Adams Stirling PLC


Process | Flowchart

For many reasons, condominiums are generally more marketable than co-ops which is why stock cooperatives and community apartment (i.e. own-your-owns) projects often convert to condominiums.

Although there may be many reasons for converting, the primary incentive is greater ease of financing which leads to higher property values. Instead of a single mortgage on the entire property with shares of stock held by tenants (the stock cooperative model), members actually own real estate in the form of air space bounded by the walls, ceilings and floors of a unit. This gives owners more conventional collateral for a loan, which makes it much easier to finance as well as buy and sell units. The benefits are summarized below:

Lenders. Lenders are more willing to lend higher amounts for condominiums than co-op apartments, and rates charged by lenders for residential mortgage loans are generally lower than rates for underlying co-op building mortgages.

Buyers. Prospective buyers of condominiums don't have the rigorous purchase application and interview processes that co-ops do.

Lower Dues. Dues are lower because a condominium association's operating budget is generally lower than a co-op's (because it does not include property taxes which are paid by individual owners).

The downside to conversion is the initial cost of the conversion itself. The fees for lawyers and engineers, title insurance, mortgage costs, and other associated costs can be significant. However, the resultant increase in property values can also be significant. Because condominiums have a wider market appeal, they generally sell for 15 to 25% more on average than co-ops.

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Adams Stirling PLC