Differences Between A Condo And A Co-Op ?

Q: I have lived in Phoenix for quite some time but have never owned anything (I am a long-time renter). I am beginning to look around to familiarize myself with the market and have come across people referencing condos and co-ops. What are the main differences? Is it management of the building? Does the difference impact the value at all? Is there a difference in taxes?

A: A co-op is not real property. It’s a housing cooperative in which residents purchase shares of the co-op. Co-op boards hold great discretion when selecting new shareholders. Not only are the financial viability of the applicants considered, but the relative close proximity and interaction each resident has with each other is taken into consideration. I’ve heard rumors of applicants being turned down for having large pets, for social reasons, because the applicant is purchasing for investment only, or because the applicants gave the impression that they’ll be difficult or have horrible personalities. Each board is different in their standards, but a personal interview is common. If the potential buyer of a co-op apartment doesn’t want submit themself to a board application and interview, then they should look for sponsor units.

The benefit of co-ops are that that a buyer tends to (generally) get more square footage for their money and the co-op community is stable and financially viable. I would suggest that you contact your Realtor for more information.