Buying into a Senior Coop

A client bought a share in a senior coop this week, which was both like and unlike a traditional real estate purchase. Many times senior coop apartment sales are handled by the cooperative itself, as was the case in this instance. Although my client had already decided where she wanted to buy, she asked me to walk with her through the process, keeping her best interests in mind. One thing that made this different from a traditional real estate closing was that the seller didn't pay my commission. The sale was handled entirely by the coop… instead my client paid a flat fee commission for my services herself. She felt it was worth it to have someone representing her.

My buyer has a lovely view and a charming corner balcony… and is looking forward to no more home maintenance and yard work. She has already met some of her new neighbors who love it there!

She shared a great kitchen safety tip… when you are cooking always turn on the light over the stove… but don't turn off the light until you turn off all the burners and oven.

Calvary coop

If you are thinking about buying into a cooperative, here are some things to know about what makes a coop different from a condo.

In a housing cooperative you don't own any real estate… you own a share in a corporation composed of residents who own and operate the property. Your share gives you the right to live in a certain unit, essentially a lease. In Minnesota, the unit 'share cost' is typically less than for a comparable condo, but the monthly fees are higher because the corporation may also have an underlying mortgage for the entire property. Each unit pays a monthly fee based on square footage that includes a share of the mortgage, real estate tax, insurance, utilities and maintenance costs.

Because you don't actually hold title to a piece of real estate, traditional mortgage financing isn't available for this kind of purchase but more specialized financing may be available… sometimes even through the coop itself.

Forms of cooperative ownership interest include both 'limited equity' and 'market rate', dictated by the corporation. 'Limited equity' coops limit the amount of profit or gain when a unit is sold, with the intent of maintaining affordable housing. This is most common in senior and limited income coops. With 'market rate' coops the share price follows the open market and shareholders can sell at whatever price the market will bear when they move out. The cooperative often has the right of first refusal to purchase when a share is sold.

Cooperatives exist in different forms throughout the world, and in New York City most apartments are held through cooperative corporations. Some college neighborhoods also have house coops where fee-paying members have the right to occupy a bedroom and share the resources of the house.

In Minnesota, the most common form of cooperative housing is limited equity Senior Cooperatives for people 55+ years of age. In fact, 7500 York built in Edina in 1978 was the first senior housing cooperative in the United States. Although some units are listed for sale in the MLS many are sold directly by the Senior Coops themselves. Many allow pets, but don't assume… ask.

Services typically covered by the monthly carrying charges are similar to that of an apartment, including the items below. Any upgrades from the base standard are the responsibility of the share holder.

  • All appliances, their repair and/or replacement
  • Carpet replacement
  • Painting
  • All utilities except telephone and Internet, including basic cable TV
  • Garbage and recycling
  • Water and sewer
  • Lawn care and snow removal
  • Individually controlled heat zone and air conditioning in unit
  • Annual furnace inspection and filter change
  • Annual window washing
  • Security, on-site staff
  • Reserves for future repairs/replacements
  • Extended insurance coverage
  • Care of unit by staff in your absence

Senior coops also often have group activities and/or amenities such as optional meals, programs and events, guest suites, beauty/barber shop, workshop, exercise center, gardens.

Sharlene Hensrud, RE/MAX Results – Twin Cities Senior Transitions Realtor


Written By

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.

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