Are co-ops harder to buy/sell? Coop loans harder to get?

Asked by MP, Jersey City, NJ Tue May 1, 2012

Is it true that it's harder and more expensive to secure a loan for purchasing an apartment in a coop building than for purchasing a regular condo? What's the spread between mortgage rates on identical coop and condo apartments?
By extension, is it much harder to re-sell a coop (aside from the board-approval hurdle)?

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Socrates Petrakos’ answer
Socrates Pet…, Agent, Clifton, NJ
Wed Jun 6, 2012
Its not more expensive to secure a co-op loan, you just have limited options. For example Wells Fargo is one of the few lenders that are still providing loans for co-op purchases, but the cost and interest rate is the same as if purchasing a similarly priced condo. The only difference may come in the closing costs, as the maintenance and taxes of one unit, may differ to that of the other. Also, some buildings request 3 months of working capital up front, others 2 months etc.

In terms of re-selling a co-op, I believe that it is harder than selling a condo, and its mostly because people dont want to go through the board-approval process, and many times cant even qualify because they dont meet the 3:1 or 4:1 ratios that some boards require. This however is where price comes to play, and as you probably know, co-ops are usually priced lower than condos. Primarily because they dont really gain as much value compared to a condo, but also because of the high maintenance fees, as well as the income to debt ratio that a buyer needs to qualify. If its priced correctly, it will sell though. I just sold a co-op on Blvd East for $130k. 800sq.ft, updated, with a balcony, in a full service building. A similar condo would cost $70k+ more. So as long as its priced right, it will sell.

Hope I was able to answer your question.

Socrates Petrakos
Keller Williams Realty
1 vote
Jose Martinez, Agent, Jersey City, NJ
Sun Oct 7, 2012
Co-op is harder to qualify the borrower, and the building. Call me with any questions.
0 votes
Abu Musa, Agent, New York, NY
Tue Sep 18, 2012
You may read my blog "FINANCING A CO-OP" That will explain about this.
0 votes
Victoria Fel…, Agent, Hoboken, NJ
Tue May 22, 2012
Typically board approvals go much smoother in New Jersey vs New York. You should be aware that coop ownership status differs which impacts unit renovations and subletting. Is there a particular building that interest you? If so let's explore your options.

0 votes
Mark Finne, Agent, Jersey City, NJ
Tue May 1, 2012
Typically, yes, it's harder, but not necessarily more expensive. There's no such thing as an identical condo and co-op, though...Since one is ownership in real property, one is ownership of shares in a corporation...
Reach out to me directly if you wish, for a proper consultation. I have the experience in both New York and New Jersey.
Best regards,

0 votes
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