In New York City, brokers serve an integral role in the apartment rental process. From scheduling viewings to submitting applications, an effective broker can help you navigate the potentially daunting series of obstacles standing between you and your next apartment. Are you deciding whether hiring a broker is the right move for you? Read this guide to learn what to expect.
Why Hire a Rental Broker?
Not all apartments require you to hire a broker. In NYC, there are plenty of “no-fee” apartments, which you can rent directly from the landlord or management company. While no-fee apartments can save you a good chunk of change, there are several benefits to working with a broker:
- Saves Time. Apartment hunting can feel like a full-time job. If you don’t have time to pound the pavement looking at apartments, brokers can do the legwork to help you find apartments that meet your criteria (size, price, neighborhood, amenities, etc.).
- Share Knowledge. If you’re new to NYC, brokers can be crucial for helping you navigate the city, learn about different neighborhoods, and choose an apartment that meets your needs. For example, brokers can help you find an apartment close to a subway stop that makes sense for your commute.
- Provide Inside Scoop. Brokers have access to a wider pool of apartments than you would be able to find on your own, as many apartments are exclusive listings that you can only rent through a brokerage firm. Additionally, brokers often have existing relationships with NYC landlords, so they can help negotiate better deals for you, or give you tips to make your application stand out.
Standard Rental Broker Fee and Practices
Broker fees are typically based on a percentage or portion of the rental price. The industry standard is either 12 to 15 percent of the first year’s rent, or one month’s rent.
Fast Math: If you’re looking at apartments for $3,000/month, expect to pay either $5,400 (15 percent of annual rent) or $3,000 (one month’s rent) in broker fees.
Many brokers also charge application fees or credit check fees once you proceed with securing an apartment. Some things to keep in mind regarding standard practices:
- Don’t Pay Upfront. Since brokers’ commission is based upon securing you an apartment, be wary of any broker who tries to charge you upfront. Brokers typically collect their fee after you sign the lease. Along the same lines, don’t sign any binding documents until you are ready to apply for an apartment. Some brokers may try to make you sign an exclusivity contract that could end up trapping you down the line.
- Do the Math. Before agreeing to pay a hefty broker’s fee, do the math to make sure it’s worth it. Paying a fee makes the most sense if you plan to live in your apartment for longer than one year. While you’ll still pay the same amount up front, it will feel like less of a financial loss the longer you stay in the apartment.
- Look for Low-Fee. In addition to no-fee apartments, there are also “low-fee” apartments available in NYC, which range from 0-9 percent of the first year’s rent. Many landlords agree to cover a portion of the broker’s fee if they are eager to fill vacancies.
PRO TIP: Be sure to look out for signs that your broker may be getting double-paid (i.e., getting paid in full by the landlord but also charging you a full broker’s fee).
Signs of a Good Rental Broker
1. They respect your priorities regarding budget, criteria, and move-in dates
2. They educate you about neighborhoods, market trends, new listings, and what to expect from the rental process
3. They help you negotiate lease terms and stand out from other applicants
4. They communicate regularly and are responsive to questions
5. They discuss fees and practices honestly and upfront
Takeaway Tips
As with any service you hire, do your research! Check broker reviews on Yelp, ask friends for referrals, or use a reputable brokerage agency. Most importantly, don’t be afraid to switch brokers or move on if you aren’t getting a good vibe, or you notice that the broker isn’t following these standard practices. Remember that you are the client and deserve the quality of service you are paying for.
[This post first appeared in June 2017 and has since been updated.]
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