Condo or co op for a first New York purchase

Co ops are usually cheaper for comparable space. That is the first thing everyone notices and the last thing that should decide it.

What you actually own. In a condo you own real property, a deeded unit. In a co op you own shares in a corporation and a proprietary lease for your apartment. Every structural difference downstream comes from that one distinction.

Approval. A co op board can interview you, require extensive financial disclosure, and reject you without stating a reason. Boards commonly set minimum down payments, often twenty percent and sometimes far more, and require post closing liquidity, meaning cash left over after the purchase. A condo has a right of first refusal and, in practice, a much lighter process.

Monthly cost. A co op maintenance charge includes your share of the building's property taxes and any underlying mortgage on the building. A condo common charge does not, and you pay taxes separately. Comparing a co op maintenance to a condo common charge without adding the condo's taxes is the most common mistake in the comparison.

Subletting. Most co ops restrict it heavily, sometimes to a couple of years after a waiting period, sometimes not at all. Condos are generally far more permissive. If there is any chance you will move and want to keep the apartment, this is decisive.

Resale. A restrictive board narrows your buyer pool when you sell. Foreign buyers, buyers purchasing through entities, and buyers with strong income but thin liquidity all lean condo. That narrower pool is a real part of why co ops trade cheaper.

When a co op is the right answer. You are buying to live in it for a long time, your finances are clean and documented, you do not need flexibility, and the discount is large.

When a condo is the right answer. Almost every other case, and specifically any case involving new development, uncertainty about how long you will stay, or a plan to rent it out later.

The discount is real. So is what you are paying it for.