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Co-op Vs Condo:
What's Right for You
In NYC, there are two types of apartments - coops and condos. Understanding the differences early in your search is important, as they can affect everything from your budget and financing to your ability to rent, or sell in the future.
Legal Structure & Ownership
When you purchase a condominium, you own real property—the apartment itself—much like purchasing a single-family home elsewhere in the country. When you purchase a co-op, however, you are buying shares in the corporation that owns the building. Those shares entitle you to a proprietary lease, giving you the right to occupy a specific apartment.
Because co-op owners are shareholders in the building, purchases are subject to board approval. Prospective buyers must typically submit a detailed application, satisfy the building's financial requirements, and complete a board interview. Co-op boards also have broad discretion to approve or reject applicants and can establish rules governing ownership and occupancy, such as restrictions on subletting, renovation work, pets, or whether an apartment may be used as a pied-à-terre.
Price & Closing Costs
All else being equal, co-ops are generally more affordable than comparable condominiums. Depending on the neighborhood and building, condos often sell for 10%–40% more than similar co-ops, with an even larger premium for new construction. This pricing difference reflects both the larger supply of co-ops in New York City and the greater flexibility condos offer, including fewer restrictions on ownership, financing, and renting.
Closing costs also differ significantly. Buyers generally pay substantially lower closing costs when purchasing a co-op, particularly if financing, because co-op purchases are not subject to mortgage recording tax or title insurance. On the other hand, sellers often fare better with condominiums. Many co-ops impose a flip tax upon resale, which is typically calculated as a percentage of the sale price or net proceeds, or as a fixed amount based on the number of shares allocated to the apartment.
CO-OP
CONDO
Common Questions (& Misconceptions) About Co-Ops & Condos
