using broker on exclusive vs bringing your broker

I don't know if brokers have a fiduciary responsibility to get the best terms for their client, but two things. First, brokers aren't exactly known as an ethical bunch. Second, even if attempting to act ethically people have a tendency to rationalize self-serving behavior. Welcome to the human race.

If the LL wants to set up such a situation in terms of who shows the apt, how try will be paid, etc., then fine. Just learn to use it to your advantage. Here's how I think it's best handled. Go see places by your self, put in offers, and have the exclusive broker work to get your offer through because of the one-sided deal you're providing them. They will talk up the good and downplay the bad. So yeah, the LL should take your 10%-below offer. Through this pressure, LL will come back at 5% below, you get the deal done at 7% below. Towards the last step, you tell the broker how you know the corporate rate of 12% rather than 15% is standard, if they could do that. Brokers are not going to blow the deal over this. If they say no, they risk pissing of the owner, seem like a flake (where did that tenant you spoke so highly about go), and face a potential split of the fee with the next guy.

Suppose you stay for 3 years, which amortized the fee to 4%. Now could you have done 7% below ask without the help of the broker pushing you? I'd argue that much (or perhaps all) of the fee can be recovered through this channel.

Using a smart broker, that has experience is key to getting any deal done.

An experience and tenacious broker can get you the deal, no matter what.

Your fault for dealing through a weak player. After all anyone can get a salesman license

And 98%just never make it. The other 2% is 1.5% silly and you are left with .5% that is good

Make sure you seek only the most experience brokers

It is not about being cute to your broker it is about getting yourself a smart team member to fed your quest

inonada
about 9 hours ago
ignore this person
report abuse I don't know if brokers have a fiduciary responsibility to get the best terms for their client, but two things. First, brokers aren't exactly known as an ethical bunch. Second, even if attempting to act ethically people have a tendency to rationalize self-serving behavior. Welcome to the human race.

If the LL wants to set up such a situation in terms of who shows the apt, how try will be paid, etc., then fine. Just learn to use it to your advantage. Here's how I think it's best handled. Go see places by your self, put in offers, and have the exclusive broker work to get your offer through because of the one-sided deal you're providing them. They will talk up the good and downplay the bad. So yeah, the LL should take your 10%-below offer. Through this pressure, LL will come back at 5% below, you get the deal done at 7% below. Towards the last step, you tell the broker how you know the corporate rate of 12% rather than 15% is standard, if they could do that. Brokers are not going to blow the deal over this. If they say no, they risk pissing of the owner, seem like a flake (where did that tenant you spoke so highly about go), and face a potential split of the fee with the next guy.

Suppose you stay for 3 years, which amortized the fee to 4%. Now could you have done 7% below ask without the help of the broker pushing you? I'd argue that much (or perhaps all) of the fee can be recovered through this channel.

OP, do you want to lose out on another apartment? Than take Inondada poor advice and go in an offer 10% below ask. This won't get the counter offer that he suggests. It'll get your application in the shredder.

He's giving you advice that worked two years ago, not now.

Here is another take for you: A listing broker is more likely to screw over an un-represented client. Why? They have little threat of retribution if they don't take your deal. Many times it's not just about the fee split, believe it or not, it can be more personal, they (meaning agent) "like" one client more than another. When I did rentals I was up the listing brokers wha-hoo to get the deal done and made it crystal clear not to jerk me/my client around.

In this market of tenant fee paying, it's no skin off the owners back, they want the most qualified tenant-end of story. NYC owners are no dummies, they will not be misled by a "real estate" broker trying to collect a better split. And the owners I know, people say like "nada" are not going to be fooled by broker bs, they will smell it from a mile away.

I think the scenario you allude to may be more prevalent in low end rentals where someone represents say a small portfolio of buildings with either RS units or just small crappy stuff in off areas that is "cheap". This type of agent is usually more self serving, perhaps not all, but many based on my own experience with them.

Nada seems to have this down to a science and it obviously works well for him and he is correct, every broker will do 12%. I just helped a friend find a rental in BPC (3 bedroom condo rental, exclusive) and even on a co-broke I was able to have the fee reduced to 12% (yes, I waved my portion, it was a friend).

