(Originally posted accidentally to Sales) As a broker (securities) and a reasonably intelligent (grad school counts?) New Yorker (10 yrs) having rented now on four different occasions in NYC, I find myself really quite embarrassed (for myself and for the 'system') in not knowing the answer here: We've conducted our search entirely ourselves (early in process, have looked exclusively at listings... [more]
(Originally posted accidentally to Sales)
As a broker (securities) and a reasonably intelligent (grad school counts?) New Yorker (10 yrs) having rented now on four different occasions in NYC, I find myself really quite embarrassed (for myself and for the 'system') in not knowing the answer here:
We've conducted our search entirely ourselves (early in process, have looked exclusively at listings posted on the major aggregator sites, e.g. StreetEasy).
We found a unit on SE we thought very promising, contacted the listing broker (who works for one of the major listing firms, think DouglasElliman, Corcoran, etc and has the listing posted on his agent profile page at the relevant broker's website) for a showing.
Went to the showing, loved the unit.
Submitted a proposal (email) through the agent, heard back today that the owner 'accepted' our proposal 'in its entirety' and so now we need to fill out the building's application package (it's a condo building). So far so good.
In the 'congrats the owner accepted your offer' email the broker includes an agency disclosure form (disclosing that he represents the owner) and mentions that NY State "wants" him to tell us that he represents the landlord in the transaction. Also fine.
However the form is pre-filled out that he is representing us (checkmark) and acting as a "Dual agent" (checkmark). For those of you familiar with the form, there are also checkbox option which would indicate he is representing the landlord (not checked), and there is a checkbox option that it indicates 'Advance informed consent dual agency' (checked).
We never discussed him representing us or dual-representing both sides when we met him for the viewing or during the viewing, and we did not include any reference to broker fees in our email offer. If it matters, he was the one who originally requested we outline the general terms of our offer in an email.
Any reason we shouldn't correct this form before signing? Do we owe a broker fee here? Should we have been more explicit with him that we are representing ourselves? Should we have specifically said, 'we are submitting an offer but your fee is between you and the owner'?
Thanks,
Confused & Embarrassed
[less]
Response by pier45
over 12 years ago
Posts: 379
Member since: May 2009
Unfortunately this is so specific that no one will touch the question as to not be giving legal advice.
But yes by all means clarify who is paying the fee before you pay any application fee, fill out forms, etc.
Ignored comment.
Unhide
Response by bramstar
over 12 years ago
Posts: 1909
Member since: May 2008
I can't speak to your specific situation but in general it is standard that the renter pays the listing agent's commission fee. Regardless of whether the renter found the listing himself.
Ignored comment.
Unhide
Response by jim_hones10
over 12 years ago
Posts: 3413
Member since: Jan 2010
you will have to pay the commission if they have the exclusive, so none of it matters really. it would be more appropriate for them to present the DOS form prior to when they did, and they should have just said they are representing the owner, not dual agency. but since this seems like a pretty straight forward deal, why muddy the water over semantics?
Ignored comment.
Unhide
Response by ioserin
over 12 years ago
Posts: 21
Member since: Jan 2009
CandE,
Agency Disclosure has nothing to do with who pays the brokerage fee. Unless the unit was advertised as no fee, chances are the renter pays the fee, but of course this is all negotiable.
Ignored comment.
Unhide
Response by CandE
over 12 years ago
Posts: 4
Member since: May 2013
For the benefit of future generations...
I called the broker, explained that I was not looking to back out or torpedo the deal, but that I felt my offer had been misunderstood.
He felt it obvious that, absent detail, the offer implied renter would pay full fee. I explained that was not what I had intended in the offer, nor assumed since he never indicated he would be acting as our agent, and asked his help to figure out if owner/landlord would re-evaluate the offer (no fee) or more likely consider splitting the fee.
He agreed he could at least ask on splitting the fee.
I guess sometimes things work out, as owner agreed to split the fee...
Ignored comment.
Unhide
Response by Sonya_D
over 12 years ago
Posts: 547
Member since: Jan 2013
Nice work, CandE!
Ignored comment.
Unhide
Response by MAV
over 12 years ago
Posts: 502
Member since: Sep 2007
StreetEasy has green text for no fee, black text for fee. If its "Fee" then you pay the fee. You just found a loophole of how to pay a 1/2 commission...
Ignored comment.
Unhide
Response by renterjoey
over 12 years ago
Posts: 351
Member since: Oct 2011
MAV brings up a very good point. Take a looking at the listing you found on SE. Does it state FEE near the price? If you saw that were you under the impression that it meant owner pays fee?
Ignored comment.
Unhide
Response by renterjoey
over 12 years ago
Posts: 351
Member since: Oct 2011
sorry it usually states "no fee" in green when a broker is not involved.
Ignored comment.
Unhide
Response by greensdale
over 12 years ago
Posts: 3804
Member since: Sep 2012
>He felt it obvious that, absent detail, the offer implied renter would pay full fee.
