Note: The following explanation is specific to Washington State.
In different states, words such as co-op, apartment, or condo mean different things to different people. However, in Washington, we have different types of properties which are mainly categorized as either a single-family home, townhouse, condominium, apartment, and co-op.
What is a Co-op?
Co-op stands for cooperative. A co-op is a multi-unit building where each resident has an interest in the entire building, and a lease (or shares of stock) enabling the owner to occupy a particular apartment unit there.
What does it mean to buy into a Co-op?
Co-op residential buildings are a form of homeownership and a co-op is something you can buy, but the difference is that you won’t actually own anything besides shares in the building.
For example, buying co-op shares is similar to how you would buy shares of a tech company. These shares go along with a specific unit within a particular co-op. Each of these units in a co-op is allocated shares in the corporation based on square footage, room count, views and other attributes.
So, you will be able to live in a unit exclusively, however, the form of ownership comes in at ownership of the percentage of the co-op. So, if there are 50 people owning building shares of a co-op, the overall ownership will be split 50 ways.
It is typical for co-op buildings to have shared duties and chores, whether that’s vacuuming the hallway or washing the windows, it is a collaborative community living environment. Because everyone who lives in a co-op is a fractional owner of the same space, they all work together to handle the upkeep and maintenance of the building.
Are Co-ops Popular in Seattle?
In the Seattle area, co-ops are not necessarily popular choices for homeownership, but they do exist. It is not quite the same as regular real estate, but it can be a viable option and they oftentimes can be more affordable.
The Bottom Line
If you are interested in buying something that you can live in but you don’t have the money to buy a condo or a single-family home, a co-op could be a good option for you (although financing can be a bit tricky).