Condos Vs Co-Ops: What’s the difference and Which One is Right for You?

For prospective homeowners who would like to own their own space but not have to deal with responsibilities such as gardening or shoveling snow, a co-operative or condominium can be an excellent option. Expert Associate Real Estate Broker, George Campolo, lists some key differences to consider before you decide if either is right for you.


Ownership Structure


When purchasing a condo, you are essentially buying the apartment that you will live in, as well as a percentage of the shared space in the building. You actually own the physical property. You get a deed, pay taxes, and may be directly responsible for the cost of major upgrades like new windows. Over-and-above your mortgage and taxes, you will pay “HOA” fees to the Home Owners Association for the cost of common area maintenance and repairs. Co-ops are very different. When you buy into a co-op, you are purchasing an interest in the entire building (much like buying a share in a business) in exchange for which you are granted a “Proprietary lease” which allows you to live in “your” apartment. SO, you kind of own it but not in strict legal terms.  As a shareholder, in addition to your mortgage, you pay monthly “Maintenance”, which is your share of ALL the expenses of the building, including the property taxes, heat and hot water, the payroll of the maintenance crew, and every other expense of operating the building or complex. You also are entitled to vote to elect board members who decide how the co-op is run and how funds are collected and spent.




Generally speaking, there are many more co-ops than there are condos, at least in the New York Metropolitan Area. This is due mainly to the fact that many of these co-op buildings started their existence as straight rental properties that were converted by the “Landlords” who then in Co-op parlance became known as The “Sponsor”. Because many/most co-ops are smaller than their condo cousins, they tend to be less expensive. It might be better to say that most condos generally were built as such, were built larger, and often with more amenities than most co-ops, thus, they are more expensive. Many/most are townhomes or garden apartments.


Qualifying Financially-The Most Important Consideration


Separate from your lender’s application and financial requirements, co-ops have their own financial standards that they demand any prospective owner meet.  Minimum income, maximum DTI (Debt-to-income ratio), minimum credit score, and minimum reserves are the primary focus. Reserves are money you will have in the bank AFTER you have closed. Many who know they won’t qualify for a co-op seek out condominiums for exactly this reason. “Generally speaking, if you qualify for a mortgage, you qualify to buy a condominium, with some caveats. If your preapproval is for a VA or FHA loan, you probably can’t buy a condo (and definitely can’t buy a co-op). There are some VA and FHA approved condos, but they are few and far between, so if you don’t qualify for a conventional loan, you won’t be able to buy a condo either”, stated George Campolo.


Selling the Property


If you plan on selling in the future, don’t forget that your buyer will have to go through the same process you did when you bought, and meet all the same qualifications. So, if it’s a co-op, it might in theory at least be harder to sell. You need to make sure that any prospective buyer is qualified, and that their co-op application is properly prepared and submitted. It can take four months from contract signing for your buyer to get in front of the board, so if they are rejected, you will have lost a lot of time and need to start the selling process all over again.


About George Campolo:

George Campolo is an Associate Real Estate Broker with RE/MAX Distinguished Homes and Properties, serving the Westchester/Bronx/Putnam area and points beyond. Highly respected for his unique marketing strategies tailored to individual sellers, he also specializes in working with first-time buyers who might otherwise encounter the pitfalls often found when buying a home or investment property. Mr. Campolo’s clients come first, and he is a fierce advocate for their best interests.


You can reach George at (914) 760-6858


George Campolo around the web: