To pay a rental fee or not

Yes, the rents appear to be going up, and those "one free month" offers appear to be disappearing. You can always try to negotiate the broker fees, but the discount might not be sizeable.

Here is what I'd suggest. Browse through this site and identify rental bldgs. you'd consider. Contact the leasing office directly. You never pay fees when you deal directly with the bldg.

With this said, I am not so sure about your budget...unless we are talking about tenements.

Good luck.

nybits.com

even on nybits, there is less inventory and higher prices I think, then this time last year.

Fees are mostly negotiable, but depending on your broker. I had one that was fine and another from a different company just blew me off like I was asking her for a loan. And the fee can be 1 month rent, 15% of yearly rent, or anything in between. If you have to use a broker, ask him upfront so you won't be shocked later on.

I'm a broker and my Fees are negotiable.. it all depends on the client most of the time i charge no fees cause the clients knew exactly what they wanted and it was an easy find...

Just for the record. The 'standard' rental fee is 15% of one year's rent. However, that fee is typically shared between two brokers, so the average commission that one broker would receive would be 7.5% (which is roughly one month of rent). I think that most brokers would want to do a deal at 7.5% (or 10% if they can) than not do a deal at all, so certainly be sure to inquire in advance as to what the commission may be.

You will find No Fee rentals in these two cases: you go to a rental building directly or you use a broker and he takes you to 'no fee' (ie, someone else paying the fee) apartments. If you are going to look at apartments in condos/co-ops, you are going to be dealing with a broker who is representing the apartment and potentially your own broker. In these cases, the listing broker may have their fee paid but your broker's fee will not be paid (in which case they may request just 7.5% or the full 15% from you).

The rental market has improved slightly. But just FYI, just because the incentives have gone, that doesn't mean you can't ask for them.

I have looked at about 10 places on the UWS in the last couple weeks (with no broker on my side) and have had 2 say no fee, 4 say 1 month and 4 say 15%.

By the way, no fee does not mean you don't have to pay out of pocket. There maybe an application and other fees from your building that can be a couple thousand bucks.

Matt- you do a disservice to brokers on this site by posting a comment like the one above. As a broker with several rental listings, I have direct renters come to me and look to get a lower commission. I am submitting the board package, preparing leases, calling the management company daily to rush the application, and doing more than the standard amount of work. lowering from 15% to 12% or even 10% if need be is fine, but to suggest a broker take 7.5% if direct is something I am even surprised your company would allow/recommend you to post. That is the reason so many buyers think they will get a better deal when going directly.

to the person who posted this- rents are much higher this year than last year, the market mentality has picked up. 5k for a 3 bed actually seems relatively cheap, the summer market is always peak- if you can wait until fall, you may have some luck. or a building wtih an application fee, etc.. as those sometimes sit on the market longer than others do.

I posted a lot of thoughts here in a thread I called "to fee or not to fee": http://streeteasy.com/nyc/talk/discussion/17682

But I fully acknowledge that June is a different picture in terms of tenant leverage than January.

jlnyc50, not sure it is worthwhile to engage you regarding 7.5% vs 1 month vs 12% or 15%, but if you think that the tenant's fee to you isn't enough, have you considered getting money from the landlord? It's their building where they have a % ownership that is demanding this board package, their building's management company, etc.
(Full disclosure, I believe tenants should push to have landlords pay fees except ONLY in cases where a tenant hires a broker to do a search, but of course tenants aren't always in a position of strength to do this ... hopefully that'll change over time).

jlnyc50
about 23 hours ago Matt- you do a disservice to brokers on this site by posting a comment like the one above. As a broker with several rental listings, I have direct renters come to me and look to get a lower commission. I am submitting the board package, preparing leases, calling the management company daily to rush the application, and doing more than the standard amount of work. lowering from 15% to 12% or even 10% if need be is fine, but to suggest a broker take 7.5% if direct is something I am even surprised your company would allow/recommend you to post. That is the reason so many buyers think they will get a better deal when going directly.

