Condos vs Co-Ops: Choosing the Right Chicago Property for You


Chicago co-op building

One of Chicago’s beautiful luxury co-op buildings at 209 E Lake Shore Drive

Many of my clients begin their search for luxury real estate in Chicago with a property type in mind: single-family home or condominium. The perks of a condo are abundant—many high-end buildings come with seemingly endless amenities, there is no snow to shovel or lawn to maintain, and condos here offer as much square footage as you would find in the suburbs.
But once you’ve decided on a Chicago condo purchase, you might then have another consideration: condo or co-op?
With cooperative buildings (commonly called co-ops), buyers purchase a share of the entire building, versus a condo, in which a buyer purchases the actual property of the unit for sale. As with many real estate decisions, determining which is the better option for you depends on your lifestyle.
Benefits of Co-Op Buildings in Chicago
One of the great things about co-op buildings in Chicago is that these are not “cookie-cutter” buildings as you might find in other cities. Here, co-op buildings are often pre-war, established buildings with tons of character and elegance.
Vintage buildings offer a variety of layouts, with classic features like large dining rooms, detail work and built-ins that make each unit unique from the next. And a vintage co-op building in Chicago certainly doesn’t mean outdated. The luxury co-ops (like many of the buildings that line Lake Shore Drive, including several Mies van der Rohe buildings) have earned a level of panache that has been built over many years, and you feel it the moment you step into the lobby (if not from outside the front doors!)
Buying a Chicago Co-Op is a Different Process
The difference between a condo and a co-op starts with your real estate search, and there are a number of differences along the way, including:
Time to sell: Luxury co-ops typically do not sell quickly. For one, the unique qualities of these buildings are usually very attractive to buyers coming from places like New York and San Francisco, and finding an out-of-town buyer doesn’t happen quickly. Secondly, potential buyers of a coop must go before the board, and that can be an unpredictable, lengthy process as well.
Financing: Borrowing a mortgage for a co-op purchase is also different. Lenders may have more questions than they would for a condo purchase, with additional considerations such as: if more than 10% of the building’s units are owned by a single investor; if too many units are sitting empty; or if too many association members are behind on their dues. If any of these are present, that could be cause enough for a lender to turn down a loan for an otherwise qualified buyer.
Some lenders keep track of this information on their own and maintain a list of pre-approved buildings, which could greatly simplify the process for both the bank and the buyer.
Board approvals: The buyer of a co-op goes through fairly intense scrutiny from the co-op board to gain approval for the purchase. The approval process is mostly based on financial standing, and would likely require the buyer to disclose assets.
And some boards may put limits on the method of financing itself. Some may not allow a purchase with a mortgage or others may limit the amount of the the purchase price that can be financed. If the buyer is obtaining a mortgage, the board might require him or her to show proof of cash reserves in the amount of the purchase price.
If a buyer does need to show cash assets, it may be possible to take out a margin loan against their stock portfolio, which is considered cash. That could help a buyer get approval from the board or make a more competitive bid if there are multiple offers.
If you’re deciding between a co-op and a condo, I would be happy to discuss more details about the pros and cons of each and help determine which is right for you and your lifestyle. Contact me at (312) 498-5080 or email me at