Differences between coop and condos? Which one is pricier??

Asked by jdh1810, Huntington Beach, CA Sat Nov 9, 2013

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Sharon Mcintosh’s answer
Sharon Mcint…, Agent, New York, NY
Mon Nov 11, 2013
I'll just add that closing costs for a condo are quite a bit higher than for co-ops. Also, I don't know if anyone mentioned that, while both co-ops and condos usually now require a Application to Purchase, a co-op board usually interviews prospective buyers too.
0 votes
Anna M Brocco, Agent, Williston Park, NY
Sun Nov 10, 2013
Simply put, the traditional housing co-op involves the formation of a corporation for the purpose of acquiring title to a multi-unit building and, in turn, leasing individual units (apartments) to the shareholders of the corporation; whereas condominium ownership involves acquiring title to individual apartments or units. In fact, condominium ownership is, for most practical purposes, only one form of cooperative housing and, like the co-op, must include provisions for management and maintenance of the building(s) and common areas, usually dictated by an elected Board of Managers, in the case of a condominium, and a Board of Directors in the case of a co-op. The condo advantage of individual unit ownership can be compared to the benefit of being able to choose your neighbors in a co-op setting, where the application process is very often quite selective. In the sale of a condo, once a price is agreed upon, the deal is done; whereas the sale of a co-op requires approval by the Board of Directors—which can be (and often is) withheld based upon arbitrary selection criteria—with no recourse to the buyer or seller if the sale is not approved. Co-op ownership represents an interest (i.e. stock) in realty; condo ownership is actual ownership of realty. Price differences reflect demographic and geographic distinctions. You decide what’s best for you.
1 vote
Christopher…, Agent, Tarrytown, NY
Sun Nov 10, 2013
Hi, When purchasing a coop you are actually purchasing shares in a corporation that entitle you to a proprietary lease. You pay a monthly maintenance which includes your pro rata share of the buildings over all property taxes and master insurance policy, along with care of the grounds and in many cases, heat and hot water. Coops tend to be the most affordable form of ownership because they aren't considered real property, meaning you don't actually own the apt. NYC is unique I the sense that supply and demand drive prices higher.

A condo is considered real property and you actually own the unit. You will pay yearly property taxes and monthly common charges. There are tax exemptions that you can apply for if you qualify. I can discuss that with you separately if you like. If you don't need to live in NYC, Westchester County is a great option with many affordable options.

Christopher Pagli
Accredited Buyer Representative
Licensed Associate Broker
William Raveis Legends Realty Group
1 vote
Karen Cheung, Agent, New York, NY
Sat Nov 9, 2013
In NYC, condos tend to be more expensive than a coop.

The main difference between a coop and a condo is the type of ownership. Here's the main points:

- cooperation owns real property
- individual owners owns shares in a cooperation
- you get a 'stock certificate' & 'proprietary lease'
- board of directors or coop board approves tenants/buyers, leases and sales
- may have sublease restrictions
- monthly maintenance includes heat & hot water, maintenance and utility charges for common areas, and real estate taxes. It may also include mortgage interest if the building has a loan, which is tax deductable
- there is usually a flip tax (sales charge) when an owner sells and application fee, move-in charge for buyers
- in NYC, prices tend to be lower to a comparable condo

- owns real property
- you get a title at the end of the purchase
- monthly common charges covers maintenance of common areas, property managers and contributions to a reserve fund
- owner usually covers all utilities for the unit
- owner has to pay their own taxes
- has a condo board, tends to be more liberal than coop boards
- leasing a condo out is not a sublease and usually does not require board approval
- sale of a condo does not require board approval
- sale price tends to be higher
- transfer taxes at closing

I hope this answers your question. If you need further assistance, please feel free to contact me.

Karen Cheung
1 vote
Heather M. C…, Agent, New York, NY
Sat Jun 20, 2015
Hi Sharon. That is a good question and one that many do not seem to understand. A condo is more expensive since it is real property and there is a deed attached to it like buying a house anywhere. Condos are good for investors since they can rent them out right after closing. A coop is less expensive but there are many nuances to adhere to and follow when purchasing within a coop, must have a certain amount of money in the bank and must put 20-25% down and the sublet policy is pretty strict. You really have to make sure that you want to live there or if live changes then you are aware of the sublet policy. Usually you have to live for two then you can rent it out for three out of five years.
0 votes
Danielle Cou…, Agent, New York, NY
Sun Nov 10, 2013
In short, condo's are usually pricier to own than coops are. The reasoning behind this is due to the fact that when an individual purchases a coop, they are in essence purchasing a share/stock of the building. In contrast, when an individual purchases a condo, they are purchasing real property which results in higher expenses paid out by the home owner when factoring in taxes, mortgage payments, maintenance/common charges, etc.
0 votes
Javier Menes…, Mortgage Broker Or Lender, Melville, NY
Sat Nov 9, 2013
Almost always, both end up costing around the same. Co-ops only change maintanence and condos charge you both property taxes and monthly dues.

You should shop around and see what the costs involved are in the areas you're interested in. Good luck!

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Javier Meneses
Senior Loan Officer
NMLS #23130
310 Crossways Park Drive
Woodbury, NY 11797
(516) 606-9648 Cell
(516) 740-4478 Office
(516) 918-5383 Fax
0 votes
Mitchell Hall, Agent, New York, NY
Sat Nov 9, 2013
Condos are real property coops are personal property

Co-ops (short for "cooperatives") are apartments buildings owned by a corporation. Individual tenants do not own their apartments in exactly the same way that they would a condominium or home. They actually own shares of stock in the corporation. These shares are apportioned based on the size and floor level of their apartment, and ownership is established by a stock certificate and occupancy is governed by a "proprietary lease". The corporation pays all real estate taxes, maintenance expenses, and the underlying mortgage on the building. The co-op owner's portion of the payment depends on the number of shares owned in the corporation.

In NY Condos are pricier. closing costs are higher in condos too.
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