to the person who posted this- rents are much higher this year than last year, the market mentality has picked up. 5k for a 3 bed actually seems relatively cheap, the summer market is always peak- if you can wait until fall, you may have some luck. or a building wtih an application fee, etc.. as those sometimes sit on the market longer than others do.

i agree. it's interesting to see the shift in the clients as well. 3-4 months ago if they looked at one of my listings, they would ask if there was a fee or not. Now, they are asking what the fee is. I ALWAYS use 15% of the annual rent. Some aren't suprised, don't argue and just accept it, some try and negotiate. Which isn't fun for them with me on the other end. Probably averaging 12.5% of annual rent on my deals right now.

and here i was hoping that you had an unfortunate accident with the second avenue bus.

another thing to consider when deciding to pay a broker fee for a rental is how long you intend to stay in the apartment. Paying 15% of the year's rent could be tough to swallow if you plan on being there a year or two...but for a great apartment and a five plus year time line it could be a great investment.

here's hoping hones10 gets hit by the second avenue bus.

Owners who don't pre-negotiate and pay at least their own side of the fee are penny wise but pound foolish. Rather than agree to paying 7.5%, which amortized over 3 years works out to 2.5% of rent, they are forced to discount 10+% on the rent to attract the fee-paying renter. So many renters refuse to consider for-fee places that they end up being underpriced compared to no-fee places. That's why I've never had a problem with paying the fee: it's coming out of the owner's hide, really, and then some.

something to consider when paying a fee.
i sell to many investors. as a courtesy for buying with me, being a loyal buyer, etc etc. i help them rent out their apt at no fee to me the first year i rent it. here is an interesting thing to think about.

i list the rentals as "charge your own fee"- so i get a ton of rental brokers calling me, and renting my apts at full fee's to them and getting my clients high rent. my best example is a 9th fl 2 bed i sold. i listed for rent at 5400. i posted as charge your own fee, i did not collect one. the 16th floor 2 bed, same line, was on the market for rent at 5k. the diff in floors was huge- 16th fl had chrysler building views, and higher ceilings. I rented mine almost instantly, and the 16th floor sat another month or two. the broker who represented the renters charged them a 12% fee, and they paid all board package and condo fees.

often times, people end up paying full fees and not factoring it into the price, or paying much more. as much as renters will try and be savy, it is not like buying. when you rent, time is of the essence, you will have hardly any time to sit around and bargain if you have to move within a certain time frame.

Jinyc, your story seems to be one about not using a rental broker and doing your own search. Rather than directing the clients to the better-priced place, it seems their broker directed them to a place where the fees for the rental broker were higher. Is this an example of savvy renters? I don't think savvy renters use a broker on their side.

my story is implying that paying a fee does not always mean lower rent, as you implied above- it does not always come out of the owners pocket. if you re read what i wrote, you will see that renters TRY and be savvy, but it is possible since rentals happen so quickly.

there are brokers who use brokers to help them w rentals....

I did not use a broker. I did all my own research. When I found the place I wanted, I told the broker I would only pay 7.5% fee as that is what she would get if I came with a broker. She was not happy. But that is what we settled on. I was a good candidate with good credit. It was also a slower market (last March).

"if you re read what i wrote, you will see that renters TRY and be savvy"

How were these renters trying to be savvy in any way whatsoever? They used a rental broker (extra mouth to feed) and they missed a place that would have been a 15-20% better deal with its lower price and superior features. A savvy renter would have skipped the rental broker, contacted you directly, found the $5000 place on SE, paid the fee on that one and taken it.

Regardless, they found that your $5400 place was a better deal than the best of the no-fee places they saw. The difference to them was probably to an extent greater than the 12% fee they paid. Let's for the sake of argument say it was just equal to the no-fee places after consideration of the fee. The fact that there was a 15-20% better place than that in the for-fee market just confims my point: than you can find better prices in the for-fee market.

