In several important ways, cooperative apartment "ownership" differs greatly from other types of real estate ownership.
One of the most significant differences between coop apartment "ownership" and the ownership of other types of real estate is that a coop apartment owner doesn't actually own real estate.
Rather, he or she owns shares in a corporation that actually owns the real estate and the owner of those shares receives a lease to occupy an apartment in the cooperative.
It is because of this difference, unique to this type of property "ownership," that when determining the value of a coop apartment, only recent sales of similar coop apartments can be evaluated.
Other types of apartments, such as condo apartments, represent a completely different type of property
ownership and are generally more desirable for a number of reasons.
As a result, condo apartments are typically worth considerably more than coop apartments of similar
size and utility, and with similar amenities and are not suitable for comparison when valuing a coop apartment.
Despite these differences, the method by which a coop apartment is appraised is similar to how other types of residential real estate are valued.
The primary method of valuation for a coop apartment is known as the sales comparison method. Simply stated, the value of a particular coop apartment is derived by comparing it to other similar, recently sold coop apartments in the same building or in other comparable buildings in the immediate area.
Adjustments are made for differences between the apartment being appraised and the recent sales being used for comparison, after which a final opinion of value is concluded.
Some of the key features of a coop apartment that are evaluated during the appraisal process include, square footage (gross living area), number of bedrooms and bathrooms, floor location, views (if any), as well as overall condition, including any recent updates and amenities.
Also, when evaluating similar recent sales from other buildings in the subject apartment's market area, building amenities, maintenance fees and a number of other factors are considered.
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