Happy Thanksgiving

Happy Thanksgiving to all of you and your families.

May this Thanksgiving holiday give you many reasons to be thankful.

Wishing you and your family a Happy and Healthy and Safe Thanksgiving Day!

 

 

 

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10 Great Places to Retire in the U.S.

10 Great Places to Retire in the U.S.

Your retirement planning may include visions of a home close to the beach, mountains or a lake. Or maybe you're hoping for a Main Street kind of place, a walkable community or a budget-friendly locale.

Bankrate researched median home prices in some of the United States' top retirement spots, as outlined in "America's 100 Best Places to Retire," edited by Elizabeth Armstrong.


Median home prices in the 10 places Bankrate selected from the book's "top" lists range from $125,000 in Danville, Ky., to $639,500 in Carlsbad, Calif., with many homes priced in the high $100,000s to the low $200,000s.

Here's what you can expect from among the best places to retire in the U.S.:

Danville, Ky.

Price: $125,000


Area median price: $125,000


Features


• 3 bedrooms, 2 baths
• 1,456 square feet
• One-car detached garage
• Covered deck, open patio


This three-bedroom, two-bath ranch house built in 1950 has 1,456 square feet and is situated on a lot just more than four-tenths of an acre. The home is typical of what buyers can expect in Danville at the median price range, though for the same money, home shoppers can find three- and four-bedroom homes ranging from 1,300 square feet to 2,320 square feet.

Retirees buying in Danville typically are able to spend more -- in the low $200,000s, says Benjamin Guerrant, principal broker with Prudential Guerrant Real Estate.

Danville earned a spot among the "top 10 budget towns" with some of the lowest utility costs in the nation, Guerrant says. But the lifestyle here isn't just for the frugalati. Danville is home to Centre College, and its performing arts center brings in shows that rival what you'd see in Lexington, Louisville or Cincinnati, Guerrant says. "I've seen Mikhail Baryshnikov, Dolly Parton and 'The Wizard of Oz,'" he says. "It's a tremendous draw for talent."

Danville also ranked as a "top 10 Main Street town," thanks to a well-planned downtown with four lanes and parking on both sides of the street, Guerrant says. "That has been very crucial to the success of businesses downtown," he says. What's more Main Street than a band? The Great American Brass Band Festival is held in Danville every June.

Danville is the kind of place where people stay and often work in the family business, says Guerrant, who is the fourth generation in the family real estate business. The town's funeral home has provided income for at least three generations, and the town bakery is into the fifth generation, he says.

Annapolis, Md.

Price: $350,000

Area median price: $396,330


Features


• 2 bedrooms, 1.5 baths
• 1,524 square feet
• Close to downtown Annapolis

For $350,000, you could get this two-story Cape Cod built in 1967 with a timeless floor plan. The home includes 1,524 square feet, two bedrooms, 1.5 baths, a sunroom, a fireplace and a basement, all on a one-fifth acre lot. This house was originally listed near the area's median price, at $387,900, says listing agent Maria Smith of Long and Foster Real Estate.

"You're in walking distance of the U.S. Naval Academy stadium, food shopping, banking, doctors, restaurants -- all within a mile," Smith says. "You can walk to the harbor and watch boats come in and out. Annapolis is a small town, just like the ones many people grew up in."

Annapolis was rated one of America's "top 10 four-season towns," but great living here is not so much about the weather as the location and lifestyle that go with it. What really draws people are neighborhoods within walking distance of downtown Annapolis, the U.S. Naval Academy and Annapolis Harbor.

In this price range, homeowners are typically looking for a two- to three-bedroom home with at least a bath and a half and a good-size yard, says Realtor Judy Lemmons of Long and Foster Real Estate.

Woodstock, Vt.

Price: $375,000


Area median price: $375,000


Features


• 6 bedrooms, 3 baths
• 3,580 square feet
• Built in 1850, partially renovated
• Fronts on a brook
• Detached garage/barn

This antique six-bedroom, three-bath home on just under one-quarter acre has been partially renovated to incorporate modern infrastructure and function. It sold for the median price of $375,000. It's an easy walk to the village center, says broker Robert Wallace of Robert Wallace Real Estate.

Woodstock, distinctive as a "top 10 undiscovered" and "top 10 small town," is set in the foothills of the Green Mountains. The town population is a mix of year-round and part-time residents, with people from many walks of life with diverse experiences, Wallace says.