In any case, I was making a point about no-fee vs. for-fee. I don't think all for-fee places represent better value than all no-fee places, just that they do on the whole if you are a savvy renter. I'm just not sure how your story of one for-fee place vs. another for-fee place confirms or denies this. It just seems to say that there are some unsavvy renters in the for-fee market, and that paying a fee does not automatically make you savvy. I would whole-heartedly agree with such a statement.

inonada- i was not talking about those specific renters. renters in general. Please read what i wrote. i am not comparing my place to no fee places- im comparing it to an identical, if not better, apt on the market in the same buildig on a higher floor that was cheaper.

Yes, I have read and re-read what you wrote. It's a great story, so don't get me wrong, but I am still confused as to your point. Don't worry about it, though.

Also, what does this mean?

"there are brokers who use brokers to help them w rentals...."

This post remains?

columbiacounty
1 day ago
stop ignoring this person
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and here i was hoping that you had an unfortunate accident with the second avenue bus.

Still up?

inonada, I don't know what % of the market is truly savvy. And when you don't have savvy and you don't have abundant information, then you don't have an efficient market. I suspect that if landlords were paying the fee that brokers would make less money because the landlords have generally better information than the tenants, and therefore landlords would be in a better position to negotiate lower fees. I think the current system does hurt the tenant to the benefit of the broker and all-in, probably to the benefit of the landlord as well. People tend to view one time events differently than recurring events, e.g. the question, if you won $1000 today, what would you do with it ... people seem to treat it differently than if they got a proportionate $20 per week raise.

In Greene County you will not be hit by a bus, like you might be in Columbia County.

Come across the Hudson to Greene County.

I think many people NEED a broker - especially new New Yorkers, people with very specific wants/needs, or people who want to look for smaller, hole in the wall places. I think anyone who uses a broker should agree BEFORE the broker does ANY work how much the fee will be.

Also people with very little time to look.

I think also some so-called "savvy" renters will occasionally find a builindg that has a mandatory broker fee, and nothing can be done about that.

However, I pity people stupid enough to already live in New York and yet pay a fee to a broker to move into a no-fee unit in a Brodsky, Rockrose, Avalon etc building without even attempting to use the interwebs. Such people are morons.

Wow, the interweb, we got that a few years ago, and soon it'll be going over to columbiacounty.

so...where do you live in greene county?

Are you looking to make the switch?

where do you live?

Paying 15% of one year's rent is tough to swallow. I never had paid a fee for a rental apartment until I rented my current apartment 6 years ago and it still troubles me paying that fee for a rental apartment. I had always dealt directly with rental building leasing offices and never paid a fee. I decided the last time that I moved to make my search a little easier by going to a broker. What I found was that the less experienced brokers deal with rentals and that the broker that I used knew only a very little more about UES rental buildings than I did. If someone knows of an agency that has experienced brokers dealing with middle market rentals, then that might be a good service. Othewise, I second the advice given by both nyc212 and apt23.

lobster, should someone be hit by a bus as a result, as columbiacounty suggests?

no someone, just you.

That's a yes?

as noted earlier, whats your deal? what are you trying to prove? whats the fucking point?

Woah woah woah, no need to use language boy

language?

boy?

go fuck yourself. sideways with a 52 inch tv. does that work for you?

Wow, you have an imagination. I've never met anyone who thought of sex with a television.

Well, I guess I should be saying good for you for being so creative with modern electronics.

still not deleted:

columbiacounty
about 2 weeks ago
stop ignoring this person
report abuse and here i was hoping that you had an unfortunate accident with the second avenue bus.

And today columbiacounty says

"And I get absolutely no enjoyment from the potential misfortune of others. "

2 weeks later, this remains

columbiacounty
about 2 weeks ago
stop ignoring this person
report abuse

and here i was hoping that you had an unfortunate accident with the second avenue bus.

west80s
about 2 weeks ago
ignore this person
report abuse Just started looking for a 3br/2bath on UWS around $5K-$5.5K and so far a lot less inventory than I expected.

Very few apartments are no fee. Seems like the better and sometimes cheaper apartments have a fee. It almost makes sense to pay a fee to get a lower monthly rent - cheaper in the long run.

I looked at several apartments on the market on streeteasy and it seems like everyone has raised their prices by 10% compared to previous year. I really don't want to pay a fee (didn't pay last time) and a higher rate, but because of my move date, I think I may have to.

