Condo Closing Cost

I think it's because condos in NYC tend to permit unlimited leasing to tenants whereas coops have strict rules limiting the owner's right to lease to a tenant. In other words, condos are better investment properties. Obviously, your mileage may vary with a particular building's individual rules.

So, if you are planning to live in the apartment, there is no reason to pay the higher closing costs, price premium and ever increasing taxes. What do people think?

http://streeteasy.com/nyc/talk/discussion/9280-coop-vs-condo

I think that if you're at all concerned about job security, the extra 4-5% in closing costs seems reasonable insurance that you won't have to sell in a distressed/job loss or moving situation; you can rent it out for a while and make a decision later. It's usually a real pain to rent out a coop, if it is even permitted. Also some people really hate dealing with all the rules of living in a coop. It depends on your needs and your preferences. Condos also tend to appreciate a bit more than coops for these reasons.

pls refresh for me what the additional closing costs are? the mtge recording tax is one, but that's only if there is a mtge and is based on the amt of the mtge--and ive bought both coops and condos, but forget

you have title insurance for a condo on top of mortgage recording tax.

on another note, there are condos that are starting to implement rent rules that are strict as well. maybe not as strict as most coops, but still.

A few, just as there are a few coops out there with very lenient renting policies. Generally speaking, condos are still valued for their flexibility. Title insurance is set by the state, and I think it's like $2500 or something. All told, not a huge cost in the grand scheme of things.

mortgage tax is applied to the size of your mortgage - regardless of condo or coop - right?

transfer taxes apply to only condos usually paid by the seller. but then coops have a flip tax that is probably higher than the 1.875ish NYS+NYC transfer tax...

with a condo, you actually own real estate too - and guess what, if you find a buyer, there is no board of your neighbors that can reject them for whatever reason. my old coop board rejected a buyer of neighbor of mine - he had to find a new buyer and ended up getting a lower price.

All good posts, I'd like to add what hasn't posted yet....monthly expenses.
Coop monthly CC charges tend to average 20% to 40% higher for the same square footage. Always exceptions of course but it's what Ive noticed.
However in 7-10 years when all those new developments with their tax abatements run out, all bets are off.

coops being assessed generally many years ago, tend to have lower monthly carrying costs (maint + taxes) than most condos, unless of course, there is a temporary condo tax abatement in place.

I would love to see a tax recalculation implemented across the city to create something, well, more fair.

My understanding (but i'm no expert on this) was that coops often have higher monthlies because there is often a mortgage on the building (and taking your pro-rata share of that mortgage into account, which doesn't exist with condos, shows your true true purchase price).

I am only looking at condos because I want the flex to rent, and the whle hassle factor of coops, and myriad night mare stories, have turned me off coops.

transfer taxes apply to condos and coops, so no savings there.

re transfer taxes - my mistake - guess I was thinking of title insurance

title insurance is not a flat fee'd item. it is appx 1% of face val. applies to condo only?

transfer tax applies to both condo and coop.

flip tax applies only to coop. often in the range of 1.5-2%

mansion tax applies to both.

some of coop mntnce is tax deductible. if significant, coop has large underlying mtge--not desireable: weaker financial positon, and usually attendant higher monthlies

mortgage recording tax applies to condo only--based on mortgaged amt only

i don't get anything remotely like a 4-5% closing cost differential here--and at higher prices, in bldg's with big flip taxes, where 50% cash os required, that same level of cash spent on a condo might, in fact, result in lower closing costs

pls show me the flaw in this--

sorry no proof--sb " at higher prices, in coops with big flip taxes, where 50% cash is req......"

If you own a coop and the board wants to stick it to you, it's easy: they don't approve a sales contract. There's multiple reasons why some people prefer condo living. Many people talk about how coops are more exclusive, but that is just malarkey. Bernie Madoff lived in an "exclusive" coop. I've known plenty of non-classy, non-professional people living in coops. The city is filled with coops.

One other difference - most coops were built before WWII (or at least pre-1980s). Thus, condos (especially those built in the last 10 years) often have features that coops don't. These include central air, washer/dryer, and dishwashers. Also, I've noticed that many older buildings (which are usually coops) have very small windows in comparrison to newer condos. I like my living space to have lots of natural light so many coops (with their smaller windows) are not appealing to me.

Another big difference is the coop board. I personally would not want to have to disclose my entire financial situation to my neighbors. In a condo, as long as you can get a mortgage, you can buy the place.

One nice thing, however, about a coop is that the building can control the type of people who move into the building. If somebody comes across in an interview as the type of person to have loud parties every night, the coop board can simple not approve the sale. I would also think that coops can do a better job of enforcing 'qualitiy of life' issues (loud noise; smoking; etc) than condos.

Just my two cents.

"One nice thing, however, about a coop is that the building can control the type of people who move into the building. If somebody comes across in an interview as the type of person to have loud parties every night, the coop board can simple not approve the sale. I would also think that coops can do a better job of enforcing 'qualitiy of life' issues (loud noise; smoking; etc) than condos."

double-edged sword

Title insurance and mortgage recording tax are additional expenses for a condo. These add up to 2-3% In addition, for new construction, you have to pay 2-2.5% transfer tax. Also, condos are appraised at a higher value by the city increasing the taxes faster over time.