Maybe I'm just playing the devils advocate here, but I thought I would shine a different light on it.

In this rental market the best thing you can do is present yourself in the strongest light possible, especially if you are looking for desirable homes in prime neighborhoods. Attach a brief CV, show that you have savings perhaps even a nice letter from a former LL. This can make the difference when applying for a condo/coop sublet from an owner.

Anyway good luck!

Keith Burkhardt (broker)
The Burkhardt Group

KeithB
less than a minute ago
ignore this person
report abuse Here is another take for you: A listing broker is more likely to screw over an un-represented client. Why? They have little threat of retribution if they don't take your deal. Many times it's not just about the fee split, believe it or not, it can be more personal, they (meaning agent) "like" one client more than another. When I did rentals I was up the listing brokers wha-hoo to get the deal done and made it crystal clear not to jerk me/my client around.

In this market of tenant fee paying, it's no skin off the owners back, they want the most qualified tenant-end of story. NYC owners are no dummies, they will not be misled by a "real estate" broker trying to collect a better split. And the owners I know, people say like "nada" are not going to be fooled by broker bs, they will smell it from a mile away.

I think the scenario you allude to may be more prevalent in low end rentals where someone represents say a small portfolio of buildings with either RS units or just small crappy stuff in off areas that is "cheap". This type of agent is usually more self serving, perhaps not all, but many based on my own experience with them.

Nada seems to have this down to a science and it obviously works well for him and he is correct, every broker will do 12%. I just helped a friend find a rental in BPC (3 bedroom condo rental, exclusive) and even on a co-broke I was able to have the fee reduced to 12% (yes, I waved my portion, it was a friend).

Maybe I'm just playing the devils advocate here, but I thought I would shine a different light on it.

In this rental market the best thing you can do is present yourself in the strongest light possible, especially if you are looking for desirable homes in prime neighborhoods. Attach a brief CV, show that you have savings perhaps even a nice letter from a former LL. This can make the difference when applying for a condo/coop sublet from an owner.

Anyway good luck!

Keith Burkhardt (broker)
The Burkhardt Group

I would say saying "Every" broker will do 12% is very broad, and so in fact wrong. Some will, some won't. It's a 20% reduction in fee, which is substantial. Especially when there are multiple applicants for an apartment.

Combining a lower offer and offering a reduced fee is a poor strategy right now.

>self-serving behavior. Welcome to the human race.

Really? Because members of other species don't act in their own selfish best interests? Let's ask w67thstreet for some input here.

>Suppose you stay for 3 years, which amortized the fee to 4%.

What an idiotic fallacy. Amortization? The cash is paid today. How does "amortization" help you other than to delude yourself. Kids out of college who have been amortizing their first month of free rent end up with a nasty surprise come rewewal time.

haha. thanks all for the insight. i think one may be able to low-ball apt's in the less desirable hood's in manhattan but the two i lost were west village - one priced in the low 6's/month, the other in the high 5's and both receiving multiple apps at or above the ask.

my suspicion arose after losing the 2nd after authorizing my broker to outbid the other apps. he said it was b/c of income. i didn't show much in 09 and filed for an ext for 2010 but clearly showed significant assets and 0 debt and spotless credit. not to mention, i was willing to write a check for the entire yr's rent just to get the deal done.

so, turning down a deal such as that really doesn't make much sense to me unless one broker prefers to give the apt to someone else.

can't really see an owner turning that deal down but, then again, i don't know sh!+ about real estate.

bjones2731
6 minutes ago
ignore this person
report abuse haha. thanks all for the insight. i think one may be able to low-ball apt's in the less desirable hood's in manhattan but the two i lost were west village - one priced in the low 6's/month, the other in the high 5's and both receiving multiple apps at or above the ask.

my suspicion arose after losing the 2nd after authorizing my broker to outbid the other apps. he said it was b/c of income. i didn't show much in 09 and filed for an ext for 2010 but clearly showed significant assets and 0 debt and spotless credit. not to mention, i was willing to write a check for the entire yr's rent just to get the deal done.

so, turning down a deal such as that really doesn't make much sense to me unless one broker prefers to give the apt to someone else.

can't really see an owner turning that deal down but, then again, i don't know sh!+ about real estate.