The town has a legacy of historic preservation, many antique homes and a protected historic district. "The community is centered around a central village core with a fine assortment of shopping, restaurants and services that are very uncommon for a small village setting," Wallace says. "Woodstock offers a pleasant mix of a relaxed pace combined with the availability of recreational and cultural amenities."

Asheville, N.C.

Price: $199,900


Area median price: $192,500


Features


• 3 bedrooms, 1 bath
• 1,515 square feet
• Fireplace
• Two acres
• Covered front porch, rear deck

In the North Carolina mountain town of Asheville, this 1,515-square-foot, three-bedroom, one-bath house with hardwood floors, wood fireplace, covered front porch, rear deck, all on about 2 acres, sold for $199,900. That's just a bit over the area's median price of $192,500, says broker Jason Brodsky of Asheville Holistic Realty at Keller Williams.

Asheville, on two lists for "top 10 mountain towns" and "top 10 college towns," has a very high quality of life to cost-of-living ratio, Brodsky says.

Asheville offers amazing diversity and natural beauty," he says. "There is an abundance of culture, from traditional Appalachian crafts and music to world-class dining and entertainment." Asheville is home to the award-winning Mission Hospital. As for higher education, the city offers UNC-Asheville and Warren Wilson College, both recognized by Princeton Review and The New York Times as superior schools, Brodsky says.

Saugatuck-Douglas, Mich.

Price: $207,000


Area median price: $204,000


Features


• 2 bedrooms, 1 bath
• 1,003 square feet
• Deck
• Small pond, waterfall
• Oversized garage with loft

This two-bedroom, one-bath, 1,003-square-foot home with a pond and waterfall sits on just under one-fifth of an acre and is within walking distance of downtown Douglas, says broker Sandy Jo Shanahan of Shoreline Realtors. The garage has a loft perfect for a home office or studio.

Saugatuck-Douglas is marketed as a perfect getaway destination for a weekend or a season, but some people put down roots here. Named a "top 10 lake town" and "top 10 small town," the resort community boasts 19th century architecture, rolling dunes and lush orchards, as well as lakeshore activities and art galleries galore. In fact, it's often called the "art coast of Michigan."

"The best part about living here is that you are living in a community that others take their vacations to," Shanahan says. "You never have to go home -- you are. It's life as it should be lived."

Athens, Ga.

Price: $139,900


Area median price: $137,000


Features


• 3 bedrooms, 2 baths
• 1,360 square feet
• Fireplace
• Attached two-car garage

For $139,900 in east Athens, you could buy this three-bedroom, two-bath, 1,360-square-foot ranch house on a nearly two-thirds acre lot, built in 1998 with custom cabinetry, a fireplace and attached garage.

In Athens, one of the "top 10 Main Street towns," people enjoy the downtown area with its walkable communities and outdoor restaurants, 100-year-old homes, music, boutiques and art galleries, says Bruce Azevedo, owner and broker of Re/Max Top Performers in nearby Watkinsville.

Downtown Athens, within walking distance of the University of Georgia, also earned a spot on the "top 10 best college town" list. People enjoy the continuing education classes and cheering on the Georgia Bulldogs, says Realtor Pauline Juul of Prudential Blanton Properties. "In addition, there are two great hospitals, several parks and great shopping," she says. Athens is an easy drive to Atlanta and the mountains.

But living in walking distance of downtown and the University of Georgia will cost you more, with prices up to $600,000, Azevedo says. "If you want to feel like you're on the Riviera, I can put you downtown among the cafes with awnings and you're eating outside all day," Azevedo says. "They block the streets for bike races and music festivals. There's something for everyone."

Carlsbad, Calif.

Price: $639,900


Area median price: $672,500


Features


• 3 bedrooms, 2.5 baths
• 2,352 square feet
• Granite countertops
• Attached garage
• Lagoon water views

For $639,900, you could get this three-bedroom, 2.5 baths 2,352-square-foot townhome, with granite counters, a security system, Bose speakers and attached garage. On a lagoon, the home affords a water view from most rooms, and it's in a community with walking trails near a beach.

Homes at the median price in Carlsbad are typically larger and more expensive than retirees are looking for, says broker Tony Cannon of Keller Williams Realty. For substantially less -- $374,000 -- you could get a home more suitable for empty nesters: a two-bedroom, two-bath, 1,100-square-foot home with a patio, garage and a low-maintenance yard in a community with a pool and spa, on about one-eighth of an acre, Cannon says.

