A co-op (cooperative) is a building owned by a corporation, where buyers purchase shares in the corporation rather than owning real property. These shares grant the buyer a proprietary lease to live in a specific unit within the building.

A condo (condominium) is real property in which buyers own their individual unit outright, along with a shared ownership interest in the building’s common areas.

The main difference in ownership between co-ops and condos is that co-op buyers own shares in a corporation, while condo buyers own their unit as real property.

Co-ops are significantly more common in NYC than condos, accounting for approximately 75% of privately owned apartments in the city.

There are more co-ops in NYC because of historical development patterns. Co-ops became common before condos were introduced to the housing market in the 1970s. Since then, almost all new development has been condominiums.

There are instances where shareholders can rent out their unit in a co-op. When allowed, it usually requires board approval and adherence to strict processes and rules.

Yes, you can rent out a condo in NYC, and typically with fewer restrictions than a co-op.Still, you must still check and follow your building’s specific rules and bylaws regarding rentals and subletting.

Co-ops are generally less expensive to purchase than condos of comparable size, which is one of the reasons they appeal to many buyers. While co-ops usually have lower purchase prices, this is not always the case.

Yes, condos do have maintenance fees called common charges. In addition, owners must also pay property taxes separately.

In co-ops, property taxes are paid by the building as a whole and are included in the monthly maintenance fees paid by shareholders.

Sometimes board approval may be necessary to buy a condo. Purchases from a developer usually do not have board approval requirements. Resales are subject to the condo board’s right of first refusal, a clause in the building’s bylaws.

Yes, buying an NYC co-op requires approval from the board of directors. Buyers must receive board approval, which typically includes an interview in addition to the application process and satisfactory fulfillment of requirements.

Any property that is properly priced, positioned, and in high demand can be easier to sell than something that doesn’t align with the current market. There are typically fewer logistical and procedural hurdles to cross when selling a condo, but it doesn’t mean that every condo is easier to sell than every co-op.

Absolutely. While every co-op board has significant power to approve or reject new shareholders in the company, it is possible for a foreign national to purchase into a co-op environment. We have helped a number of foreign nationals purchase co-ops in NYC.  

 Yes, international buyers are able to purchase condos, with increased flexibility compared to co-ops. Numerous foreign buyers purchase property in New York every year.

Absolutely, co-ops allow renovations! When you purchase into a co-op, you are becoming a fellow shareholder in the corporation that owns the building. You have a proprietary lease for your apartment, but in the years ahead, your renovations will help sustain an ever-increasing value in the future marketability of your home. This is good for the building as well, since a home poorly kept would start to sink the values of the building. Like all buildings, your plans must be submitted for approval, but one of the biggest reasons for this is that the building needs to make sure you aren’t causing damage to the rest of the building or to other units. In some cases, there may be some limitations around the work that is performed, but we have many clients that have renovated their co-op.

Yes, there are always closing costs in any type of real estate purchase. While closing costs may vary from state to state and city to city, there are also some costs that vary from property type to property type.

 We typically estimate closing costs for any type of apartment to range from ~2%-6%, depending on the type of purchase, whether the property is a new development or resale, and depending on attorney costs, capital contribution requirements, etc.

Yes, condos require a mortgage, whereas co-ops require a very similar loan that is often referred to as a mortgage, but some lenders differentiate the financing type since it is a loan collateralized by a stock certificate of shares versus property. Once you obtain the loan for either a condo or co-op, the loan may feel the same and operate in a very similar way. We introduce our clients to some of the outstanding lending partners we have that can help guide you through the ins and outs of various loan products, since we are not authorized to give direct lending or borrowing advice.  

You can begin the co-op purchase process by getting pre-approved for financing and finding a real estate agent who can help you navigate the process and guide your search.