Featuring real estate articles and information to help real estate buyers and sellers. The Nest features writings from Georges Benoliel and other real estate professionals. Georges is the Co-Founder of NestApple and has been working as an active real estate investor for over a decade.
Buying a coop in NYC can be tricky. It takes longer and requires more steps than buying a condo, so it’s good to plan. Here’s what you need to know. Coop apartments make up approximately two-thirds of housing stock in NYC. Therefore, if you’re planning on buying a place in the city, you’ll likely encounter coops. Coops are also more affordable than comparable condos since it’s harder for foreigners and investors to purchase coop buildings. So what exactly are they? How much do they cost? And how do you buy one? This guide will cover what you need to know about buying a coop in NYC.
A coop is not considered real property, so when you buy a coop in NYC, it means you’re buying shares of a corporation. These shares come with a proprietary lease that gives you the right to occupy the apartment. New York City coops are also well known for their notoriously strict coop boards, which can deny a buyer for any reason. This can make it more complicated to buy or sell a coop apartment.
This type of ownership has numerous implications. You won’t receive a deed, as you’ll be holding stock in the cooperative corporation. This also means that financing a coop will work differently. You’ll get a co-op loan, and the application requirements will typically be more stringent than a traditional mortgage on a condo or townhouse. While this may sound like a drawback, you’ll enjoy the associated benefit of not having to pay the NYC mortgage recording tax. This is one reason why coop closing costs are generally significantly lower than condo closing costs in New York City.
Once you’ve found a place you want to buy, it typically takes between 6 and 12 weeks to close on a coop in NYC. The exact time will depend on the property and whether you’re making an all-cash purchase or financing. All-cash buyers can expect to close in as little as 6-10 weeks. If you’re financing the coop, you can expect it to take between 8-12 weeks. Remember that you’ll still need to budget some time to find a place, which can often be the most time-consuming part of the buying process. Also, if something goes awry during the purchase process, the timeline can be delayed.
Buying a coop can be a good investment under certain circumstances as New York City’s real estate has been on an upward trend in recent years. That means that if you plan to buy a coop and live in it for an extended period, it will likely appreciate and prove to be a good investment. With that in mind, coops are not typically as attractive to investors as condos as they can be harder to sell, have more restrictions on subletting, and have a flip tax.
When deciding if buying a coop is right for you, weighing the pros and cons is essential. There are numerous advantages to buying a coop, but there are also some downsides. In short, the most significant pros about buying a coop are affordability, while the cons are related to less convenience and flexibility compared to condos. Here’s what you’ll want to consider.
Because cooperative buildings have more restrictive house rules than condominiums, you’ll want to know what you’re getting into before you make a purchase. Here are some critical questions to ask when buying a coop.