The weather and the beach are the main draws for retirees in Carlsbad, which ranks among the "top 10 beach towns."

"East Coast people come out here because the weather is nicer," Cannon says. "It's mild all year long. We get people from Canada, other parts of California, even Arizona and New Mexico. If you live within 5 miles of the beach, you don't need air conditioning."

Naples, Fla.

Price: $175,000


Area median price: $175,000


Features


• 4 bedrooms, 2 baths
• 2,272 square feet
• Double garage
• 2.3 acre lot
• Cathedral ceiling
• Large kitchen island

In Naples, the median price of $175,000 could get you into this contemporary four-bedroom, two-bath, 2,272-square-foot home built in 2002 on 2.3 acres, says Mark Weber, broker and owner of White Sands Realty in Naples.

Don't count on an easy walk to the beach or Old Naples at the median price. This home and others in the same price range are likely to be 30 or 40 minutes from the beach, Weber says. "A home in a great location about eight minutes from the beach goes for around $375,000 (used to be $840,000 in 2006). An older condo right on the sand with a Gulf of Mexico view goes for around $700,000 (formerly more than $1 million in 2006).

Ranked as both a "top 10 beach town" and a "top 10 art town," Naples' home prices vary, depending on proximity to the beach. High-end homes are going for about half of what they did in 2006, says Weber.

"Naples is very appealing to second-home buyers and northerners," Weber says. "We have extremely low crime to the point that many native Neapolitans still leave their doors unlocked when they take a walk. The palm-lined streets of Old Naples are home to outdoor cafes, boutique shopping and some of the most beautiful white sand beaches in the world."

Bend, Ore.

Price: $207,000


Area median price: $204,000


Features


• 3 bedrooms, 2 baths
• 1,997 square feet
• Two-car garage


For $207,000, you could buy this: a three-bedroom, two-bath, 1,997-square-foot home built in 2000, says Eileen Dees, principal broker of Steve Scott Realtors. This single-level mountain-view home includes an attached two-car garage, formal living room, family room, a patio, and a one-fifth acre lot with room to park an RV.

Bend ranks among both the "top 10 four-season towns" and "top 10 mountain towns."

Active retirees in Bend enjoy downhill skiing at Mt. Bachelor, cross-country skiing, snowboarding, an antique car club and more, Dees says. Those who want to give back to the community can find the right volunteer opportunity through VolunteerConnect.com.

"Bend is a great family town and a wonderful place to retire," Dees says. "I have two friends who are in their late 60s who snowboard. We also have incredible nonprofit groups to get involved with. I've lived in Bend for 19 years and still love it."

Coeur d'Alene, Idaho

Price: $179,900


Area median price: $180,255

Features


• 3 bedrooms, 2 baths
• 1,380 square feet
• Rock fireplace
• Two-car garage

This home is typical for listings near the median price, says Kim Cooper, broker at Select Brokers in Coeur d'Alene. The 1,380-square-foot, three-bedroom, two-bath ranch house was built in 1999 and has vaulted ceilings, a rock fireplace, open floor plan, patio, storage shed and two-car garage on a one-fifth acre lot.

In Coeur d'Alene, named a "top 10 lake town," the namesake lake has helped build the town's reputation. Along with water activities and beach, locals here enjoy wineries, art galleries, community theater and a casino.

"Coeur d'Alene is a place of four distinct seasons," Cooper says. "Each brings its own treasure trove of activities. With our multitude of lakes and rivers, hundreds of miles of trails and thousands of acres of national forest surrounding us, the opportunities for outdoor activities are endless. We enjoy the beauty of forested mountains by hiking or riding the trails. Yet, we are within 25 minutes of minor league baseball, hockey and Championship Arena football in Spokane, Wash., where we can also enjoy Broadway productions, symphony and a thriving art district."

As always in real estate, location is key. In the pricier towns, you can often move just a few blocks away from the trendiest, most desirable neighborhoods and save tens or even hundreds of thousands of dollars, which helps immensely when you do your retirement planning.

A location near the grandchildren often trumps all other considerations.

Article Courtesy of Karen Haywood Queen
Saturday, October 16, 2010

October 2010 Housing Trends Newsletter

Have a Safe and Happy Halloween

Enjoy My October 2010 Housing Trends Newsletter

Click On the Link Below to view Newsletter

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DIY Home Energy Audit in 6 Easy Steps

• 
  

  (New!)

