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What is a Condo?
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Buying a Condominium (Condo) is very similar
to buying a house. When you buy a Condo you are buying real property,
for which you receive a deed. The purchaser of a Condo owns the apartment
and a percentage of the common areas, such as the lobby, hallways,
garage etc. Condos have Condo associations made up of a group of apartment
owners elected each year by all the residents of the building. The
Condo association is responsible for protecting and enhancing the
value of the building through managing the overall operations, finances
and upkeep of the building.
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What are the benefits of buying a Condo? |
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Compared to Co-ops, Condos have almost
no restrictions, making them far easier to buy, sell and rent. Most
Condos are “investor friendly”, meaning that the buyer
is free to rent the apartment to whom they wish for as long as they
wish. Most Condos permit guarantors, parents buying for children,
pied-a-terres, and pets. Condos typically only require a down payment
of 10% of the purchase price, sometimes less. Most importantly,
Condos are worth more than Co-ops.
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| 3. |
Are Condo’s really worth more than Co-ops?
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Yes, because Condos are in such limited
supply in New York and because there are relatively few restrictions
on them they sell for a premium of 15% to 25% over Co-ops.
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Do Condos require an application and interview? |
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More and more Condos require that an
application or “board package” be submitted to the Condo
association for approval. However, Condo applications are not nearly
as extensive or intrusive as those of Co-ops. Fortunately, Condos
do not yet require a buyer to interview with the Condo association.
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Can a Condo association reject a buyer? |
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Yes, a Condo association can reject or
“turn down” a buyer. However, unlike Co-op boards, if
a Condo Association rejects a buyer it must purchase the apartment
from the seller for the same price the buyer agreed to pay. This is
known as the Condo’s “right of first refusal”. Most
Condo Associations do not have the financial means or support to exercise
their right of first refusal, but they do have other ways of preventing
unwanted people from buying in the building. Most often, Condo associations
will “sit-on” a purchase application for several months
if they want to prevent the sale of an apartment. This is usually
enough to deter the buyer, who only has a limited time before their
mortgage rate lock expires, and/or the seller, who most often needs
the proceeds of sale to purchase their next home, from going through
with the sale.
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| 6. |
How much of a down payment do I need with a Condo? |
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Most Condos require a down payment of
10% of the purchase price.
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What does the monthly “Common Charge” in
a Condo include? |
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Common charges cover the overall building
expenses, such as staff (doormen, super, etc.) salaries, heat and
hot water, insurance, repairs and maintenance. The Condo common charge
does not include your real estate tax, as each apartment in a condominium
receives its own tax bill.
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| 8. |
Can I rent or sublet my Condo apartment? |
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Yes you can, as most Condos have no restrictions
on renting or subletting.
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