Interested in some feedback on this situation - We visited a coop rental this weekend in a desirable neighborhood. The unit was being shown by a broker (the broker was from the same firm that manages the building). The broker's stated fee was 10% to be paid by renter. The apartment was just right for us and the price was in our range so we put a deposit down (less than $500) and started to prepare... [more]
Interested in some feedback on this situation -
We visited a coop rental this weekend in a desirable neighborhood. The unit was being shown by a broker (the broker was from the same firm that manages the building). The broker's stated fee was 10% to be paid by renter.
The apartment was just right for us and the price was in our range so we put a deposit down (less than $500) and started to prepare the materials for the owner/board (required owner/board approval). In the elevator the broker noted that maybe the unit was priced a little low.
When we returned home we saw the original listing had been modified and the unit price was increased by $400/month. We were confused so we completed/submitted the application (w/financial info) the next day. The broker stated that the owner now felt the unit was now worth more -- they also said another broker was willing to place their client for marginally more per month.
We're really not interested in some hypothetical bidding war but something seems a little uneven here. Is it typical for a broker to list a unit, take a deposit/application from someone willing to pay the listed price, and then re-list it for more?
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Response by julia
over 17 years ago
Posts: 2841
Member since: Feb 2007
It appears you haven't signed contracts for a lease so legally he probably is okay but in every other way your broker is someone you should not work with again.
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Response by NYRENewbie
over 17 years ago
Posts: 591
Member since: Mar 2008
That is a horrible story. Shame on that broker!
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Response by inonada
over 17 years ago
Posts: 7952
Member since: Oct 2008
I am guessing the apt was just listed, and the owner thinks that because you stepped up so quickly, they under-priced. Understandable, but not an excuse. You can nip the issue in the bud by telling them to have a lease by Wed afternoon, at the original price, or to give your deposit back. Make sure you have a counter-signed lease by Friday. Any excuse, like they can't give you a signed copy until coop approval is BS. Don't give them next weekend to try to get a higher price. I doubt another bid exists, and if there did, it doesn't seem like you'd be interested in going over it, right?
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Response by uptowngal
over 17 years ago
Posts: 631
Member since: Sep 2006
This is terrible! Renting a coop out is not always easy given the process, so these people should be lucky if they find good tenants who will pass the board.
And I still don't get this 'mgt fee' business for apartments - what a scam.
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Response by front_porch
over 17 years ago
Posts: 5320
Member since: Mar 2008
Please forgive, in advance, the world's longest post.
The question in my head is what that $500 was. If it was an APPLICATION fee, then your offer was not accepted, and there's room, ethically, for the owner -- with the broker as his agent -- to use other parties to force up your bid. If it was a DEPOSIT, then your offer was accepted, then it's really not cool to jack up the price post-handshake.
Of course the latter happens, because owners are crazy and greedy.
***
However, that case opens up two possibilities, and you have a valid right to complain in either of them.
Scenario #1) the broker, wanting to seal the deal, jumped on your interest and "accepted" prior to speaking with the owner. The broker then turned around and said to the owner, "you could push them up, you know." The owner thinks, "well, I haven't accepted anything," and says "go push them up."
In this scenario, the broker has screwed up by inappropriately signalling you that you had a green light, when in fact you didn't, and it's totally appropriate to complain about that. The first avenue is the broker's boss; the second would be a real estate board, such as REBNY (the Real Estate Board of New York) or NYSAR (the New York State Association of Realtors). {Since the broker works for a management co., they may or may not be a REBNY member.)
Scenario #2) the broker has been told to accept the first good offer at asking, and does so, and takes it back to the owner, who then "changes their mind." In this case, the owner is not treating you as a consumer properly, and you'd have a case for a consumer complaint that advertised goods were not being delivered -- my guess is that the New York State Department of State would handle that.
Now, because you don't have a signed contract, you don't have a lawsuit -- oral agreements are worth the paper they're written on -- but it's still worth going through the motions of a handslap here, because it sounds likely that someone has behaved badly, and whichever party it is, they should at least get a token response that it's not okay to do that.
