Explaining the difference between a TIC, a condo and a Co-op for San Francisco Real Estate - Part 3
A reader previously asked:In San Francisco, I hear a lot of people throw around the terms, tenancy in common, condominium and co-op and often use them to describe the same property in the same sentence. What is the difference between them?
Our answer:
In part 1 we talked about Tenancy in Common. In part 2 we discussed condominiumns. The third and final installment covers Co-ops as a form of ownership. Co-op is short for a Cooperative apartment. Technically speaking the building is owned by a corporation and ownership of each of the individual units is defined by a certain number of shares of stock in the corporation with a proprietary lease to occupy a particular unit. There is usually a requirement that when a unit is sold the buyer must be approved by the Board of Directors of the Co-op. The buyer submits a financial statement and personal and financial references to the co-ops board of directors. The board reviews the information and approves or disapproves the purchaser. Because of this approval process, often the escrow period needs to be longer than for a condominium.
The other difference is the financing of a cooperative apartment. There are only a handful of lenders in San Francisco who will loan on co-ops and of those, some will only loan on certain co-op buildings. The loan-to-value ratio is typically lower than condos and can be as low as 50% but are typically 70-75%. There are still a couple of buildings in San Francisco that do not allow any financing at all so units must be purchased with cash.
Be sure to check on the financing of a building to be sure you can get the financing you need or the loan you want.
- Janis Stone, Mick Orton
posted by SFResidence.com @ 12:40 AM
0 Comments:
Post a Comment
<< Home