  DIY Home Energy Audit in 6 Easy Steps

  Perform your own home energy audit to see if you need fixes that can lower your energy bills by 5% to 30% annually. Read

Visit houselogic.com for more articles like this.

Copyright 2010 NATIONAL ASSOCIATION OF REALTORS®

SEPTEMBER - 2010 Newsletter

 

SEPTEMBER - 2010 Newsletter Housing Trends eNewsletter

Welcome to the most current Housing Trends eNewsletter. This eNewsletter is specially designed for you, with national and local housing information that you may find useful whether you’re in the market for a home, thinking about selling your home, or just interested in homeowner issues in general.


The Housing Trends eNewsletter contains the latest information from the National Association of REALTORS®, the U.S. Census Bureau and Realtor.org reports, videos, key market indicators and real estate sales statistics, a video message by a nationally recognized economist, maps, mortgage rates and calculators, consumer articles, plus local neighborhood information and more.

Please click here to view the SEPTEMBER - 2010 Newsletter Housing Trends eNewsletter.



If you are interested in determining the value of your home, click the Home Evaluator link for a free evaluation report.

Mortgage Rate Sinks to 4.32 Percent

Mortgage Rate Sinks to 4.32 Percent



Average interest on 30-year fixed mortgages fell this week to 4.32 percent, matching the lowest level on record. Interest on 15-year loans, meanwhile, declined to 3.75 percent, setting an all-time low.






Investors have been flocking to the safety of Treasury bonds since the spring, which has driven down their yields and helped to keep rates at or near the lowest levels in decades.





Source: Boston Globe (10/01/10)

• 

  Make Your House FHA-Loan Friendly

  Know the basics of FHA loan rules and you stand a better chance of selling your house or condo. Read

Visit houselogic.com for more articles like this.

Copyright 2010 NATIONAL ASSOCIATION OF REALTORS®

30-Year Mortgage Rates Rise

30-Year Mortgage Rates Rise

Average interest on 30-year fixed mortgages rose for the first time since June, lifting to 4.35 percent this week from 4.32 percent last week and 5.07 percent a year ago, reports Freddie Mac. Rates for 15-year fixed loans held at 3.83 percent, the record low set last week.






Also, the five-year adjustable-rate mortgage averaged 3.56 percent, compared to 3.54 percent last week and 4.51 percent a year ago; and the one-year ARM fell to 3.46 percent from 3.5 percent last week and 4.64 percent a year ago.





Source: The Wall Street Journal, Amy Hoak (09/10/10)

Existing-Home Sales Hit A 15-Year Low

Existing-Home Sales Hit A 15-Year Low

 July home sales dropped 25.5 percent, according to the National Association of Realtors.

 August 24, 2010 Sales of existing homes plunged last month to the lowest level in 15 years, dashing hopes that a rebound in housing would jolt the economy out of its post-recession malaise.

The National Association of Realtors reported Tuesday that July's sales dropped 27.2 percent, to a seasonally adjusted annual rate of 3.83 million — the biggest monthly decline on record dating to 1968 and worse than what most analysts had feared.

"The decline wasn't unexpected, but perhaps the amount of the decline was," Paul Bishop, NAR's vice president for research, told NPR.

Celia Chen of Moody's Economy.com, who specializes in housing economics, called the latest data "unprecedented."

July's numbers were the third consecutive monthly drop: Sales of existing homes fell 5.1 percent in June and 2.2 percent in May, according to the NAR. Year over year, July sales sank 25.5 percent.

If unemployment goes higher than 10 percent, then the housing market is really looking at trouble.

- Lawrence Yun, National Association of Realtors' chief economist,


Home sales have tumbled since a stimulus package tax credit for first-time buyers expired at the end of April. In addition, banks have effectively shut out many potential buyers by tightening lending requirements.

"There are a lot of things in the mix," Bishop said. "The biggest is no doubt the expiration of the tax credit, but it's still only one factor."

Potential buyers are also concerned about whether homes — which have precipitously lost value over the past three years — are a good investment right now even though mortgage rates are at their lowest in decades. High unemployment and fears of future layoffs also have kept people on the sidelines.

Some analysts also believe buyers and sellers are in a standoff over home prices, and that sellers are maintaining unrealistic expectations about their home values and listing properties on the high end.