Is fee still a month rent? Is it usually negotiable?

Did the rental market improve leading to more fee apartments, or just due to summer?

found your apartment yet op?

I don't get this whole fee BS anyway. I basically pay someone to unlock a door to an apt. that I found on CL and that entitles you to 2000 dollars?? WTF?

Being a broker is a job pretty much anyone can do, why this job pays 50k plus a year is beyond me.

It has to be some NYC gov thing. In AZ, albiet a college town where i went to school, i never dealt with a broker let alone some ridiculous fee

I'm confused. I was under the impression that the rental market is incredibly weak and that all fees are being paid by the landlords, so what's the problem?

printer
about 10 hours ago
ignore this person
report abuse I'm confused. I was under the impression that the rental market is incredibly weak and that all fees are being paid by the landlords, so what's the problem?

you are either being sarcastic or don't know what you are talking about. which is it?

Time to let it go. Way too forced.

Time to let it go. Way too forced.

you buy a parrot to keep you company cc?

Who are you kidding at this point?

Who are you kidding at this point?

should i answer twice?
should i answer twice?

Fuck you

Me or me?

bitch
bitch

Fuck you

You or me?

fuck you twice

cc has lost the plot

I think we are both confused.

OK Jim so 2000 dollars to list something on CL? and to unlock a door? You're the a hole moron with a stupid sale job

Jim does not work very much, he just posts on SE.

As I said, SOME people do need brokers, even for RE, even in Phoenix (yes its true!) If you move to a new city for work, your company may pay for a RENTAL broker in cities other than NYC.

Here, its so hard for some that a broker does the legwork for you. Sort of like a personal shopper who shops for you, or a maid that cleans for you, or a restaurant where you order take-out. Sure you COULD shop, clean, and cook yourself, but sometimes its more efficient to pay someone else.

Jim Jones would certainly not be one I'd recommend, but I think its entirely ridiculous to go the other extreme and say that NO ONE should EVER use a broker. If money is no object and time is, it could be worth.

Of course for me and most on this board, a broker does not show us anything (for rentals) we would not see our selves, or at least very little. But we are all obsessed with real estate. Others are not. Some jr. i-banker working 80 hours a week or mom moving to NYC from LA who wants to be in Manhattan near good schools might rather pay someone to do it all for him.

...and my point about Phonenix RE rental brokers is based on the fact that I know many people who ahve relocated to elsewhere, and I was surprised to learn that you COULD hire a broker for rentals in other cities.

Update on our apartment search. We found a place via a friend who knew a super in a building that had an apartment available. It's near our current apartment, but not in a doorman building. But the building has a nice lobby and the apartment is 50% larger for about the same price. So we are happy.

We did have to pay a slight fee (6%). Even though we did not use an agent, the management company wanted its share :(

jason10006
about 4 hours ago
ignore this person
report abuse Jim does not work very much, he just posts on SE.

As I said, SOME people do need brokers, even for RE, even in Phoenix (yes its true!) If you move to a new city for work, your company may pay for a RENTAL broker in cities other than NYC.

Here, its so hard for some that a broker does the legwork for you. Sort of like a personal shopper who shops for you, or a maid that cleans for you, or a restaurant where you order take-out. Sure you COULD shop, clean, and cook yourself, but sometimes its more efficient to pay someone else.

Jim Jones would certainly not be one I'd recommend, but I think its entirely ridiculous to go the other extreme and say that NO ONE should EVER use a broker. If money is no object and time is, it could be worth.

Of course for me and most on this board, a broker does not show us anything (for rentals) we would not see our selves, or at least very little. But we are all obsessed with real estate. Others are not. Some jr. i-banker working 80 hours a week or mom moving to NYC from LA who wants to be in Manhattan near good schools might rather pay someone to do it all for him.

Jason, if you think that you (or anyone other than a good broker) can show you FIFTY PERCENT of the rental inventory available at any one time, than I have a bridge I can sell you. Last seen in Arizona.

Phony

jason, tell us about the tregny rental market report that you love....