Of course if you complain, you'll reduce your chances of getting the apartment, so you have to weigh what your best interests are. If you want the apartment, I like inonada's suggestion to put time pressure on the landlord, that's a good play.
ali r.
{downtown broker}
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Response by zkorb
over 17 years ago
Posts: 2
Member since: Jan 2007
Thank you everyone for your suggestions and feedback. Clearly the unit has been relisted multiple times on the usual sites at the higher price. To me, these are red flags about the owner/mgmt agent/broker. If they pull this before you move in...
At this point, I've passed the annoyed stage and moved onto curiosity about what they actually get for the unit. It's a big city - we have plenty of other places we can look at. I'm going to put a deadline for a decision - but I'm going to make it next Friday (want to see what happens after the weekend and how they handle it).
It appears you haven't signed contracts for a lease so legally he probably is okay but in every other way your broker is someone you should not work with again.
That is a horrible story. Shame on that broker!
I am guessing the apt was just listed, and the owner thinks that because you stepped up so quickly, they under-priced. Understandable, but not an excuse. You can nip the issue in the bud by telling them to have a lease by Wed afternoon, at the original price, or to give your deposit back. Make sure you have a counter-signed lease by Friday. Any excuse, like they can't give you a signed copy until coop approval is BS. Don't give them next weekend to try to get a higher price. I doubt another bid exists, and if there did, it doesn't seem like you'd be interested in going over it, right?
This is terrible! Renting a coop out is not always easy given the process, so these people should be lucky if they find good tenants who will pass the board.
And I still don't get this 'mgt fee' business for apartments - what a scam.
Please forgive, in advance, the world's longest post.
The question in my head is what that $500 was. If it was an APPLICATION fee, then your offer was not accepted, and there's room, ethically, for the owner -- with the broker as his agent -- to use other parties to force up your bid. If it was a DEPOSIT, then your offer was accepted, then it's really not cool to jack up the price post-handshake.
Of course the latter happens, because owners are crazy and greedy.
***
However, that case opens up two possibilities, and you have a valid right to complain in either of them.
Scenario #1) the broker, wanting to seal the deal, jumped on your interest and "accepted" prior to speaking with the owner. The broker then turned around and said to the owner, "you could push them up, you know." The owner thinks, "well, I haven't accepted anything," and says "go push them up."
In this scenario, the broker has screwed up by inappropriately signalling you that you had a green light, when in fact you didn't, and it's totally appropriate to complain about that. The first avenue is the broker's boss; the second would be a real estate board, such as REBNY (the Real Estate Board of New York) or NYSAR (the New York State Association of Realtors). {Since the broker works for a management co., they may or may not be a REBNY member.)
Scenario #2) the broker has been told to accept the first good offer at asking, and does so, and takes it back to the owner, who then "changes their mind." In this case, the owner is not treating you as a consumer properly, and you'd have a case for a consumer complaint that advertised goods were not being delivered -- my guess is that the New York State Department of State would handle that.
Now, because you don't have a signed contract, you don't have a lawsuit -- oral agreements are worth the paper they're written on -- but it's still worth going through the motions of a handslap here, because it sounds likely that someone has behaved badly, and whichever party it is, they should at least get a token response that it's not okay to do that.
Of course if you complain, you'll reduce your chances of getting the apartment, so you have to weigh what your best interests are. If you want the apartment, I like inonada's suggestion to put time pressure on the landlord, that's a good play.
ali r.
{downtown broker}
Thank you everyone for your suggestions and feedback. Clearly the unit has been relisted multiple times on the usual sites at the higher price. To me, these are red flags about the owner/mgmt agent/broker. If they pull this before you move in...
At this point, I've passed the annoyed stage and moved onto curiosity about what they actually get for the unit. It's a big city - we have plenty of other places we can look at. I'm going to put a deadline for a decision - but I'm going to make it next Friday (want to see what happens after the weekend and how they handle it).