Condos Vs. Co-ops: Ask the Agent

by Danielle Skowronek

In today’s Ask the Real Estate Agent segment, I’m going to talk about the difference between condos and co-ops. A lot of people have been asking about that lately, and while there are not a lot of co-ops in the D.C., Arlington, surrounding area, you do run into some, so it’s important to understand the difference if you’re searching for a condo or co-op.

Condos vs Co-Op Ownership

Most of the differences derive from the type of ownership, so it’s an actual difference in the type of ownership. In the condo, you own your actual unit, or home, from the walls in, as well as owning a percentage of the common elements, or limited common elements, so that’s everything else: the outside of the building, the lobbies, the pool, any amenities.etc. You own a percentage of those areas, along with everyone else in the building. In a co-op, it’s an actual corporation and you own stocks in it.

When you purchase a co-op, you’re buying the stocks and then getting a perpetual lease for the home that you’re going to own. The key differences are all based on the differences in those types of ownership. in a co-op, you’re typically going to have higher monthly fees, and that’s because almost everything is included- water, electric, gas, it’s all paid for by the corporation.

With a condo though, a lot of that type of thing is individually metered, so your condo fees are going to be lower, but then you’re going to be paying those bills separately. Your agent should be able to help you do the math so you can see what your best option is.


Taxes: Huge Condo vs Co-op Differentiator

Real estate taxes are typically covered by the co-op, which is another contributor to having a higher monthly fee. In a condo, your real estate taxes are paid for individually by you, and typically, those are included in your mortgage payment as part of the total escrow. That’s a huge difference there, in how the monthly fees are structured.


Another big difference is, co-ops are generally going to have more powerful Boards. The type of ownership in a co-op is going to give the Board more control, which can be a good thing or can be a bad thing, depending on the strength of the people on the Boards.


There’s also going to be different types of financing. Since the ownership is different, banks view the risk profile differently. And this can vary from city to city, but in the DC metropolitan area, there are typically fewer banks that lend in co-ops. Since fewer people are doing it, oftentimes, the terms aren’t as favorable for you as the purchaser.

Those are some of the key differences in big-ticket items. There are a lot more depending on your situation and that is why you will want to discuss with a real estate agent first.


If you have any other questions, we’d love to help you because it’s an important thing to understand the difference. And if you have any other questions, we’d love to answer those as well. We’re always eager to take new questions for our Ask the Agent segment, and you can submit them to us, and we’d be glad to answer them next time.

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