Phony

Hi, i am a broker and wish to give you the scope of the rental market. Apartments' prices did went up plus there are shortages. A number of factors such as units no longer allow pressurized walls, folks renewing since they got bargain rent from prior year along w less buyers on the market.

Additionally, owners realize the shortages & have taken away the concession of paying our fee. hence, units that use to be no fee just a month or 2 ago are fees now.

i checked in the upper west side and there are very few no fees units from true 3 to flex 3. There are 2 units in the 90s that are no fees but the rent are in the 5600 range.

i do agree that one needs to be open to fee places. if you factor the fee over 12 mths, some fee places are CHEAPER than no fee places. If you plan to stay pass 1 year, the fee would seem like pennies for being able to lock in a great place at a low rental price.

I do have a place in columbus circle that is a flex 3 & 2 baths for less than $4700k w 1 mth fee. Again, if you factor the 1 mth fee, you are just paying $5091 per mth.

In sum, the rental market landscape has changed and it is no longer a tenants' market. One has to have a good broker to identify gems in not just no fee places but also fee places. Need to move quick and understand that a unit does get rented within the same hr...forget about the same day.

Lucky renting to you all.

Jamie 917.370.7806

"Apartments' prices did went up plus there are shortages. A number of factors such as units no longer allow pressurized walls"

that argument might rival irish carpenters in its potency of impact on manhattan RE

-I don't get this whole fee BS anyway. I basically pay someone to unlock a door to an apt. that I found on CL and that entitles you to 2000 dollars?? WTF?
Being a broker is a job pretty much anyone can do, why this job pays 50k plus a year is beyond me.

Stickman, the broker is really the marketing arm of the landlord. The system is broken because you end up being the one who writes the check to the broker, when the broker's service, as you point out indirectly, is for the landlord. If the landlord, who has a bit more leverage, were to negotiate with the door unlocker, that person might get only $1000 to find a good tenant, and maybe that means you would pay $50 more per month but not $100 or $150 per month ($100 and $150 are my proxy to equate to $2000 in fees up front).

-I do have a place in columbus circle that is a flex 3 & 2 baths for less than $4700k w 1 mth fee. Again, if you factor the 1 mth fee, you are just paying $5091 per mth.

Basically $391 per month extra as a fee to the broker. That is a lot. You could lease a Mercedes C Class for that monthly difference (albeit only one year).

There are enough no fee apts in this city that you have to be a complete idiot to pay a fee these days. Search for no fee on streeteasy - takes all of two seconds.

NYC10013
less than a minute ago
ignore this person
report abuse There are enough no fee apts in this city that you have to be a complete idiot to pay a fee these days. Search for no fee on streeteasy - takes all of two seconds.

Once again, that is absolutely correct, provided you are satisfired with seeing a small portion of the available inventory. There are more than enough posts here (and prospective clients who contact me every day) that bear this out.

Jim likes to insult people rather than form a coherent argument, but he is correct that many units, EVEN ON STREETEASY, or fee only. How many depends on how tight the rental market is. So Citi said last year over half of their surveyed LLs were paying the fee. Now its less than a third.

So NYC10013 is going the other extreme. You will DEFINITELY not be able to rent a huge number of units unless you pay a fee. If you are not picky, so be it. But if you want a terrace, view, certain school district...you might have to EVEN THOUGH YOU FOUND IT YOURSELF AND THE BROKER DID ZERO WORK. yes the system sucks. End rent control and it would all go away.

AKA you don't see this in London, San Francisco, LA proper, or anywhere else you might compare NYC to...

jim_hones10
about 11 hours ago

Once again, that is absolutely correct, provided you are satisfired with seeing a small portion of the available inventory. There are more than enough posts here (and prospective clients who contact me every day) that bear this out.

you are missing my point jason, whether the invenotry on streeteasy has a fee or not is irrelevant. my point is that most of the inventory never gets to streeteasy in the first place.

"you are missing my point jason, whether the invenotry on streeteasy has a fee or not is irrelevant. my point is that most of the inventory never gets to streeteasy in the first place."

