Many people have a misunderstanding about cooperative ownership and how it differs from condominium ownership. There are many differences that I will go into in a later posting, but the question asked most frequently is, “Why is the co-op fee so high?”
A co-op in Kalorama that I currently have listed for $775,000 carries a fee of $1003 per month. Gasp! More than a thousand dollars a month?
But is it really a higher monthly outlay than a similar condo? Maybe, but probably not. Take a look at the property I have listed versus some recent sales.
The $1003 co-op fee at 1870 Wyoming Street NW, #202, which has 3 bedrooms, 2 baths and is approximately 1950 square feet large, includes the following items that are usually covered in a condo fee.
- General Management & Oversight
- Common Area Maintenance (CAM)
- Exterior Building Maintenance
- Custodial Services
- Master Insurance Policy (covering the building)
- Water & Sewer Expenses
- Snow & Trash Removal
- Reserve Funds
It also includes the following things that might be covered in condo fees of another building.
- 24-hour security with a front desk attendant
- Heat throughout the apartment
- Extra storage in the basement
And it includes one major thing that is NOT included in a condo fee: PROPERTY TAX.
The contrasting examples below are taken from the Metropolitan Regional Information System, our local multiple listing database and are properties listed and sold this year by my colleagues in the industry.
Unit #418 at 3881 Connecticut Avenue NW, a 2 bedroom with den, 2 bath, 1550 square feet condo was listed for a similar $779,000. The monthly condo fee was $717, which included a parking space and maintenance of a pool and exercise room (not uncommon in the newer buildings). Property taxes were listed at $6478 per year or nearly $540 each month. Added to the fee, the new owner is paying $1257 per month, excluding utility costs, even if his taxes never go up! Is a parking spot, a pool, or a mini-gym important to you? If so, this might be a great deal, depending on what you would pay for these services elsewhere.
In a building without such amenities, Unit #604, a one bedroom with den, one bath, 1283 square foot condo at 1015 33rd Street NW, sold recently for $800,000, without parking. The condo fee was $644 per month and the taxes added a monthly charge of $369 for a total of $1013 before utilities.
Some cooperative fees also include montly payments toward an underlying mortgage held by the corporation, which you assume as part of your purchase. This reduces the amount you must finance through an institutional lender. Also keep in mind that mortgage interest and property tax portions of co-op fees are tax deductible; you get no such benefit from a condo fee. Check with your accountant to see what this means to you.
Yes, there are complexities involved and each co-op building is different, but then again, so is every condo building. Before you remove a cooperative apartment from consideration as a potential home purchase based solely on the fee, be sure to add up your total living expenses to ensure you are really making a fair comparison. You might be pleasantly surprised.
Friday, July 27, 2007
Thursday, June 14, 2007
A Loaf of Bread, a Quart of Milk and a New Listing Lead, Please...
Ok, so it’s not your standard answer when your honeybun asks, "What do you need at the store, dear?" Nevertheless, that’s what my husband, Kelley, came home with the other day.
Our new home has an enclosed side porch that, when added on years ago, was not connected to our central air conditioning unit. While conducting our home inspection last March, my inspector turned on the existing through-the-wall AC unit, which emitted a disgusting smell reminiscent of burning rubber. (And you were wondering what the term "as is" means?)
So, in anticipation of another hot, muggy DC summer, Kelley headed out to Sears to find a replacement unit. While standing in line waiting to pay for his purchase, he overheard a conversation between the two gentlemen in line behind him. They were disappointed at not being able to find the right real estate agent to represent them in the sale of a DC property.
Now, Kelley is well-trained and knows that if he finds a new client for me, there’s a steak dinner and a bottle of wine in it for him, so he turned and volunteered that his wife was in the business, adding that we even lived near the property they were discussing. Delighted, one of the gentlemen asked if he had my business card. Alas, he did not.
An unhappy ending, you think? Well, think again! When Kelley came home with his Sears receipt and handed it to me, on it was scribbled the name and phone number of the property owner. I called him and made an appointment for later in the week - and gave Kelley a handful of my business cards.
Now, I can’t say that this is going to happen often, or even that it will translate into a listing and a sale, but I do know that it’s nice to have an advocate in the checkout line at Sears. Maybe tomorrow I should send him to Home Depot...
Our new home has an enclosed side porch that, when added on years ago, was not connected to our central air conditioning unit. While conducting our home inspection last March, my inspector turned on the existing through-the-wall AC unit, which emitted a disgusting smell reminiscent of burning rubber. (And you were wondering what the term "as is" means?)
So, in anticipation of another hot, muggy DC summer, Kelley headed out to Sears to find a replacement unit. While standing in line waiting to pay for his purchase, he overheard a conversation between the two gentlemen in line behind him. They were disappointed at not being able to find the right real estate agent to represent them in the sale of a DC property.
Now, Kelley is well-trained and knows that if he finds a new client for me, there’s a steak dinner and a bottle of wine in it for him, so he turned and volunteered that his wife was in the business, adding that we even lived near the property they were discussing. Delighted, one of the gentlemen asked if he had my business card. Alas, he did not.
