Ten Things You Should Know Before Buying A Coop

Dated: 11/13/2016

Views: 1209

Ten Things You Should Know Before Buying a Coop

Coops are quite unique to the New York real estate market, and are found all over Westchester and Bronx County.  Before you consider buying a coop instead of a condo, or a single family home, here is some essential information about your new possible home Purchase.

1874 <a href='https://www.bronxandwestchesterhomes.com/index.php?types[]=1&types[]=2&areas[]=city:Pelham&beds=0&baths=0&min=0&max=100000000&map=0&quick=1&submit=Search' title='Search Properties in Pelham'>Pelham</a> Parkway South <a href='https://www.bronxandwestchesterhomes.com/index.php?types[]=1&types[]=2&areas[]=city:Bronx&beds=0&baths=0&min=0&max=100000000&map=0&quick=1&submit=Search' title='Search Properties in Bronx'>Bronx</a>, NY 10461What is a Coop?

Coop stands for “Cooperative.”  Ownership is established through buying coop shares and a lease agreement, which you receive instead of a deed.  Coop owners own the shares to the apartment as well as a percentage ownership of the building and probably the land, with all the other coop owners.

Everyone looks out for everyone

Coop shareholders share the expenses, cost of repairs and liability for the building, because of this coop owners  naturally developed an “everyone looks out for everyone” mindset.

The coop will receive one property tax bill, one water bill and probably one heating bill and everyone will be responsible for paying these common expenses.  This means that if one owner decides not to pay his portion of the bills, they are still owed.  This is very different from a condo, where if your neighbor decides not to pay his property taxes, the town will only go after him for the money, in a coop, these shared expenses become everyone’s responsibility.


Because of the shared responsibility on  common expenses  coops have naturally become more restricting, and generally have more rules for what is and what is not allowed.

Housing Rules & By Laws

Coops have written rules by which the coop members must follow.  These rules are either called housing rules or by laws and should be one of the first documents you collect if you are serious about purchasing a certain coop. 

Coop members are not allowed to make up the rules as they go along, any changes to the by-laws or housing rules must go through a voting process at a board meeting.  Board meetings are normally held once a month.

It is important to thoroughly read through the housing rules and by laws before you Purchase so that you fully understand what restrictions will apply.

Occupancy & Renting

One of the most important rules you can know about any coop is who will be allowed to live there.  Some coops only allow the owner to occupy the apartment, typically this is done when the coop has gone through too many bad experiences with renters.

If the coop does allow renting there may be restrictions such as a waiting period before you are allowed to rent, or having the renter apply to get board approval.  There may also be a time limit on how long you are allowed to rent the coop. 


Because of the extra rules, and restrictions, coops tend to sell for less money than condos.  This provides an alternative to condos if they are out of your price range.  Here is a breakdown for the average sales prices for coops in Westchester and Bronx County for 2016.

# of BedroomsWestchester CountyBronx County
One (1) Bedroom$285,105$140,485
Two (2) Bedroom$445,490$275,206
Three (3) Bedroom$600,910$439,490

Information for pricing collected from the Hudson Gateway Association of Realtors MLS.

Financing & Down payment

For the most part most coops can only be Purchased with conventional financing.  Programs like FHA and VA cannot normally be applied to purchasing a coop. The coop itself may have guidelines for required down payments of 10, 20, or even up to 25%.


Coops will come with a maintenance payment that will pay for your apartment’s portion of the common expenses.  Maintenance payments typically cover property taxes, the water bill, heat, common grounds maintenance, and repairs for the building.  If you have to pay extra for parking or there is an assessment which will temporarily increase the maintenance to pay for an additional expense, this will all be collected at the same time with your maintenance bill.

Financial Statements

Each year your coop will put out a financial statement for the coop going through what money was collected and spent.  This is normally done by an accountant and will be used to examine a coops financial stability.  Financial Statements report maintenance collected, expenses, debts and cash reserves.

Flip Tax

A flip tax is a "tax" imposed by the coop board at the time you sell your shares to the next owner.  Flip taxes were created to defer investors from purchasing coops and reselling them for profit.

Flip tax amounts can be several thousand dollars or more and can really eat away at your profit at the time of sale.

Whats Next?

Coops make great homes for certain buyers.  If you want to own your own home and do not want the burden of taking care of an entire property, including back yard, roof and heating system, a coop or a condo may be an excellent alternative to purchasing.

If you found this information useful, please go ahead and share it! 

If you are ready to take the next step in purchasing your home,please give us a call!  (718) 679-0511.  We are here to help you through the home buying process and cannot wait to hear from you!

Ten things you should know before buying a coop.

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