Meanwhile, foreclosures are running about 10 times higher than before the housing market peaked in 2006.

In past recessions, strengthening home sales have generally led a recovery. This time around, the continued weakness in the housing market "adds to the dangers that the economy might fall into a double-dip recession," Chen told NPR.

"Housing right now is unlikely to be ... a factor that is going to lead the economy out of recession. It simply is too weak," she said, adding that "without stability and a little bit of growth in housing, it will be difficult for the broader economy to generate a more self-sustaining recovery."

The NAR's chief economist, Lawrence Yun, believes the market will pick up again in the next few months if consumer confidence starts coming back. But he acknowledged that the job situation is a wild card.

"If unemployment goes higher than 10 percent, then the housing market is really looking at trouble," Yun told NPR.

At the current sales pace, the NAR said it would take 12.5 months to sell off the glut of 4 million unsold homes currently on the market. The median sale price was $182,600 last month, down 0.2 percent from June.

But the backlog of existing homes should be drawn down as the economy recovers if new construction remains weak, economists think.

"It's kind of in limbo," said William Wheaton, professor of economics at the Massachusetts Institute of Technology.

"I think when the economy recovers — or starts to recover — we'll see a pickup in sales," he said. "As long as the level of building activity stays low, the inventory should continue to decline and that will set the stage for a recovery in prices."

Article Courtesy of
Scott Neuman
and
NPR's Jeff Brady and Paul Brown contributed to this report, which also contains material from The Associated Press

Senate approves home tax credit extension

Senate approves home tax credit extension


By ANDREW TAYLOR (AP) – 3 hours ago

WASHINGTON — The Senate on Wednesday approved a plan to give homebuyers an extra three months to finish qualifying for federal tax incentives that boosted home sales this spring.






The move by Senate Majority Leader Harry Reid would give buyers until Sept. 30 to complete their purchases and qualify for tax credits of up to $8,000. Under the current terms, buyers had until April 30 to get a signed sales contract and until June 30 to complete the sale.






The proposal, approved by a 60-37 vote, would only allow people who already have signed contracts to finish at the later date. About 180,000 homebuyers who already signed purchase agreements would otherwise miss the deadline.






Reid, D-Nev., added the proposal to a bill extending jobless benefits through the end of November. Nevada has the nation's highest foreclosure rate, and Reid is facing a tough re-election campaign.






The Realtors group has been pushing hard in Congress for the extension. Mortgage lenders, the trade group says, have been swamped with borrowers trying to get approved by the end of the month. Many potential borrowers are unlikely to make the deadline.






"If Congress fails to act promptly, then prospective homebuyers might not get the benefit of the homebuyer tax credit, even though they have completed contracts," the Realtors said a a letter to lawmakers.






First-time buyers were eligible for a tax credit of up to $8,000. Current owners who bought and moved into another home could qualify for a credit of up to $6,500.






The $140 million cost of the measure would be financed by denying businesses the ability to deduct from their taxes punitive damages paid when losing lawsuits or judgments.


Article Provided by The Associated Press

Copyright © 2010 The Associated Press. All rights reserved

Homebuyer Tax Credit Deadline NOT Extended. But Senate Vote Adds Reid Amendment

Homebuyer Tax Credit Deadline NOT Extended. But Senate Vote Adds Reid Amendment

-----------------------------------------------------------------------------


News wires are buzzing with reports that the Senate just approved an extension of the homebuyer tax credit's June 30 closing deadline.






THESE HEADLINES ARE MISLEADING!!!






The June 30 closing deadline has not been extended...but it was accepted as an amendment to the Tax Extenders Bill. Under the amendment, borrowers who signed purchase contracts by April 30 would be given three extra months to close their loan and still qualify for the homebuyer tax credit. The new deadline would be September 30, 2010.






In a budget "point of order" vote taken this morning, the Senate actually voted against the bill that contains the homebuyer tax credit extension amendment. This forces the Senate Finance Committee, chaired by Senator Max Baucus, to rework the overall proposal before another vote is taken.

This Article Provided by Adam Quinones MND News WIre

NAR Commends Senators for Offering Homebuyer Tax Credit Extension, Urges Senate and House to Quickly Pass Legislation

Washington, June 11, 2010

The National Association of Realtors® today expressed thanks on behalf of America’s homebuyers to three Senators for introducing a measure to extend the present home-buyer tax credit closing deadline to Sept. 30. They are Senate Majority Leader Harry Reid, D-Nev., and Sens. Johnny Isakson, R-Ga., and Chris Dodd, D-Conn.






