Buying a Coop in Washington, DC

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Buying a Coop in Washington DCWashington, DC is one of the few areas in the country that has coops or cooperatives.  Coops differ from condos in that condos are considered to be real property.  Coops are considered to be personal property because the co-operative corporation holds fee simple title of the entire property.  This is why if you have ever tried to pull the public record for a unit in a coop building, you can only find the tax record for the entire building.

Are You Buying a Coop?

Generally speaking, coops offer the buyer more space than your typical condo.  Also, the prices seem to be lower however, this can be deceiving because the monthly coop fee is often times higher than a condo.  The fees can be higher for numerous reasons depending on the amenities of the building, but are also higher because the fee usually  includes property taxes and utilities.  So while you are paying less initially, you pay more on a monthly basis.  If you are looking to buy a coop you need to know that not all lenders can provide financing for coops.  Each building has their own list of preferred lenders.  The amount needed for your down payment can also vary by building.  The building's down payment requirement supercedes that of the lender.  Lastly, if you are receiving any gift funds you may want to have them transferred to your account before you begin your home search.  Some coops do not allow gift funds for the down payment.

The Coop Board Must Approve You

Before you can move into a coop, the coop board must approve you.  As antiquated as this may sound, it is true.  The coop board is basically looking to see if you are credit worthy.  They want to make sure that you are in a strong financial position to pay your monthly coop fees.  If you are unable to pay your portion, at some point the other members will be responsible.  Although most buyers are approved by the coop board, there are instances where a buyer has been denied.  If you are denied approval, the coop board must disclose why you were not approved.

Are You Listing a Coop?

If you are listing a coop make sure you have all of the information you need to give to a perspective buyer and buyer's agent.  If there is an Underlying Mortgage or Blanket Mortgage that should be included in the sales price.  Make a note as to the remaining balance of the Underlying Mortgage and the date it will be completely paid off.  Upcoming or current special assessments also need to be disclosed.  Provide a list of the coop's approved lenders, the down payment requirement, the rental policy and the pet policy.  Having this information upfront will enable the buyer to make an informed decision as to whether or not they want to write an offer on your coop listing.

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Posted by

Candy Miles-Crocker

Real-Life Real Estate Training

Comments (10)

Lise Howe
Keller Williams Capital Properties - Washington, DC
Assoc. Broker in DC, MD, VA and attorney in DC

Very informative post - I am curious why you chose to focus on DC coops. good job! 

May 07, 2015 10:52 PM
Amanda Thomas
Providence Group Realty - Plano, TX
​Broker, SRES®, BPOR, MCNE, ​Certified DRS Agent™

Oh, man! I had chickens on my mind and clicked to read expecting an entirely different subject! :-)

Seriously, this was a great article. Our MLS in the DFW Metroplex doesn't permit personal property listings. We frequently see attempts due to agents misunderstanding the kind of property they are listing -- usually mobile homes or RVs that are on leased lots. I am surprised to learn that a cooperative housing could be listed in any MLS. :-)

May 07, 2015 11:06 PM
Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

We have some CO-OPS nearby and they have minimum requirments to enter in. It is worth looking into as there is a waiting list

May 07, 2015 11:29 PM
Michael Setunsky
Woodbridge, VA
Your Commercial Real Estate Link to Northern VA

Candy Miles-Crocker Good assessment of coop ownership. Downside - If a condo goes into foreclosure only the condo owner is affected. If a coop goes into foreclosure, every owner is affected.

May 07, 2015 11:42 PM
Sussie Sutton
David Tracy Real Estate - Houston, TX
David Tracy Real Estate for Buyers & Sellers

Very good information.  I never have listed or sold a coop. I am not even sure that we have them in the Houston area, I am guessing we do. It seems like every time I log on to Active Rain I learn something new.

May 07, 2015 11:59 PM
Raymond Denton
Homesmart / Evergreen Realty - Mission Viejo, CA
Casta del Sol Realtor

Laguna Woods is a 55+ community near me, with over 6,000 co-ops. Homeowners living there call me routinely, wanting to get a Reverse Mortgage, but I can't help them, because HUD doesn't offer FHA financing with co-ops.  Several of my Clients moved, just because of that.  It's a shame, because they really liked their homes.

May 08, 2015 12:51 AM
Nina Hollander, Broker
Coldwell Banker Realty - Charlotte, NC
Your Greater Charlotte Realtor

Having started in the real estate business in New York City where coops were 80% of our market and having been a coop owner myself, I understand just how different this process can be from buying "real estate." Many people truly don't understand the difference between a coop and condo and you did a great job explaining it, Candy.

May 08, 2015 10:47 PM
Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
Buy Daytona condos for heavenly good prices

Candy - good post. Coming from New York, not only I know about them, I used to live the in the biggest Co-Op in the world - the Co Op City in the Bronx. Was a shareholder.

As for Board Approval, our condos here in Daytona also require approval of the buyer. Some Declarations give the right to the Board to reject, and not to disclose the reason. And it is perfectly legal...

May 09, 2015 01:45 PM
Praful Thakkar
LAER Realty Partners - Andover, MA
Andover, MA: Andover Luxury Homes For Sale

Candy Miles-Crocker I know for sure, Coop has their own limitations when it comes to selling them (and buyers must be aware that the same will apply to them when they are ready to sell.)

May 09, 2015 02:32 PM
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

Anyone thinking of buying a coop in your area should call you to be their agent.

May 09, 2015 11:41 PM