What is the real price?
The asking price is not the whole price. Add your share of the joint debt to get the total price, the figure you actually compare homes on.
total price
Asking price or your bid
Stated in the sales prospectus, 0 for freehold
How we calculate
The total price is the purchase price plus your share of the co-op joint debt. It is the real price of the home, and the only figure it makes sense to compare two flats on. A home with a low asking price and high joint debt can cost as much as a dearer freehold.
The joint debt shows up in the shared costs
You do not pay the joint debt in cash. It is paid down through the shared costs each month, together with running and maintenance. So high joint debt means a lower purchase price, but higher shared costs, and those costs can rise if interest rates go up.
A freehold home has no joint debt
If you buy a freehold home, set the share of joint debt to 0. Then the total price and the purchase price are the same. In return you pay 2,5 % document duty on a freehold, which a co-op is exempt from.
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