I know a lot of people recommend condo, but what if you can't afford a condo? Should you still buy a co-op?

Asked by Alimer, Riverdale, Bronx, NY Sun Mar 14, 2010

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Jenet Levy, Agent, New York, NY
Fri Mar 26, 2010
Alimer,
The choice of a condo vs. a co-op depends upon your individual needs and wants. If you like older, pre-war buildings, those are mostly co-ops. If you like new and modern, a condo may be your style.
Next to consider is the state of your personal finances. A co-op board will require a certain debt-to-income ratio and a certain amount of liquid assets after closing. A condo's requirements are much less restrictive. There was a time when the amount of downpayment you could afford made a difference, but these days the banks will generally not lend more than 80% even if the condo only requires 10% down.
Yet another thing to consider is if you will need to sublet at some point. Co-ops are stricter about this and each building has their own policy.
Overall, one is not better than the other. It depends upon what you like and want. A co-op is a terrific choice if you are qualified. If you work with a good buyer's agent, they can provide you with a wide range of options in your budget and in accordance with your lender's pre-approval.

Hope this helps.

Jenet Levy
Halstead Property, LLC
jlevy@halstead.com
212 381-4268
http://jenetlevy.halstead.com


Jenet Levy
0 votes
MAP1922, Other Pro, Newport, OR
Wed Mar 24, 2010
75% of all the residential construction in Manhattan are cooperative housing, so to rule co-ops out per se is to rule out the majority of all property. However as private cooperations they have the right to set out rules and regulations, especially important are the financial requirements.
But keep this in mind - in today's financial climate - would you rather be in a building that required for example, 30% down, or a building which allowed 5 or 10% down? Many coops learned hard lessons during the 80's when we had another economic downturn and the buildings were faced with either allowing banks to foreclose on their apartments or to purchase the units themselves. These are simply thoughts to consider.
Good luck,
Michele A. Peters, Esq.
Web Reference:  http://mpetersesq.com
0 votes
Joseph Hasti…, Agent, Bayside, NY
Sat Mar 20, 2010
Hi Alimer. If a house is out of the question and a condo is as well, what other option is there? Coops are great options for a first purchase. Obviously prices are less and your dollar will get you more space. You can always check the house rules for any sublet policy. The bottom line for interviews is simply that if you are financially qualified, the interview is no more than mere formality and a meet and greet at best.

You'll also find good inventory as Coops out number Condos. Check into this if you'd like. I'm sure you'll find some quality properties out there waiting for you. Good luck.
0 votes
Weimin Tan, Agent, New York, NY
Fri Mar 19, 2010
It all depends. Condos have better appreciation value because of flexbility in renting out and no board approval. If you plan on living there, coops are good too.

wealthre.blogspot.com
castle-avenue.com
Web Reference:  http://www.castle-avenue.com
0 votes
Robin Silver…, Mortgage Broker Or Lender, Garden City, NY
Mon Mar 15, 2010
Keep in mind that co-ops are very common in NY, there are a more limited number in NJ, CT, DC, and a very few other places, so if you are reading Trulia, there is more information about condos. Many people do not like the idea of the board interview. if you work with an agent who knows the particular board, and a loan officer who knows the best place for you loan and what will work for you, then you will be fine in a co-op in your price range. There are a lot of parts to purchasing a co-op, and time is running out if you want to make sure that you close before June 30th. The process for a co-op often takes longer because of the board interview portion.
0 votes
Mitchell Hall, Agent, New York, NY
Mon Mar 15, 2010
There are pros and cons to both type of ownwerships, depending on your lifestyle and how you plan on using the apartment. If it will be your primary residence and you plan on living there rather than subleasing and you can qualify there can be benefits to buying in a coop. Most pre-war buildings are coops. The cost is lower, closing costs are lower and you may get a better tax deduction.

Many New Yorkers prefer the"quality of life" in coops

The blog link below will explain the pros and cons and the differences between coops and condos.
0 votes
Anna M Brocco, Agent, Williston Park, NY
Mon Mar 15, 2010
The choice as to buying condo or co-op is entirely yours--if a co-op better suits your needs, go for it--do keep in mind that with most co-ops board qualifications/approvals do exist and just because you may qualify for a mortgage does not necessarily mean you will qualify board financial requirements--your agent can advise you best.
0 votes
carol friedm…, Agent, New York, NY
Mon Mar 15, 2010
Alimer there is nothing wrong with coops ,there is a larger % of coops in New York then condos, so you have many choices. As long as you purchase in a coop where they have reasonable rules, there should be no problems.Coops usually require liquid assets after purchase, where condo do not. Each coop has different rules and i do believe its very important to buy in a coop where the rules are suitable to you. Some coops have flexible rental policy's some have no rental policy's. I think its important to check out financial s of the coop you would like to buy in and rules. Right now lots of good deals on the market . good luck carol Friedman nest seekers
0 votes
Dan Chase, Home Buyer, Texas City, TX
Sun Mar 14, 2010
The choice is yours. You could buy a coop if it would be a good fit for you.

Before buying see if buying makes more sense than renting now. The blog below shows how to financially decide that. Remember to include HOA fees as they can change the equation a lot.

http://www.trulia.com/blog/dan_chase/2010/01/does_it_make_mo…
0 votes
Alimer, Home Buyer, Riverdale, Bronx, NY
Sun Mar 14, 2010
I have saved almost 15% percent of a home worth around $200K, but the problem is I found a co-op that I like, but people have such negative review for co-op that it make me a nervous to make an offer. I was trying to buy to get the tax credit, too. Maybe I should just wait to save more money and buy a condo, and forget about the co-op.
0 votes
The Braswell…, Agent, New york, NY
Sun Mar 14, 2010
It seems to me the issue is less which type of ownership you are looking for, but more a question of what parameters are you looking at (place/price/size etc). A lot of coops require 40% down these days (60% financing), where as many condos are still open to 10% (though you will be hard pressed to find a bank that lets you go for less than 20% down).

If you can't afford a condo at 5-10% premium over a coop, can you afford twice a smuch down? That said,
some coops allow 20-30% down, but far fewer.
0 votes
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