December 17, 2013

What's the Difference Between a Co-op and a Condo? Pt 1

I was speaking with a friend today who asked me this question and it got me to thinking... As this is probably one of the top five questions asked of Real Estate Professionals, I have decided to put together a series of posts that will break down what every home buyer should know if they are considering the purchase of a condo or co-op.
As the two are often used in tandem, the differences are not always clear.  I also believe that knowledge and information are power, so I will begin with the obvious, but not so widely known.... 
What is the Difference Between a Co-op and a Condo?

A Co-op: Buying into a cooperative cooperation, or co-op, is a securities exchange, not a real estate transaction. The buyer purchases shares in the corporation that owns the building. As a shareholder, he or she has the right to lease a designated apartment from the corporation. Each shareholder also has the right to vote for the Board of Directors, who in turn runs the building.

A Condo: Buying a condominium, or condo, is a real estate transaction. The buyer purchases real property, which comes with a deed, much like purchasing a house. Condo owners also vote for the Board of Directors, which runs the building in basically the same way as a co-op board, but with less sweeping authority.
Having an agent that is well versed in the nuances of Co-ops and Condos is a crucial first step.  I'm available if you have any questions......
Next week we will cover: Deciding What's Best for You: a Co-op or a Condo