An unhappy ending, you think? Well, think again! When Kelley came home with his Sears receipt and handed it to me, on it was scribbled the name and phone number of the property owner. I called him and made an appointment for later in the week - and gave Kelley a handful of my business cards.
Now, I can’t say that this is going to happen often, or even that it will translate into a listing and a sale, but I do know that it’s nice to have an advocate in the checkout line at Sears. Maybe tomorrow I should send him to Home Depot...
Saturday, April 28, 2007
Moving and Other Pastimes
People’s jaws drop when I tell them I have moved 40 times.
In the beginning, I followed the family. My father was in city management and promotions meant moving from a smaller city to a bigger one over and over. It wasn’t until I went to college that I finally memorized my address: the Kappa Kappa Gamma sorority house at Florida State University.
(FSU was a self-proclaimed “party school” known for its Seminoles football team, its Flying High Circus alumnus Burt Reynolds and the 70’s streaking craze. Being a college kid in the early 70’s, it’s a wonder I can remember anything at all, but Tallahassee, Florida was south of the Mason-Dixon Line; it couldn’t compete with Ann Arbor or Berkeley when it came to recreational drugs and radical politics. That part of the 70’s just passed me by.)
After graduation, I began relocating in earnest with most moves being job-related. I greeted airline passengers in Florida, inspected cargo vessels in Michigan, checked passports in The Bahamas, wrote national policy in Virginia, hosted diplomatic parties in Germany, started a home improvement company in Maryland, trained law enforcement officers in New Mexico, administered benefits programs in Minnesota, developed property in California and ran a bed and breakfast in Washington. Until 1997, my average length of stay in a given area was 30 months.
I used to be at a loss for words when someone would ask, “Where are you from?” After all, I was homeless, a nomad, a will-of-the-wisp. To some, that sounded romantic; to others, absurd; to me, perfectly normal. But then I began to notice a pattern.
In 1981, I bought a little townhouse in Alexandria where I stayed until 1982. Then I bought a tract colonial in Silver Spring where I resided until 1986. In 1988, I returned to the area and bought a detached contemporary in Upper Marlboro and lived there until 1990. I came back to DC again in 1997, first to a Victorian rowhouse on Capitol Hill, then to another contemporary in 16th Street Heights, then to a duplex condo in McLean Gardens.
Wait a minute - it was now 2005! What was happening here? Despite all the house shuffling, was I starting to put down roots?!
Well, last month, after a short detour along the west coast, I made my latest move – the 40th – to a stone-front colonial in the NE DC suburb of Brookland. It’s a great house on a one-block, tree-lined street in a friendly, well cared for neighborhood. I love it here.
If you see me on the street, please say hello. Just don’t ask me if this is my last move…unless you want to see me grin like the Cheshire cat.
In the beginning, I followed the family. My father was in city management and promotions meant moving from a smaller city to a bigger one over and over. It wasn’t until I went to college that I finally memorized my address: the Kappa Kappa Gamma sorority house at Florida State University.
(FSU was a self-proclaimed “party school” known for its Seminoles football team, its Flying High Circus alumnus Burt Reynolds and the 70’s streaking craze. Being a college kid in the early 70’s, it’s a wonder I can remember anything at all, but Tallahassee, Florida was south of the Mason-Dixon Line; it couldn’t compete with Ann Arbor or Berkeley when it came to recreational drugs and radical politics. That part of the 70’s just passed me by.)
After graduation, I began relocating in earnest with most moves being job-related. I greeted airline passengers in Florida, inspected cargo vessels in Michigan, checked passports in The Bahamas, wrote national policy in Virginia, hosted diplomatic parties in Germany, started a home improvement company in Maryland, trained law enforcement officers in New Mexico, administered benefits programs in Minnesota, developed property in California and ran a bed and breakfast in Washington. Until 1997, my average length of stay in a given area was 30 months.
I used to be at a loss for words when someone would ask, “Where are you from?” After all, I was homeless, a nomad, a will-of-the-wisp. To some, that sounded romantic; to others, absurd; to me, perfectly normal. But then I began to notice a pattern.
In 1981, I bought a little townhouse in Alexandria where I stayed until 1982. Then I bought a tract colonial in Silver Spring where I resided until 1986. In 1988, I returned to the area and bought a detached contemporary in Upper Marlboro and lived there until 1990. I came back to DC again in 1997, first to a Victorian rowhouse on Capitol Hill, then to another contemporary in 16th Street Heights, then to a duplex condo in McLean Gardens.
Wait a minute - it was now 2005! What was happening here? Despite all the house shuffling, was I starting to put down roots?!
Well, last month, after a short detour along the west coast, I made my latest move – the 40th – to a stone-front colonial in the NE DC suburb of Brookland. It’s a great house on a one-block, tree-lined street in a friendly, well cared for neighborhood. I love it here.
If you see me on the street, please say hello. Just don’t ask me if this is my last move…unless you want to see me grin like the Cheshire cat.
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