What should be obvious to the broker is he's the one on the industry, not you, and you are not to be expected to know and therefore he should be expected to tell you upfront.
Ignored comment.
Unhide
Response by crescent22
over 12 years ago
Posts: 953
Member since: Apr 2008
Having rented in NYC multiple times before, how do you not know that for a rental listing that doesn't say no-fee if you contact the listing agent, it's you who owe the fee?
Ignored comment.
Unhide
Response by greensdale
over 12 years ago
Posts: 3804
Member since: Sep 2012
>Having rented in NYC multiple times before, how do you not know that for a rental listing that doesn't say no-fee if you contact the listing agent, it's you who owe the fee?
That hasn't always been the case, it isn't the case in many other markets, why should the obligation be on the renter to guess, why shouldn't the obligation be on the professional who is in the market to make a disclosure, and we haven't seen the text of the offer that was accepted but it sounds as if the OP intended to lay out his full financial obligation in exchange for tenancy which was subsequently accepted. What other rational market is set up in a manner like this?
Ignored comment.
Unhide
Response by pier45
over 12 years ago
Posts: 379
Member since: May 2009
"He felt it obvious that, absent detail, the offer implied renter would pay full fee."
Great position for the last unregulated cartel in NYC
That said, good for you (and the broker) that everyone seemed to get what they wanted.
Ignored comment.
Unhide
Response by greensdale
over 12 years ago
Posts: 3804
Member since: Sep 2012
Bottom line, the landlord accepted your offer without counter ... so you have room. You obviously want an above board relationship with the landlord ... who is the easy one for both of you to throw overboard?
Ignored comment.
Unhide
Response by NYCREAgent
over 12 years ago
Posts: 156
Member since: Sep 2010
Actually, the reason he checked Dual Agency is to cut down on paperwork should you decide to utilize his services for your search.
Ignored comment.
Unhide
Response by CandE
over 12 years ago
Posts: 4
Member since: May 2013
Just my 2 cents - since folks seem to care about the topic.
1) the listing did not specify no-fee. To me, all that means is that the landlord and agent are expecting the tenant to pay the fee. It does not mean the tenant is required to submit an offer where the tenant pays the fee, and it does not mean that I have agreed to pay a commission the landlord has agreed the broker could charge simply because I showed up to view the apartment - unless I discuss the fee with someone and submit an offer that includes the fee. Market practice is not, in my opinion, sufficient to write in terms that aren't explicitly provided in a written offer. Just because the owner offered the apartment as a fee apartment (tenant to pay the broker fee) doesn't mean I can't submit an offer where the owner pays his own fees...
2) there was no 'reason' he checked Dual Agency. my read of the situation (having interacted with the broker directly) is that he views the forms as, well, a rather tedious formality (so do I). He said in the email that the he's required to give me the forms to disclose that he's representing the landlord, and then he didn't check landlord representation, but instead checked both tenant representation and dual representation. Sorry, but the explanation on the form makes it pretty clear that all three options are mutually exclusive. Either you represent the landlord, or you represent the tenant, or you represent both. There's even a discussion about what how the agent's responsibilities to the tenant are different depending on landlord, tenant, or dual representation. As far as I'm concerned, representation matters (although forms do not), and market practice doesn't override or resolve the legal or ethical problems that come up when an adverse party is expected to pay for the counterparty's agent (also in my opinion dual agency is fundamentally a fictional concept).
3) Miscommunication notwithstanding, I think the broker handled the situation quite professionally (although I do take credit for helping frame the discussion and guiding him to the right outcome). There was room in my original offer to negotiate, and so paying up for 50% of the fee is a perfectly acceptable outcome all things considered.
Ignored comment.
Unhide
Response by greensdale
over 12 years ago
Posts: 3804
Member since: Sep 2012
>Market practice is not, in my opinion, sufficient to write in terms that aren't explicitly provided in a written offer. Just because the owner offered the apartment as a fee apartment (tenant to pay the broker fee) doesn't mean I can't submit an offer where the owner pays his own fees...
Exactly
Ignored comment.
Unhide
Response by greensdale
over 12 years ago
Posts: 3804
Member since: Sep 2012
>and so paying up for 50% of the fee is a perfectly acceptable outcome all things considered.
Don't let the broker off the hook from making a contribution to this situation in the form of a fee reduction. Neither you nor the owner need to contemplate splitting 100% of the fee by 50% each.
Ignored comment.
Unhide
Response by drdrd
over 12 years ago
Posts: 1905
Member since: Apr 2007
Congratulations; I'm glad this worked out for you!
Unfortunately this is so specific that no one will touch the question as to not be giving legal advice.
But yes by all means clarify who is paying the fee before you pay any application fee, fill out forms, etc.
