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The Differences Between a Condo and Co-op Housing

How to Choose Between a Condo and a Co-op

Does the idea of shoveling snow, mowing the lawn or fixing leaky pipes make you question homeownership? Then chances are, purchasing a condominium or a cooperative (co-op) apartment is for you – but before you sign on the dotted line, read on.

Co-op owners don't own real estate - instead, they are shareholders in a not-for-profit corporation, and their shares give them to right to occupy space in the building. The co-op building is a single entity on property tax rolls, and the shareholder pays his property taxes as part of his monthly maintenance fee.

A co-op's property tax is usually lower than a condo because of this ownership arrangement. It's also difficult if not impossible to get a mortgage, home equity loan or line of credit on a co-op because the success of the co-op depends entirely on the solvency of its shareholders. It often appeals to those who wish to maintain privacy (remember, no public record of individual unit deals exist) and avoid purchase fees such as title insurance, survey costs and more.

Condo buyers purchase real estate just as “regular” homeowners do and they own an interest in the building's common areas. Condo owners pay their own taxes and mortgages, and because condominiums can't take out loans owners sometimes face steep one-time assessments for repairs or improvements (co-ops have the option of spreading steep assessments out over time because they can take out loans). Purchase costs also run higher because of title insurance and taxes.

Unlike co-op boards that often take a strict or hard-nosed approach to which applicants they'll allow in their building, condo boards have no such power. In short, it may be easier to get into a condo, but they're often more expensive.

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