pre/cons associated with them and I'd be happy to review them with you.
202 552 5624
Accredited Buyer Representative
Licensed Associate Broker
Accredited Buyer Representative
William Raveis Legends Realty Group
Bear in mind that the tax bill for a new owner may not be the same as it is for the current owner.
The current information for calculating the tax bill can be found at this URL:
RE/MAX Allegiance 202-547-5600
Maybe this will help:
Myth: co-ops always have much higher fees than condos.
Fact: only a few of the old, luxury co-ops (e.g., the Watergate) have really high fees. The rest are about the same as condos (around $500/mo), and, unlike condos, co-op owners have total control over fee increases. Fees only appear high because they include property taxes, the "underlying mortgage" (see below) and often some or all ulitities. And when you account for tax and other savings, total non-mortgage expenses for a co-op unitl are often much lower than a similar condo.
Myth: You have to put 20% down on a co-op and only few "approved" lenders will finance them.
Fact: Many lenders finance co-ops and permit 10% down or even less (we did 5%), and rates are very competitive. Moreover, the "underlying mortgage" (i.e., the mortgage on the co-op building itseld) is subtracted from the sales price, so a buyer has to finance a smaller total amount (meaning less $$ down and potentially avoiding "jumbo" rates). So if a unit sells for 700k and has an underlying mortgage of 100k, the buyer only has to finance 600k. The other 100k is already set and paid monthly with the HOA fees.
HUGE Myth: Condos offer tax benefits over co-ops.
Fact: Tax deductibility on a mortgage co-op - including the underlying morthahe - is identical to that of a condo. More importantly, property taxes on a co-op unit are a fraction of a condo. For example, DC taxes on a 1500 sq ft co-op will run you about $1300/yr, while taxes on a similar condo in the same neighborhood will be $4k-$5k! So you save thousands per year.
Hope this helps. Yes, co-ops have rental restrictions (although not nearly as restrictive as people think - you can still rent, just not infinitely and/or to any shlub off the street), so they're wrong for people looking to buy a rental property but great for people who are looking for a home and don't want be surrounded by an endless stream of noisy/messy renters. And they're always priced at a significant $/sqft discount to condos. So if you're looking for a great deal on a HOME, do yourself a favor and get to know the facts.
Having lived for many years in one of Washington's finest co-ops (The Broadmoor) and sold many in DC, I am a big co-op fan. Feel free to contact me if you need guidance!
WC & AN Miller
Christie's Great Estates
I am not certain of the details, but to my understanding in order to finance a unit on the COOP the purchaser is required to have 20%+ downpayment and the coop fees are rather much higher than for condos, sometimes in the excess of $1000 per month.
When a purchaser looks for financing they have the option of 3.5% down with FHA, if the condo building is not FHA approved they can go with the 5% or 10% down conventional financing and looking at the condo fee in the range of $190-$450 dependent of size and amenities.
Also, my understanding is that home and condo purchases have better tax benefits than the coops, in the respect of the amount of deductible sum of interest and so forth.
Hope this helps
Boris Miric - Realtor Serving DCâ€“VAâ€“MD
Certified Investor Agent Specialist (CIAS)
Certified Distressed Properties Expert (CDPE)
O: 202.459.4700 F: 202.318.6520