I can't speak to your specific situation but in general it is standard that the renter pays the listing agent's commission fee. Regardless of whether the renter found the listing himself.
you will have to pay the commission if they have the exclusive, so none of it matters really. it would be more appropriate for them to present the DOS form prior to when they did, and they should have just said they are representing the owner, not dual agency. but since this seems like a pretty straight forward deal, why muddy the water over semantics?
CandE,
Agency Disclosure has nothing to do with who pays the brokerage fee. Unless the unit was advertised as no fee, chances are the renter pays the fee, but of course this is all negotiable.
For the benefit of future generations...
I called the broker, explained that I was not looking to back out or torpedo the deal, but that I felt my offer had been misunderstood.
He felt it obvious that, absent detail, the offer implied renter would pay full fee. I explained that was not what I had intended in the offer, nor assumed since he never indicated he would be acting as our agent, and asked his help to figure out if owner/landlord would re-evaluate the offer (no fee) or more likely consider splitting the fee.
He agreed he could at least ask on splitting the fee.
I guess sometimes things work out, as owner agreed to split the fee...
Nice work, CandE!
StreetEasy has green text for no fee, black text for fee. If its "Fee" then you pay the fee. You just found a loophole of how to pay a 1/2 commission...
MAV brings up a very good point. Take a looking at the listing you found on SE. Does it state FEE near the price? If you saw that were you under the impression that it meant owner pays fee?
sorry it usually states "no fee" in green when a broker is not involved.
>He felt it obvious that, absent detail, the offer implied renter would pay full fee.
What should be obvious to the broker is he's the one on the industry, not you, and you are not to be expected to know and therefore he should be expected to tell you upfront.
Having rented in NYC multiple times before, how do you not know that for a rental listing that doesn't say no-fee if you contact the listing agent, it's you who owe the fee?
>Having rented in NYC multiple times before, how do you not know that for a rental listing that doesn't say no-fee if you contact the listing agent, it's you who owe the fee?
That hasn't always been the case, it isn't the case in many other markets, why should the obligation be on the renter to guess, why shouldn't the obligation be on the professional who is in the market to make a disclosure, and we haven't seen the text of the offer that was accepted but it sounds as if the OP intended to lay out his full financial obligation in exchange for tenancy which was subsequently accepted. What other rational market is set up in a manner like this?
"He felt it obvious that, absent detail, the offer implied renter would pay full fee."
Great position for the last unregulated cartel in NYC
That said, good for you (and the broker) that everyone seemed to get what they wanted.
Bottom line, the landlord accepted your offer without counter ... so you have room. You obviously want an above board relationship with the landlord ... who is the easy one for both of you to throw overboard?
Actually, the reason he checked Dual Agency is to cut down on paperwork should you decide to utilize his services for your search.
Just my 2 cents - since folks seem to care about the topic.
1) the listing did not specify no-fee. To me, all that means is that the landlord and agent are expecting the tenant to pay the fee. It does not mean the tenant is required to submit an offer where the tenant pays the fee, and it does not mean that I have agreed to pay a commission the landlord has agreed the broker could charge simply because I showed up to view the apartment - unless I discuss the fee with someone and submit an offer that includes the fee. Market practice is not, in my opinion, sufficient to write in terms that aren't explicitly provided in a written offer. Just because the owner offered the apartment as a fee apartment (tenant to pay the broker fee) doesn't mean I can't submit an offer where the owner pays his own fees...
2) there was no 'reason' he checked Dual Agency. my read of the situation (having interacted with the broker directly) is that he views the forms as, well, a rather tedious formality (so do I). He said in the email that the he's required to give me the forms to disclose that he's representing the landlord, and then he didn't check landlord representation, but instead checked both tenant representation and dual representation. Sorry, but the explanation on the form makes it pretty clear that all three options are mutually exclusive. Either you represent the landlord, or you represent the tenant, or you represent both. There's even a discussion about what how the agent's responsibilities to the tenant are different depending on landlord, tenant, or dual representation. As far as I'm concerned, representation matters (although forms do not), and market practice doesn't override or resolve the legal or ethical problems that come up when an adverse party is expected to pay for the counterparty's agent (also in my opinion dual agency is fundamentally a fictional concept).
3) Miscommunication notwithstanding, I think the broker handled the situation quite professionally (although I do take credit for helping frame the discussion and guiding him to the right outcome). There was room in my original offer to negotiate, and so paying up for 50% of the fee is a perfectly acceptable outcome all things considered.
>Market practice is not, in my opinion, sufficient to write in terms that aren't explicitly provided in a written offer. Just because the owner offered the apartment as a fee apartment (tenant to pay the broker fee) doesn't mean I can't submit an offer where the owner pays his own fees...
Exactly
>and so paying up for 50% of the fee is a perfectly acceptable outcome all things considered.
Don't let the broker off the hook from making a contribution to this situation in the form of a fee reduction. Neither you nor the owner need to contemplate splitting 100% of the fee by 50% each.
Congratulations; I'm glad this worked out for you!