It’s common for people to confuse condos and co-ops, but there are significant differences between these two types of residences. Let’s take a look at these differences in order to answer the question “what are condos?”
Here are three ways to distinguish between condos and co-ops:
- Condos typically cost more than co-cops, although the difference isn’t as drastic when you compare ones that are roughly the same size and have the same amenities. You do pay more in closing costs with a condo, and you have to factor in the cost of title insurance and a mortgage recording tax.
- Co-ops generally have much tighter financial requirements than condos. You have to provide financial information on liquid assets, your income and your net worth. With a condo, you don’t have to disclose as much. You also have to come up with a higher down payment, ranging from 20 to 50 percent, for a co-op.
- Co-ops usually have more rules and restrictions than condos, but you’re also protected under landlord-tenant laws as a co-op shareholder.