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ive done research about it and still wonder it people don't recommend buying co-ops because you dont own it, and you can't resell it after? is that true? sorry if its a dumb question.
and Condo is something you own a property ..
Co-ops tend to be older buildings. Most rental buildings converted to co-ops in the 70's and early 80's. You own shares in a corporation and have a perpetual lease to a specific apartment (although if you do something very bad the board can terminate your lease effectively forcing you to sell your apartment but this is rare). You pay maintenance and the corporation maintains common areas and things like the heating, water and pipes in the walls. To buy an apartment you have to be approved by a board which is for quality control of prospective residents because its a building.
Most boards require a 20 percent down payment and good credit score, good income to debt ratio, and good references. Banks make it tougher to get a mortgage on a coop apartment because it is a bigger process to buy and sell. Banks also look at the financials of the coop (a lot of coops have mortgages themselves).
New buildings almost certainly are all condos. New buildings are very expensive to build with today's dollar so there is less of a quality control problem because most who can afford condos in nyc probably aren't going to be hoodlums. You don't have to be approved by a board so you can just pay the seller and it's yours, although some condos have boards and they have the right to buy the apartment from the seller for the same price as the prospective buyer if they don't like that buyer (quality control). Since there is no board interview stuff banks give out loans easier. Condos sell for more money than coops. You actually own physical airspace of your apartment and what's in your apartment. You are usually responsible for when things inside your apartment including pipes breakdown an. D you pay property taxes directly although your common charges are lower. With coops, the coop pays taxes and you pay higher maintenance for it.
it can be easier to get a co-op mortgage. with a condo the bank has to go out on a limb for the entire value of the purchase.
with a co-op the buildings bank holds a portion of the mortgage on the building so the actual value of the apartment is what you pay plus your share of value in the building mortgage.
the bank is only on the hook for the value on your side, the buildings bank takes the risk on their side.
mortgages can run more for a co-op though. your debt is junior to the buildings debt. if you are paying your mortgage and the building defaults on theirs you and your bank are out.
realize in both cases you assume responsibility for law suits that have awards larger then the insurance the condo or co-op carrys.
most liability insurance included in your personal policies or umbrellas will not cover any suit against you that carrys over from the condo or co-op since it is not an act caused by you personally.
we had an incident where a building worker went up on our roof to repair a section on a 104 degree day with a torch. we ended up having a 5 alarm fire because he was in violation using a torch.
if anyone was killed and the building sued we all could have been stuck personally if awards were more than the buildings policy.
Last edited by mathjak107; 06-14-2014 at 03:53 AM..
Co-ops tend to be older buildings. Most rental buildings converted to co-ops in the 70's and early 80's. You own shares in a corporation and have a perpetual lease to a specific apartment (although if you do something very bad the board can terminate your lease effectively forcing you to sell your apartment but this is rare). You pay maintenance and the corporation maintains common areas and things like the heating, water and pipes in the walls. To buy an apartment you have to be approved by a board which is for quality control of prospective residents because its a building.
Most boards require a 20 percent down payment and good credit score, good income to debt ratio, and good references. Banks make it tougher to get a mortgage on a coop apartment because it is a bigger process to buy and sell. Banks also look at the financials of the coop (a lot of coops have mortgages themselves).
New buildings almost certainly are all condos. New buildings are very expensive to build with today's dollar so there is less of a quality control problem because most who can afford condos in nyc probably aren't going to be hoodlums. You don't have to be approved by a board so you can just pay the seller and it's yours, although some condos have boards and they have the right to buy the apartment from the seller for the same price as the prospective buyer if they don't like that buyer (quality control). Since there is no board interview stuff banks give out loans easier. Condos sell for more money than coops. You actually own physical airspace of your apartment and what's in your apartment. You are usually responsible for when things inside your apartment including pipes breakdown an. D you pay property taxes directly although your common charges are lower. With coops, the coop pays taxes and you pay higher maintenance for it.
Condo's do have boards, and their approval process can be as loose or strict as the resident owners wish. They also have application packets that again can rival even the most strictest white glove co-op.
In fact many NYC condo boards, especially in Manhattan and parts of Brooklyn tightened things up in the wake of the recent fiscal crisis/financial meltdown. Some residents were a bit fast and loose with renting out their units for instance. While many did this because they no longer could afford their mortgages, others simply wanted to make money while they lived elsewhere for various reasons.
Condo boards are also looking more closely at financials of prospective buyers. Again no one wants a repeat of what happened during the recession/fiscal crisis where a third or more of a building could not afford their monthly fees and or stopped paying them along with their mortgages. The latter is a big worry for condos because unlike a co-op a foreclosed condo can be sold by the bank. If the condo does not have right of first refusal cash to buy the place back....
Financing for condos can be tricky now as well in light of the recession/financial meltdown. Fannie and Freddie along with many banks will not lend funds for a building where substantial numbers of units are unsold and or otherwise still in the sponsor's hands.
All this being said the allure of a condo is that anyone can live there, however that is also why some may not want to live in such a building as well. While new condo buildings in Chelsea, Tribeca, Soho, The Village, and Financial District may fetch higher prices than some units on the UES or UWS some persons prefer to know who their neighbors are, and not just that anyone with a fat bank account can move into the building.
ive done research about it and still wonder it people don't recommend buying co-ops because you dont own it, and you can't resell it after? is that true? sorry if its a dumb question.
and Condo is something you own a property ..
Yes, you can re-sell it. Usually you will have to have board approval for the sale, so it can be harder to sell than a condo that doesn't have such stringent rules.
Condos are generally much more expensive than coops (for various reasons). Please do more research. It's a complicated topic.
Yes but a condo will cost more for the equivalent apartment.
got to spend money to make money. WIth co-op, you could end spending even more money if you have to get rid of it in an emergency and you can't rent it to whoever you want. Plus, the interviews.
Co-ops tend to be older buildings. Most rental buildings converted to co-ops in the 70's and early 80's. You own shares in a corporation and have a perpetual lease to a specific apartment (although if you do something very bad the board can terminate your lease effectively forcing you to sell your apartment but this is rare). You pay maintenance and the corporation maintains common areas and things like the heating, water and pipes in the walls. To buy an apartment you have to be approved by a board which is for quality control of prospective residents because its a building.
Most boards require a 20 percent down payment and good credit score, good income to debt ratio, and good references. Banks make it tougher to get a mortgage on a coop apartment because it is a bigger process to buy and sell. Banks also look at the financials of the coop (a lot of coops have mortgages themselves).
New buildings almost certainly are all condos. New buildings are very expensive to build with today's dollar so there is less of a quality control problem because most who can afford condos in nyc probably aren't going to be hoodlums. You don't have to be approved by a board so you can just pay the seller and it's yours, although some condos have boards and they have the right to buy the apartment from the seller for the same price as the prospective buyer if they don't like that buyer (quality control). Since there is no board interview stuff banks give out loans easier. Condos sell for more money than coops. You actually own physical airspace of your apartment and what's in your apartment. You are usually responsible for when things inside your apartment including pipes breakdown an. D you pay property taxes directly although your common charges are lower. With coops, the coop pays taxes and you pay higher maintenance for it.
Is there a difference in TAX on purchase price of coop vs condo? (to nyc )?
yes and no. nyc has a transfer tax when you sell. the tax is based on the resale so unlike a condo where the purchase price is the full amount a co-op works out less since part of the equity is contained in the buildings mortgage.
be careful as well with the flip fees on most co-ops today when you sell
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