Condos and co-ops look very much alike… they are both 'apartment units' in a shared building with common spaces and shared amenities. However, the forms of ownership are completely different.

When you buy a condo you are buying a piece of real estate. For legal purposes it is the same as owning a house. If you finance your purchase it is secured by a real estate mortgage.

  • You own the 'air space' of your unit… you own real estate property, just as you would a private house
  • You also own an undivided percentage of the common elements and amenities of the building along with the other unit owners
  • It is governed by an association of the unit members who elect a board of directors to oversee maintenance and enforcement of rules and regulations
  • You pay monthly association fees determined by the association which include things such as: building exterior and common area maintenance, hazard insurance for the building and common areas, heating, professional management, sanitation, security system, shared amenities such as party room/pool/exercise equipment, snow/lawn care, water/sewer
  • 

When you buy a co-op you are buying shares in a corporate entity whose assets include the building in which you will live. Typically you then enter into another agreement giving you the right to occupy 'your' unit  as long as you pay your monthly assessments. Because you don't own any real estate, financing is through special co-op financing rather than a traditional mortgage.

  • You don't own your unit
  • You own shares in a corporate entity that owns your building with the contractual right to occupy your assigned unit
  • Your initial purchase price is often less than for a condo of comparable size; co-ops may limit the amount shares for a unit may appreciate in value when it is sold
  • Your monthly association fees are typically higher than those for a condo because it may also include an underlying mortgage for the property held by the corporation as well as more common property and maintenance; for example, the corporation may own all the appliances in the units which are maintained or replaced as needed
  • It is governed by a board of directors, who frequently must approve any sale

In the Twin Cities area, senior co-ops for age 55+ are the most common form of cooperative living. It is fairly common for sales of these senior co-ops to be handled by the complex itself, so there may be more co-op units available for sale than are listed in the MLS.

Sharlene Hensrud, RE/MAX Results – EmailHomesMSP.com

RELATED POSTS

About Sharlene Hensrud

I love what I do! Highly insightful, analytical and creative, there is nothing I love more than helping you find the right solution for your real estate transition. My mission is to serve my clients with honesty and integrity, exceeding their expectations in service and support… and to help others by donating a portion of every transaction to Habitat for Humanity.

Related Posts

Thinking about selling your home and buying another? 5 steps to get started

This seems to be the year of the move-up buyer… foreclosures are way down, resulting in rising home values so more homeowners can now afford to sell and buy another home. If you are thinking about making this kind of move, here are some steps to take before you hang that FOR SALE sign in.

Read More

Are we moving past stainless steel appliances?

There has been talk about the death of stainless steel appliances for a few years but it is still the runaway favorite. That said, General Electric's matte grey Slate finish appliances sold twice as well as expected last year, and they say they will be introducing more offerings in 2014. Are we on the cusp of.

Read More

Things to look for in a great neighborhood

Great neighborhoods tend to draw you in… they feel comfortable and visually appealing, with a memorable character. Of course it all depends on what is appealing to you! Some specific things to look for… Clean streets, good lighting, appealing landscaping, green space nearby Interesting architecture and design (from any era) Handy grocery store, place to.

Read More