If you want to live in an elegant building with very large square footage, you should consider moving to a co-op building. Before you start the process of looking, know the difference between purchasing the co-op and a Chicago condo.Most co-ops are priced less per square foot than a condo, however, the concern when purchasing a co-op is the monthly assessment fees. The fees are high, but include taxes which are deductible and also usually include the heat, door staff, parking and sometimes the electricity.
Since you do not own the unit, but rather shares in a corporation, you may be required to put at least 20% to 25% as a down payment. Note, some Chicago Gold Coast cooperatives do not allow financing, hence the need for a large amount of cash. In addition, in the Gold Coast co-ops, you may also need a large amount of liquid assets to be accepted into the building, and be prepared for a thorough screening of your assets as the corporation does not want to assume responsibility for another shareholder’s assessments.
Furthermore, since co-ops are usually older buildings, many of them have taken out loans or have special assessments to do tuck pointing and special repairs.
On the other hand, when purchasing a Chicago condo, the board doesn’t ask to review your financial assets and you physically own your unit. You should still check the financial health of the building because with a condo, its easier to ascertain if there are any financial issues.
Although I do not recommend a co-op purchase to every client, they can be an amazing choice for the right person. However, it is important to remember that although co-ops are typically priced lower than the “condo” market, they can be harder to sell and more difficult to finance than a condo. It is not unusual for a co-op unit to be on the market for six months to a year, so if you are planning on a relatively quick resale, a co-op unit may not be the best fit for your needs. That said, if you are looking for an elegant long-term home and your financial profile is up to a co-op board’s standards, a Chicago co-op could be just right for you.