Broker fee negotiation from 15%

Sorry. I meant to post this in the Rentals section.

Tell them you will not pay a penny more than one months rent (cheaper than 15% of annual rent) - If they agree ask them to show you apts if not then move on. I have never used a broker who asked me more than one months rent. I can personally recommend a GREAT broker, if you want I can forward you her contact. What area are you looking? Size?

Trouble is it is a particular apartment I want, and he has the listing. So if he refuses to negotiate, I will pay the 15%. But I will try to pretend that I'm not that into it.

If you are not represented by your own broker and you are simply approaching the listing broker you can probably negotiate a cut to 12%.

The problem is that his/her firm has probably already staked out 7 1/2, so you are asking listing broker to cut his personal commission nearly in half. If the apartment was just listed, it's a smart move, if he's been sitting on it for awhile, he might not want to.

ali r.
{downtown broker}

If you are a qualified renter and not some NYU boy, and the apartment isn't some crappy tenement, it isn't that hard.
Lets say the monthly rent is 3100, that is $37200 per year. At some point mid-way through figuring it all out, tell the broker that you didn't want to pay total rental costs of more than $40,000 per year. That leaves $2800 and so you'll settle for 1 month at $3200.
Be a bit suave and not obvious.

Also, brokers whose business is 100% rental are less likely to negotiate. But they aren't the types you should want to deal with ... the sales guys have reputations to uphold.

Thanks all, I'll let you know how it goes.

I know this is an old thread, but I had to chime in (and signed up to Streeteasy for this purpose!). I am looking now and I've had a range of answers. I am looking at broker listings directly but showing up without a broker. I have had some agents randomly offer to discount their commission since I don't have a broker. But of course, for the unit I really want, the broker refuses to discount it at all! So it sounds like there is a range of choices.

offer less for the apartment

Real estate agents are businesspeople like anybody else -- whether we are inclined to discount depends on how much hassle that listing has been, whether we think you're going to be a future customer or source of referral business, how much money we have made that month, whether our manager has yelled at us recently or not, what our Visa bills look like, and whether the subway ran well that morning.

As a negotiator, you can't control most of these factors; you can only control your behavior.

You may or may not have signalled to the listing broker that this apartment is "the one" -- if so, he or she has you in his power.

The best way to break that grip is to find a back-up place you like.

ali r.
{downtown broker}

None of the rental brokers I met during the spring expressed any flexibility regardless of how long the unit had sat empty. Some dropped the price within days after refusing to negotiate a lower price with me. It was insane. I thought looking to buy was unpleasant dealing with most brokers. Well, looking to rent in the interim was infinitely more unpleasant. In the end, I spoke to doormen in buildings I liked to find out if any units were avaialable and then I contacted the management companies directly. I secured a top-notch unit in a white-glove building on the lower 5th Ave gold coast for no fee at $300 less than the original asking price. My advice: do this the old fashioned way by hitting the pavement and going directly to management companies; many of them do not advertise and actually do business this way as a matter of course.

"The best way to break that grip is to find a back-up place you like"
Very good advice. On my current rental there was another property we liked better but they didn't want to negotiate the fee which was 15% I believe, so we walked. I think the broker was honestly a little surprised, but hey they lost their opportunity. Rental brokers are pretty much all worthless IMO anyway.

Insiders: Broker fee negotiation from 15% to 75%

There is a chapter in my book called "why cheap rentals suck" for a reason.

http://tinyurl.com/2ag28z

The system certainly doesn't appear to be working for customers -- a bird in the hand such as kylewest should have been offered a discount -- and believe it or not, it doesn't really work for brokers.

I am a doing a one-bedroom rental now for a client where the financing is complicated, and by the time I'm done, I'm going to make $20 an hour. Any real estate person with talent and brains looks at those kind of numbers and concentrates on high-end rentals, or sales.

ali r.
{downtown broker}

Once again kylewst is right on the money with great advice. A true-blue new yorker wouldn't do it any other way (unless you're looking at higher end...above 10k/month).

I wish I could have done as kylewst suggested and hit the pavement, but this was for a listing in a condo building - rental from the condo owner through this broker. Surprisingly, I did have another place that I liked alot better and let this be known to the broker, but I guess I wasn't convincing enough! I like the factors you set forth front_porch - after going a bit further in the process, I am beginning to think that the condo owners (the broker's clients) are very difficult to deal with and that the broker wanted to be compensated for that. Just wish it didn't have to come from me.

The broker ultimately ended up dropping the fee 3%, but only after so much haggling that I wasn't sure I wanted the place anymore!

Thanks for all of the advice. I think next time it might make sense to consider offering less on the rent side, as csn suggested. Is that really very common for rentals? I thought about this, but had heard that the price on this unit had dropped many times and found it pretty reasonable anyway, so I felt strange offering less than the advertised rent.

Remember, the broker works for the owner of the apartment. Don't make it a negotiation between you and the broker, make it a negotiation between you and the owner. The owner can pay all or part of the brokerage fee if you negotiate right.

Just rented a condo, paid 10% commission and 15% below another condo listed for rent 10 floors lower. Gave the REA a verbal offer and mentioned that the offer price was the same as I could get in another building I was interested in. After first refusing, came back a few days later and accepted the offer.

Another piece of advice, don't forget to take out the clause for additional added rent or you could face automatic increases in rent if taxes or maintenance go up for the owner which looks like a sure thing this winter.