Unrepresented renter and a broker's fee

There was a discussion on these boards a few months ago with a renter from out-of-town who managed to do that on a high-end listing on the East Side ... around $10K/month I think .. and got the fee knocked down to one month. Whether brokers on going to do it on lower-end listings is going to depend on the broker.

ali r.
DG Neary Realty

I believe you can get more out of the situation as follows. Put in a low offer, and sometime towards the end of offer's negotiation, ask for a reduction from 15% to 12% (the corporate rate), which is standard and easy. For the broker, it still gives them a much more preferable outcome than showing and waiting for the next customer, maybe co-broking for 7.5% or maybe getting a no-broker customer who insists on 1-month (8.33%). There's a small chance that the next customer will be one-sided and agrees to pay 15%, but the extra effort and low likelihood of improving on 12% will make the broker highly-motivated to make your offer work.

Why am I insisting on making the broker happy? Well, the question is whether you can get more from the broker's incentives than from a difference in the fee at 12% vs. 8.33%. Suppose you're negotiating a 3-year lease, or your plans for staying are that long. The 3.67% difference amortized over 3 years works out to 1.22% per year. So, on a $5000 rental, that's $60. Do you think that for the extra $60 in fees you can extract a better rent from the landlord because the broker wants to make your deal happen? I'd argue "yes": your broker would push hard enough for you to get a rent that is $100 or more better.

I think you also want to take the situation of the LL into account. If you have a large professional LL, the broker will have little influence on the price negotiated. On the other hand, if you have a foreign LL who is at the whim of the broker, the broker has a lot of control over what price the LL will take.

That's a very good point, thanks for that. I'm going to take your advice. It makes sense.
And if I like the place (and get the longer lease) and they are able to negotiate the rent down for me, it's win-win.

Thanks

Perhaps more like win-win-lose. If I were to ever rent out a place in NYC, I would definitely pay the broker's fee myself and predetermine a one-sided and co-broke amount. I think for what effectively becomes 3-5% over, say, 3 years, the for-fee market demands a 10%+ discount compared to the same thing no-fee. Too many renters simply have an irrational aversion to the fee.

Best of luck in your search.

>Any one have any experience renting an apartment, unrepresented, and the broker's fee being knocked down to 7.5% from 15% (because there's only one broker in the transaction.)

Yes, shouldn't require too much head banging with a broker who focuses more on sales and values more his relationship with the owner than worrying about the differential which may disappear if you disappear and another prospect comes along but has a broker. More likely though, 1 month seems to be a round number and isn't that far off from the 7.5%.

I have yet to pay a fee, but in my friends' experience:

For a smart broker, it's what the market will bear -- if he/she is busy and the unit is priced high, you can easily talk the fee down.

For other brokers -- the lazy, slimey, etc. -- always start low and/or offer cash under the table. If they still insist on 12% or more, then bring in another broker -- if you are paying for representation might as well get it.

so one more question...I'm nearing a deal here, but I feel like I need to talk directly with the owner of the apartment, to get some understanding of what they are willing to do (maint. wise) as well as get a feel for who they are. If I'm doing business with them for 4 - 6 years, I kind of want to know who I'm working with.
Do you think this is an unreasonable request of the broker? to allow me to talk to them directly. any thoughts or help here?
thanks

Some landlords want to meet their tenants. Some do not. To be on the safe side, I would present the questions about "what they are willing to do" to the broker, adding, "I'd be happy to speak to the landlord directly, if that would be easier." That should elicit a response that can help you gauge where the landlord stands in terms of personal interaction.

If you want a truly hands-on landlord, you may do better sticking with "for rent by owner" listings. Landlords often use brokers as an insulating layer between themselves and their tenants, because they don't want a personal relationship. I'm not saying your questions aren't legitimate, just tread a little lightly so you don't come off as glommy and needy. As in most relationships, that's a turn-off.

Tina
(Brooklyn agent)

And it's common that for all ongoing issue's with the apartment (broken sink for instance) I call the broker, who is the go-between?

You will get the landlord's contact info at lease signing, if not before. Once you take possession you would deal directly with the landlord (or the super, or the property manager - your broker should be able to answer that question).

>And it's common that for all ongoing issue's with the apartment (broken sink for instance) I call the broker, who is the go-between?

If you don't know the answer to this significant question, should you be renting here?

very unhelpful as always.

As always, huh. What is your answer to the OP? And why are you only responding to my second posting, not the first posting ... was that helpful but you couldn't admit it? Or no?

Columbiacounty, I did a search on streeteasy on you to see if you've been helpful in the past, maybe in contrast to today.

Can you explain this thread:
http://streeteasy.com/nyc/talk/discussion/23611