It's Important to Understand the Difference Between Co-ops and Condos. Do You Know the Difference?

To help you decide which is right for you, here are what I believe to be the main differences:

1) Purchase Price:

Co-ops are generally less expensive than comparable condos.  Many first-time homeowners and those downsizing look at co-ops favorably, due to the lower prices.

2) Fees:

Monthly maintenance fees for co-ops are generally much higher than for condos. This is due in part because the monthly fee includes part of the underlying mortgage for the building.  There may also be additional assessments that are added to the monthly fee.  Many older co-ops need regular maintenance upkeep (such as roofs, windows, masonry work, etc.) or they may have unexpected increased costs (such as the price of heating oil).  The board has the right to vote to charge the shareholders for the added costs.

Many condos are newer and do not have the upkeep charges, but they cannot borrow money as an entity like a co-op and therefore unit owners often face large assessments for similar projects when needed.

3) Ownership:

When you buy a co-op, you don't own your apartment. Instead, you own shares of a co-op corporation that owns the building.

In a condominium, each unit owner owns an individual apartment.  In addition, the buyer owns an undivided interest in the common elements such as the exterior walls, roof, pool and other recreational areas. 

4) Applications & Approvals:

When buying a co-op, all prospective purchasers must be approved by the Board of Directors. The Board approval process is often time-consuming and requires extensive information to be submitted regarding finances, employment, and personal background. The Board does not have to give a reason for denying a purchase.  There is no recourse.

When buying a condo, there is no board approval necessary.

As you can see, the factors vary greatly and the best advice I can give you is to "do the research."   Let's sit down with all the facts, including area you are interested in purchasing, the history/age of the buildings, financial situation of the co-op or condo, your situation/needs, etc.  It will pay in the long run to do the due diligence in the beginning.

f you have any experiences with co-ops or condos that you would like to share with me, please call me at (914) 721-0038 or email me at marcianokw@gmail.com.  I want to educate home-buyers to find the best option for their situation.  www.westchesterhouses4sale.com