“As the leading advocate for homeownership and housing issues, NAR commends these Senators for their attentiveness and sensitivity to thousands of qualified home purchasers, who through no fault of their own, are not able to meet the closing deadline of June 30 for the homebuyer tax credit. Now we urge the Senate and the House to act quickly to pass this legislation and ease the minds and pocketbooks of these homebuyers,” said NAR President Vicki Cox Golder, owner of Vicki L. Cox & Associates in Tucson, Ariz.






The measure was offered as an amendment to H.R. 4213, a tax extension bill now in the Senate.






NAR estimates the number of home buyers who have qualified for the tax credit and met the contract deadline of April 30, but who would not be able to close their transaction by the June 30 deadline, could go as high as 180,000. Realtors® have reported as many as one-third of qualified applicants have been notified by lenders that their mortgages will not close before June 30 due to the sheer volume of applications in the pipeline.






“These are not buyers who just entered into the market. These are buyers who previously met all the qualifications for the tax credit, but find themselves at the mercy of a work-flow jam with the lenders or other delays and might not be able to complete the purchase of their homes,” said Golder. “It would be a tragedy for them not to be able to complete the purchase in time to claim the credit.”






Golder said she also wanted to make this clear: “This amendment does not extend the deadline for home buyers to qualify for the tax credit; it extends the deadline for closing the transaction, from June 30 to Sept.30. Since these applications were already in the pipeline and figured into the program’s cost, the extension of the closing deadline should not incur any further government costs.”














The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.1 million members involved in all aspects of the residential and commercial real estate industries.




Article provided by Realtor.org and NAR

Co-op vs. Condo


Differences between Cooperatives and Condominiums


Buyers looking to purchase an apartment in inevitably find themselves having to weigh the differences of ownership in a cooperative versus a condominium.

The vast majority of apartments available for purchase in New York  are either cooperatives or condominiums. The major difference is that purchasers of cooperative apartments or co-ops own shares in the entire building corporation. Condominium ownership is more like owning a single-family home in that purchasers own their physical unit.


Condo


In a condominium or "condo", the owner typically buys a deed giving them ownership of a particular unit in a building. In addition to the unit, the resident also owns a percentage of the common areas (the areas that all of the residents share, i.e. hallways, the roof, the parking lot, etc.) Condo owners pay a monthly fee in addition to their mortgage to help cover the cost of maintaining and repairing the common areas. When you own a condo, you own a piece of "real" property. You receive a deed, are assessed property taxes, and pay a mortgage just like someone who owns a house. Each condo owner receives his or her own personal mortgage and tax bill. As with any other piece of real estate, you are free to rent, sell, or sublet your unit to whomever you choose. The building is usually run by the condo association, which is made up of a group of elected condo owners. The board is mainly responsible for assessing condo fees, ensuring that the condo fees remain as low as possible, and settling disputes between unit owners.


Benefits of Owning a Condo


There are several benefits to owning a condo. The most obvious benefit is home ownership. When you buy a condo, you buy a piece of "real" property. This allows you to accrue equity in your home, just as if you owned a house. You can borrow against this equity or refinance if necessary. You are also able to sell, rent, or sublet your property to whomever you choose if you desire to do so. Another benefit of buying a condo is that the approval process is typically easier than it is for a house and even some co-ops. For this reason, condos are a good choice for young people, first time buyers and persons with less-than-perfect credit.


Disadvantages of Owning A Condo


While purchasing a condo can be a very sound investment, there are a few possible drawbacks that you should be aware of. As mentioned earlier, condos are considered real property. Therefore, you will be responsible for paying real estate taxes. And while the interest you pay on your mortgage is tax deductible, condo fees are not. Also keep in mind that your neighbors are free to rent their property to anyone they want. In addition to the possibly of having new neighbors that you may not get along with, too many renters in a condo can bring the property value down for everyone. Before moving into a condo, make sure that the number or renters is lower than the number of owners.


Co-op


A "co-op", short for Cooperative Housing Corporation, is a non-profit company whose sole purpose is to own and operate a residential building or complex. Buyers then purchase shares of stock in the building’s corporation. The larger the unit, the more shares they own. After purchasing the shares, the buyer is then given a proprietary lease to a particular unit. Since co-ops are the property of the corporation, the buyer does not actually own their apartment. Additionally, co-op shareholders will not receive mortgage or tax bills-these will be sent to the corporation directly. The corporation then splits all the bills among the residents via the monthly co-op fee, which helps cover mortgage payments, taxes, utilities, and maintenance.