8 comments

You are right, you don't know shit about real estate. West Village almost has it's own rules. The broker very well may have not wanted to co-broke, but regardless of that there could have been other issues. I know alot of owners who could care less about a year's rent in advance. Assets don't mean as much to some landlords as others. Income is what most of them want to see. And you have no idea who your competition was for this apartment either. If you don't want to feel as though you have gotten completely abused then stay above 14th st.

I would file your 2010 taxes, ASAP.

ali r.
DG Neary Realty

good god, man. certainly wasn't abused. just posted the question to get more info. isn't that the name of the game.

by the way, i thought you said you had a small child in a previous post. for someone with a kid, you spend a lot of time on the internet and chat boards.

i wouldn't be surprised if your kid turns out to be a retard! it's probably ugly, too. do him or her a favor and start acting like a parent.

and if a landlord wouldn't prefer 12 months in rent vs hoping someone's able to hold down a job for the next yr, than that person is an idiot

"then", i should say

bjones2731
6 minutes ago
ignore this person
report abuse good god, man. certainly wasn't abused. just posted the question to get more info. isn't that the name of the game.

by the way, i thought you said you had a small child in a previous post. for someone with a kid, you spend a lot of time on the internet and chat boards.

i wouldn't be surprised if your kid turns out to be a retard! it's probably ugly, too. do him or her a favor and start acting like a parent.

i'd peg it at less than 30 minutes a day in total. there are some real time wasters here. i guess you aren't able to do two things at once? you have indeed been abused, welcome to the real estate industry.

"haha. thanks all for the insight. i think one may be able to low-ball apt's in the less desirable hood's in manhattan but the two i lost were west village - one priced in the low 6's/month, the other in the high 5's and both receiving multiple apps at or above the ask."

Getting a deal done under ask is more a function of the asking price and what the market price for a place is, not the neighborhood. It's pretty obvious these places were priced at or below market. When something is priced properly and hits the market, you don't come in below ask: it'll be gone in a few days, lease will be signed within the week. You go below ask on places that are priced too high, usually indicated by weeks or months on the market.

FYI, I respect Keith's perspective completely as well. Sometimes owners will have their broker fish around and play delay tactics while your offer is in their hand. Having a broker on their asses can be like a machine gun on your side. Me, I prefer a bazooka: just have backup apt choices ready to go and politely make everyone aware of the fact up-front in the negotiations.

-----i didn't show much in 09 and filed for an ext for 2010 but clearly showed significant assets and 0 debt and spotless credit. not to mention, i was willing to write a check for the entire yr's rent just to get the deal done.-----

The landlord isn't necessarily worried about the first year, he's concerned about what will happen NEXT year and the year after THAT and so on and so on. Because, being a savvy NYC landlord, he knows that once a tenant is in it will be nearly impossible to get that tenant OUT if tenant decides to stop paying rent.

So you having "significant assets" yet questionable/spotty income will raise a red flag to any landlord with half a brain. That's why you lost the deal.

squid i said something along those lines and the op chose to insult my child and parenting

The broker reality is more complicated than most consumers realize.

One thing consumers should remember is, your deal is the one and only for you, and the most important real estate exchange imaginable. For you, it looms large.

But all the brokers you interact with have a bunch of deals in various stages, and potential deals, and are running their own businesses (we are all independent contractors) in which they need to make good business decisions. We see the same brokers over and over again, we get to know each other in many cases.

Good business development means treating people who bring you clients, and their fees, appropriately, which means sharing commissions with other brokers even when not required to do so by some outside force. And often there is an outside force that requires cooperation with other brokers, in addition to the good business sense such cooperation makes.

I'm finding more and more brokers who have no formal obligation to cooperate with me--that is, they do not belong to REBNY--reaching out to me, inviting me to parties at their listings and such.

So I think it's highly unlikely that you lost out on your rental because you had your own broker. Which is not the same as saying impossible, you don't know what happened for sure, but I'd place a bet on my position.

The more likely scenario is that the other renter was a better prospect, and/or there was something in your app that made you less desirable. Or those other renters offered more than asking rent and you didn't. Or something else.

Brokers sharing commissions is just good business practice, it results in more money in the broker's pocket in the long run. It also, by the way, serves the public the best. Experienced people understand all this.