Co-ops

Co-ops are plentiful. If you have started your search for a new apartment in NY, you will have noticed that co-ops outnumber condos. They also tend to be cheaper.

Co-ops are synonymous with affordable housing, and there have been records of co-operative ownership since the age of Babylon. In the US, the first record of cooperative housing dates from 1876 in NYC, and that was a luxury cooperative for the upper class. Co-ops as affordable housing made an appearance in the 1930s. (National Cooperative Law Center).

What do you get when you buy a co-op?

When you buy a co-op, you buy shares in the building.

The monthly maintenance includes common area maintenance (landscaping, snow removal, etc.), property taxes, and usually, heat, hot water, and water. Some co-ops also include gas and electricity in the maintenance.

You own the apartment you buy, however, if you want to alter the structure in some way, like, knock down a wall, you must obtain approval from the building's board, a group of elected residents who make decisions about building issues, and prospective residents as well.

When you buy, or sell, a co-op, the board reviews the prospective buyer's application and decides whether to approve or reject the buyer. The board application adds about 30-90 days to the sales process.

Repairs to the building, such as a new roof or new windows, are paid for collectively through 'assessments', an additional (usually small) monthly payment that lasts for a few months or years.

What do you need to pass a co-op board?

Each co-op is different and will have different specifications. Generally required is a good credit score, 725+, 6 months of assets to cover the monthly mortgage and maintenance, and monthly debts within 30% of monthly income. Co-ops also have down payment requirements ranging from 10%-20%.

Condos

The condo as we know it today, originated in 1958 in Puerto Rico and spread across the US. (Wikipedia).

What do you get when you buy a condo?

When you buy a condo, you own the apartment as you would a house. You don't need anyone's permission to knock down a wall, but it's always good to do such things legally with a visit to the building department for the requisite permits and permissions to avoid fines and violations.

Monthly maintenance includes common area maintenance (landscaping & snow removal, etc.), and usually that's it. Property taxes and utilities are separate expenses.

Condos also have a group of elected residents, a Home Owners Association, that decide on the complex's issues, rules and regulations.

During the process of a condo sale, the building's management does a background check on the buyer and may reject a prospective buyer, but it's rare.

Building repairs, such as a new roof, are funded by assessments also. Windows are usually the apartment owner’s responsibility and must conform to the condo's guidelines in color and style.

Which should you buy?

In the end, it's a matter of preference and budget. Co-ops are cheaper and widely available, so there is usually a good selection available. Many of my clients start out on their search determined to buy a condo due to various myths and things they have heard about co-ops, but end up buying a co-op because there is more to choose from and the price tag is significantly lower.

If you have questions or would like to start your home search. Feel free to reach out.