Au contraire. Very little is NOT posted on the internet in one form or another these days. Did you need read about the justice department's little foray into this area, and REBNY's guidance on this topic? Each of the brokerage firms posts the majority of its inventory on their websites, and they can't stop meta-sites from searching them. Which is why Century 21 is the first of many to replicate SE - you can search OTHER brokerage's listings on C21's site soon!

Disintermediation has been mandated by the Federal government (under bush, no less) my not-friend.

Jason, you're all over the place. I said few end up on streeteast, not the web in general. Open listing are never picked up by streeteasy. Further, what makes you think that all listings get advertised anywhere?

still here

columbiacounty
about 4 weeks ago
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report abuse

and here i was hoping that you had an unfortunate accident with the second avenue bus.

Is this a suggestion that Jim be hit by a bus?

columbiacounty
about 3 months ago
stop ignoring this person
report abuse
and here i was hoping that you had an unfortunate accident with the second avenue bus.

Renting is not brain surgery. No fee apartments can often be gimmicks for higher price points. Fees, rents and costs are always a negotiation. Try focus on seeing the actual units[YOUR POTENTIAL NEW HOMES], then worry about the costs. There are some great Real Estate professionals out there and they are worth those fees.
We live in a different universe now. A huge problem is when everyone thinks they are a genius with the market. If such were the case, why then are we in such a mess now?
Working with brokers - The game is about people and making a real relationship of trust. Trust is a hard thing to immediately feel with a stranger. But rarely is anything ever done well when it is done alone. And remember making offers should never cost money!
Inventory - you could say that there is no inventory because maybe people are just so afraid from what has happened in the market that they do not want to move.
HOWEVER - When there is fear, there is opportunity. Example: I negotiated the sale of a West, Greenwich Village townhouse. We knocked nearly 3 million off the original asking. How did I do this? I watch the market 7 days a week, not because I love what I do but because it is what I have to do. And I had a great client who responded and acted in a precise manner. Knowledge is key!
Shop smartly, not preciously.
Good luck!

Every one is missing the point.
Brokers provide a service. Anyone who provides a service is entitled to get paid for it.
It is up to that person to decide how much their time is worth.
Apartment hunters can work with whomever they please, if you don't like someone, don't work with them.
If you have more time than money, do not call a broker. Walk the streets yourself and see how you do.
For those who brilliantly "find" their apartment on craigslist and feel they've done all the work themselves,
consider the agent who took the time to preview and pay to post that ad.
A broker saves you time by sorting through all the shit apartments and showing you exactly what you tell them you want ( at least they should be).
Saving time is saving money.
Again, you don't have to use a broker, but if you do, you do it on their terms.

Not on mutually agreeable terms?
What if the broker's terms are 15% but, per your third sentence a customer decides his time is worth 8.33%. No room for a deal, apartment is unrented until that 15% person comes along?

unless of course, which is often the case, your broker is full of sh!t and didn't really put much effort into anything.

The broker probably provided a greater service for the owner than the renters, not good for the renters and the broker should put his "i worked hard I should get paid" schtick back at the owner.

I wanted an apartment with a very hard to find "old" feel to it. I did the search and every single property that would qualify in my price range at the end of my current lease was with a broker who charged a fee. I can go to a large management company and pay no fee, yes, but sometimes the nicer large new buildings just feel cold and the other no fee buildings like Jakobson (sp?) properties are kinda run down.

Do I think the broker does anything at all other than upload a listing on here and show up once to show an apartment? No.
Did I find the owner through searches on my own and call him up? Yes and he would never pick up/call back.
Do I feel I have no other choice but to pay up? Yes.
Did I negotiate a lower fee? Yes.
Did I spend a ridiculous amount of time on streeteasy, nybits, urbansherpa, craigslist, asking people in those neighborhoods, etc.? Yes - so I did all the work and the broker just got paid out.

wad, at the end of the day that broker did his job. he found a qualified tenant (you) for HIS client (the owner). the apartment was marketed so that prospective tenants could find it and he brought one to lease signing.

urbanedgeny.com has a great list of buildings and owners and has no fee apartments in nyc, brooklyn, queens.