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Condos vs Co-Ops


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APPROVALS Condo boards have the right to first refusal on every purchase. While condo boards use this right as an opportunity to review each’s borrower’s application, they can only exercise their right if they have a problem with the sale or the purchaser. Even though they can hold up the process, they can’t simply reject a buyer. Co-op boards have the power to deny a prospective purchaser and don’t have to give reasons. Usually there is an interview before approval. If they reject an applicant, the seller needs to go back on the market to find a new buyer.
OWNERSHIP You actually own the specific unit. You also have the option to buy as a LLC. When you buy a co-op, you don’t actually own your specific unit. Instead, you own shares of a co-op corporation that owns the building. The larger your apartment, the more shares you own within the corporation.
MAINTENANCE FEES Common charges are separate from property taxes. The property taxes get billed directly to the unit you own. Monthly maintenance fees cover building expenses such as utilities, insurance, and staff salaries. Also, instead of receiving individual tax bills from the city, the entire building receives one and therefore, part of the monthly maintenance charge goes towards property taxes.
CLOSING COSTS When financing, you do pay the mortgage recording tax of 1.925% for properties over $500,0000. When getting a mortgage- you are exempt from the mortgage recording tax which is about 1.9% of the purchase price. (Co-ops generally have lower closing costs)
SUBLETTING Generally, condos are more flexible with subletting and investor-friendly Very co-op has different rules for subletting. Subletting is generally restricted.

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