What is the difference between condo and coop

This covers costs like lawn mowing, snow removal and certain routine maintenance. Co-op: Co-ops will also charge fees, but they are often higher in a co-op and sometimes include items like utilities. However, co-ops are less likely than condos to charge special assessments for things like capital improvement projects.

Regardless, maintenance fees should be factored into your monthly expenses. Keep in mind they may increase over time. Cost Condo: Condos usually cost more to buy than a co-op, but you have more flexibility with your investment. Co-op: While co-ops will have higher fees, the initial cost of buying into a co-op is usually cheaper than a condo. Property taxes Condo: Condos are individually owned, so owners are taxed separately just as they would be in a single-family home.

Co-op: Co-ops are considered a single property, with a single property tax assessment that is split among the owners and usually included in the maintenance fee. Understanding the legal meaning for different types of properties that involve some sort of shared ownership.

Question I'm hunting for my first home, and have a picture of what I want: a two-story shingled structure, perhaps sharing a wall with others, and part of a community that will take care of gardening and other maintenance.

Answer Many prospective home buyers are similarly confused when trying to differentiate between these three house types. In reality, however, the main difference is how property ownership is legally structured. Talk to a Lawyer Need a lawyer? Start here. Practice Area Please select Zip Code.

How it Works Briefly tell us about your case Provide your contact information Choose attorneys to contact you. Real Estate. Buying a House or Property. Selling a House. Mobile, Manufactured, and Tiny Homes. Homeowners: Taxes, Improvements, and More. Buyers of co-ops tend to prefer the older and more historic features of the buildings as well as the old-world character they exude compared to the mostly generic, glass facades of new construction condominiums.

Condos are more expensive because there are fewer condos than co-ops meaning less supply , and condos are investor friendly meaning more demand. This is because most co-op buildings charge sellers an additional closing cost called a flip tax. Mortgage lenders require that condo buyers purchase a Title Insurance policy. Title Insurance is not required for co-ops since they do not have physical titles. If you are buying a co-op apartment, your attorney may conduct a lien search instead.

This is because most co-op buildings charge sellers an additional closing cost called a Flip Tax. The specific Flip Tax formula and amount vary by co-op.

Depending on the building, a Flip Tax may be calculated as a percentage of the sale price, a percentage of sale profits, a per-share amount or a flat fee. NYC co-ops impose the strictest rules on its residents ranging from severely limited sublet policies to noise regulation, pet policy and limitations on unit renovations and improvements.

Many co-op buildings in NYC also prohibit the use of apartments as pied-a-terres. A typical NYC coop sublet policy is designed to encourage owner-occupancy. Sublet policies for many co-op buildings in NYC can be quite restrictive and even cap the number of years that a shareholder is permitted to sublet her or his unit during the lifetime of ownership.

The most common co-op sublet policy in NYC permits submitting 2 out of every 5 years after the purchaser has resided in the apartment for an initial occupancy period of 1 to 2 years. In more extreme cases, a co-op may restrict the maximum amount of subletting during the lifetime of ownership to 1 to 3 years. NYC co-ops have strict financial requirements for purchasers in addition to a grueling board application process.

A typical co-op board application requires the submission of a completed REBNY Financial Statement , supporting bank and statements, tax returns as well as reference letters. Post-closing liquidity is how much in liquid assets a buyer has after closing on the apartment and factoring in the down payment and buyer closing costs.

Furthermore, a co-op building in NYC has no obligation to provide the reason for any board rejection. Condos, on the other hand, have a much less rigorous application process which only rarely results in a rejection from the board.

A condo may only reject a purchaser by utilizing its right of first refusal , however this requires the condo itself to purchase the unit at the same terms being proposed between the prospective buyer and seller. Another factor buyers must consider when choosing between a condo and co op in NYC is the ease of obtaining a mortgage. Because of the more onerous board approval process with co-ops, it typically takes longer to close on a co-op apartment compared to a condo in NYC.

The average closing timeline for a financed co-op deal is two to three months from the time a fully executed contract is in place. There are a number of factors to consider when choosing between a co-op and condo in NYC. Co-ops are generally less expensive which means you can buy a larger home if you opt for a co-op instead of a condo.