Coops vs condos

A.    COOPS:

1)    Great for owner occupied properties, not investment or rental purposes

2)    Closing is contingent upon strict Board Approval, and Board Interview, thus longer time to close, average 60 days and Buyer must qualify

3)    Extensive Board package is required once COMMITMENT letter is issued (3 business days)

4)    Client is purchasing securities or SHARES in a corporation as opposed to real property- Stock & Lease as proof of ownership

5)    Cheaper carrying costs, no property taxes, only monthly maintenance is paid

6)    Strict sublet policies- not good for investors or foreign buyers

7)    Cheaper closing costs for Buyer- No mortgage tax paid at closing, no title insurance required, just a lien search for $450.00

8)    Expensive Closing Cost for Seller- Coop Flip Tax (average 2%) and NYC/NYS Transfer Tax (1.4% – 1.825%)

9)    Tend to be cheaper when comparing price per sq footage

B.    CONDOS:

1)    Small board package required to obtain Condo Assoc’s WAIVER (of their Right of First Refusal)

2)    Shorter closing process. 30-45 days

3)    Real Property, therefore higher monthly carrying costs including property taxes AND monthly condo maintenance fee

4)    Higher Closing Costs – Buyer must pay title insurance (roughly .5%-.8% of purchase price) and Mortgage Tax (1.8% of Loan Amount)

5)    Less restriction, easy to lease out and renovate, so great for investors and foreign buyers

6)    Tend to be higher in price per sq footage

7)    With new constructions, burden shifts to Buyer to pay Sponsor’s Transfer Tax so be sure to negotiate this tax and have Sponsor pay it

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Taliya Bashani ESQ

Are you tired of spending so much time and energy running around with buyers showing them properties only for them to jump ship or not pull the trigger ? Are you getting into contract only to lose deals and have them fall through midway? I have helped thousands of agents just like you refocus their energy on sellers and win more exclusive listings. They are doubling their commission with a lot less time and stress. I have spent the last 15 years as a broker and real estate attorney closing over 10,000 deals and over $1 billion in real estate.

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