what is a co-op residence and what are their restrictions?

  • November 04 2013 - Reno
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Answers (1)

Profile picture for CCarron
 In a coop, you do not own your unit. Rather, you own shares in a corporation that owns the building(s) and the ownership of those shares entitles you to live in the unit.  This is a huge oversimplification but I hope it gives you the idea.  Each coop has its own documents that describe the rights and obligations of the owners/residents.  Typically the coop board must approve new purchasers (although they can't discriminate on the basis of a protected characteristic such as race). Typically there are limitations on renting out a unit, sometimes a total prohibition.  Coops usually have an underlying mortgage, which means the coop fee typically will be much higher than a condo fee of a comparable building that is a condominium, because part of the monthly fee is paying off the mortgage on the building(s).  Also, real estate taxes are included in the coop fee because the units do not get separate tax bills.  Some banks and mortgage companies do not make loans for coop unit purchases. Real estate agents in a community usually know which lenders make loans on coop units.  Interest rates may be higher.  You may need to make a larger down payment.  Despite all of the above, coops can be priced sufficiently below condos that the monthly total expense is lower than a similar building that is a condo, if you can abide by the typically stricter rules and regulations. In some jurisdictions, closing costs on purchases and sales are lower on a coop than a condo because it is not technically a real estate transaction.  If this post is helpful please click on the thumbs-up below.
  • November 04 2013
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