Since co-ops are not very common in Seattle, many buyers and agents are confused by the concept. Rest assured, the practical differences are very minor. Here are the main points to consider (in my opinion):
- In a co-op, property taxes are included in the homeowners dues. To the city, the co-op is one property that pays taxes as a whole, so the building pays them together.
- There are fewer choices for financing. Only a couple of banks will finance co-ops in Seattle, so you have less of an opportunity to shop around for mortgages and interest rates. We found the rates to be competitive, but there was less flexibility for downpayment amounts and loan structures.
- Co-ops are generally intended to be owner occupied, not rented out. Different co-ops enforce this differently; in the Los Angeles Apartments (our building), a unit may only be rented while the owner is actively trying to sell it. Exceptions are made if you are renting to a family member, or if you still live in the unit and rent out the 2nd bedroom.
- When you purchase a co-op, instead of getting a deed for property, you receive shares in the co-op. The number of shares is proportional to your square footage. This technicality doesn't seem to make any practical difference, but it does affect voting rights in the co-op. This particular unit is one of the largest in this building, giving significant voting rights to its owners!
- As is often the case with condos, the common areas, hallways, and exterior are maintained using the homeowners dues. Our co-op has hired a property management company to manage this, so the residents are not responsible for the upkeep, as might be the case at some other co-ops.
If you'd like more information about co-ops and financing, here are two lenders in Seattle who are experienced in co-op lending:
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