Condo vs. Coop, How to Choose
Condominiums (condos) and cooperatives (coops) are both affordable alternatives to buying a house. If you are considering home ownership, but don’t want a house, consider these options. However a condo is not a coop, each has its advantages.
Ownership:
A coop is an asset like any other piece of real estate except you are not really buying the property. When you buy a condo you are buying the actual site (like a house). In a coop, you are buying shares of a corporation (which is leasing you back the place where you will live). It is a North-Eastern phenomenon that makes ownership affordable.
Style:
Both condos and coops can come in different styles. Both come in a townhouse style which is a multi level attached home that usually has a yard in back. Both come in apartment style, which can be a mid-rise building (6 stories or less) or high rise building. Some come in garden style which is a one or two story attached building that usually opens to a great courtyard and has beautiful grounds. The point is the style does not make it a condo or coop, the ownership does.
Price:
Generally condos are much more expensive than coops of the same size and location. Coops have a common charge which usually includes maintenance and taxes. Condos have a maintenance charge only. You pay your own taxes separately. Some cover utilities, some don’t.
Restrictions:
Many co-ops have restrictions on pets, renting, parking waitlists, and income requirements. Most have down payment requirements of 10-15%. Others are more. This is a board requirement, so neither you nor the seller can avoid this. The only way around this is to find a sponsor unit that does not have this requirement. You need to discuss these restrictions with your realtor before you go out to see co-ops.
Buying & Selling:
The process is like buying a house for both except, when buying a coop usually you must get approved by your fellow share holders (the Board). Because you are entering into a business relationship with your fellow shareholders, they will require you to submit an application with your financials etc. They can reject you, and are not required to disclose why. Usually it is a financial reason. Coops can take longer because of the approval process.
Which is harder to sell? Neither. If you price them right, they will both sell. You can purchase a coop as low as $9,000 in Cold Spring (I’m not kidding, I did the search), or a condo for $5.2 Million at the Ritz. If you need help…AskRey.