Benefits of Owning A Co-op


Living in a co-op has several advantages. Many persons who live in co-ops are able to enjoy substantial tax breaks. Since they do not own any real estate, they are not responsible for paying real estate taxes (keep in mind however, that the corporation has to pay taxes on the property and a portion of your co-op fee goes to paying the building's taxes). Furthermore, you don't have to pay the transfer and recordation tax that is assessed whenever real estate is bought or sold. For persons concerned about protecting their privacy, co-op owners do not have to have public record of their property, since they do not own their apartment. This allows them to keep their address and purchase price confidential.


Disadvantages of owning a Co-op


While not actually being an owner of real estate can be of benefit to the co-op dweller, it can definitely have some disadvantages as well. For example, the co-op has final say over whom you can sell, rent, or sublet your property to. They even can impose restrictions on renovations and decor. Additionally, co-op associations are usually far more exclusive than condo associations, making the approval process more difficult. It should also be noted that since co-op fees cover such charges as taxes and utilities, they are considerably more expensive than condo fees.  Also, some co-op boards require you to put between 10% to 50% down payment, depending on each board. Some co-op boards require you to pay a Flip Tax when you sell the premises.  The Flip Tax can Range anywhere from 1% to 40% of your profit or selling price depending on the co-op board. In some cases they charge you a dollar value per share you own, or whichever is greater  again each board is different.


Pricing Differences Co-op vs. Condo


In general, in New York, cooperative apartments tend to have lower asking prices than comparable condominium apartments. But there are other factors to consider. Since co-op owners are shareholders in the entire building, the costs associated with the building such as the underlying building mortgage and the real estate taxes are the pro-rata responsibility of each of the shareholders. The number of shares allocated to each apartment is typically determined based on apartment size and location within the building.


Board Approval for Co-op Purchases


Each co-op building has a Board of Directors and its own set of requirements for prospective purchasers. Typically a would-be buyer must submit a full financial package listing all of their assets and liabilities and include copies of recent tax returns. The package is usually reviewed by the Board members or an admissions committee and then an interview is scheduled with the prospective purchaser. Boards can dictate the percentage of the purchase price that the buyer can finance. Boards can also require maintenance escrows or other forms of financial assurances. Condos generally do not require board approval.


Maintenance Fees in Co-ops and Condos


Since shareholders in a co-op own a stake in the underlying building, their maintenance fees sometimes referred to as common area charges, are generally higher than in a condo. However, since a co-op maintenance fee includes a portion of the underlying mortgage payment and local real estate taxes, a portion of the maintenance is tax deductible. Other costs covered by the maintenance charges in both co-ops and condos include staff salaries and electricity in the building common areas such as hallways and stairwells.




Other Considerations for Purchasing a Co-op or Condo


When considering the purchase of an apartment is a co-op or condo, it is important to look at the following items:




•House Rules – In addition to containing standard language regarding noise policies and rules about floor coverings, the House Rules also set forth the building policies on pets, washer/dryers, restrictions related to apartment terraces and balconies and any flip tax requirements. Flip taxes are fees paid to the co-op or condo at the time of sale of the apartment usually by the seller but sometimes passed on to the buyer purchase.


•Maintenance History – Find out how often the maintenance has increased in the last several years and ask why. Also find out if the building has imposed any assessments on apartment owners. Assessments are usually used to cover major building expenses such as an unexpected repair or a renovation of common areas.


•Reserve Fund – The reserve fund is the amount of money a building has set aside for capital improvements. A prospective buyer should feel comfortable that the reserve fund is large enough to pay for foreseeable capital expenses such as building repairs and mandatory façade inspections required by New York City.


Narrowing Down Choices - Co-op vs. Condo


In the end, whether to buy a co-op or condo might as well be determined by personal preferences about the actual building and unit. The majority of  apartment buildings are cooperatives especially the pre-War buildings. New construction tends to be built as condominiums.


While condos and co-ops are both sound and economical alternatives to the traditional single family home, they do have major differences, the biggest difference between the two is how the property is legally owned. There are a number of pros and cons with both condo and co-op living-taking a good look at the key aspects of both will help you decide which option is the best for you.