Types of Rental Listings for NYC Real Estate Agents
- By StreetEasy Team October 26, 2016
It seems like there are as many types of rental listings as there are pizza toppings in New York City. While we can’t help you with “sausage or pepperoni,” we can help you sort out types of rental listings in the Big Apple.
An “Exclusive Listing” is when an owner or landlord signs a “right to rent” agreement with just one brokerage. The NYC landlord PanAm, for example, notes on its website under FAQs that Mirador is its exclusive leasing agent.
Mirador Real Estate is our Exclusive Leasing Agent. All rental transactions in New York City are conducted with a Mirador Representative. Presently, our NYC apartments are no fee.
Therefore, if you as an agent wish to list apartments for rent, you will spend a lot of your time networking to find apartment owners/landlords and pitching them on the value of your services. Then you’ll want them to sign an “exclusive agreement” so that you are the only agent who represents the listing.
One of the things that you’ll learn early in your real estate career is the difference between an “Exclusive Agency Agreement” (in which your brokerage is NOT paid if the landlord brings in the tenant) and an “Exclusive Right to Rent” (in which the landlord promises to pay your brokerage when a lease is signed, no matter who brings in the tenant.) On the listing side, you’ll prefer the latter when you can get it.
If you are representing a client who is a potential tenant, then an exclusive listing makes your life easy, because you’ll know which agent you need to call. By contrast, an “Open Listing” is when the landlord/owner allows more than one broker to represent the property. The theory is that if several brokers compete, then the property will receive wide exposure. As far as compensation, it’s feast or famine: The broker who ultimately brings in the tenant receives the entire commission.
If you’re a tenant broker, though, you may see ads for the same property appearing with different broker contacts. When open listings go wrong, you might even see the same property appearing at different price points, as Agent A lists the property for the rent that the landlord would like — say, $2,500 — and Agent B decides that she’ll get more calls if she advertises the rent as $2,400 and then assumes that maybe she can talk the landlord down.
For this reason, tread very carefully when taking your clients to see open listings.
A “Co-Exclusive” is when two brokers each list a property. Who gets to show when, and how the brokers get paid, is worked out between the brokers and the client. Co-exclusives are fairly rare and tend to occur on high-end properties. For example, an investor may have a broker that he likes working with and wants to list with that broker, but also has the type of property that might appeal to another broker’s clients. For example, if the Brazilian economy is strong, an investor might want to list with a broker who specializes in wealthy Brazilian clients, and yet remain loyal to his regular broker. In this case, the investor would offer both brokers a co-exclusive. As is mentioned in this article in Hamptons magazine, a co-exclusive is most effective when the two brokers coordinate with each other.
The term “Limited Listing” is used in two ways. In a listing service, it is meant to signify that a broker is not offering full service on the property. There’s a good discussion here about limited service brokerage. For a practical NYC example, let’s say that your cousin Joe has an investment condo that he likes to rent out, and he does the showings and negotiating, but one day he decides that he’s not getting enough exposure for the property as a rental by owner. He might then ask you to put the listing into your firm’s computer system, or your trade association’s computer system — and if you do so, you might mark the listing “limited” to indicate to other agents that you are not showing the property or negotiating on it. In this sense, “limited” can be seen as equivalent to “courtesy listing” — i.e., “here’s the listing I put up as a courtesy to my cousin Joe, call him if you want to see it.”
A “limited listing” can also be a release from a large landlord — an owner or manager of an entire apartment building — to a few select brokers that he wishes to work with. Some brokers have on-site rental agents, and are happy to deal with any potential tenant who walks in; but others release their listings in a limited way expecting that the brokers they release them to serve as a line of screening for potential tenants.
Short-term Rental Listings
“Short-Term Rentals” are just that — rentals that run for a short term. Usually brokers mean “less than six months” when they talk about short-term tenancies, although many can be even shorter. A group of college students, for instance, might want to take an apartment in New York City from June through August wok summer jobs. Or, a person relocating to New York City for a job might want to take a rental for a month to explore the city and learn about its neighborhoods before taking on a longer lease in perhaps a different neighborhood.
Although there are a number of websites that match out-of-town visitors with vacant apartments, rentals with a term of fewer than 30 days are often in violation of the New York State Multiple Dwelling Law, which states that apartments should be permanent residences — with exceptions for house guests, and guests that stay during the residents’ absence, but do not pay for the privilege. (Fire concerns are sometimes stated as a reason that New York wants to regulate short-term stays, as are the fact that hotel taxes are a contributor to government coffers.) As a result, agents who do short-term rental deals often insist on a minimum stay of a month. Short-term rentals can be furnished or unfurnished. If you are representing the tenant be sure to clarify what will be supplied in the way of furniture, linens, cookware, etc.
A “No-Fee” Listing is a listing where the landlord agrees to pay the listing broker, if there is one. Large landlords often simply have on-site staff show available apartments. If the tenant goes directly to the landlord or listing broker, she incurs no brokerage commission. If you are the tenant broker, however, you wish to encourage the tenant to pay for your services. One possible argument here is that “no-fee” apartments, which are often in amenity-heavy buildings, can be expensive as far as having high monthly rents. It is arguably cheaper overall for a tenant to pay a brokerage fee on a less pricey rental of equivalent size with fewer bells and whistles.