ClintonB 8 minutes ago ignore this person report abuse I offered 15% less on a condo unit rental in a new development, with the owner paying the broker fee and was rejected (so I walked). Broker said that the similar units above had rented for significantly more than the current ask ... however the current ask was set in September after a modest chop. Unfortunately for the owner, every month... [more]
ClintonB
8 minutes ago
ignore this person
report abuse I offered 15% less on a condo unit rental in a new development, with the owner paying the broker fee and was rejected (so I walked).
Broker said that the similar units above had rented for significantly more than the current ask ... however the current ask was set in September after a modest chop. Unfortunately for the owner, every month unrented is an 8% discount (1/12th) but the broker gets the fee just only with a delay. Actually though I did find that two similar units above (this is a NEW condo) rented for significantly more than even the early ask, and LATER than this unit was listed, which pretty much shows that this broker didn't do her job if others did better - started later, finished sooner (or finished at all) and got more than she ever asked.
Interestingly, the reply came back that the owner wouldn't pay MY broker fee. So it shows, she has no incentive with the owner to price correctly or to be competent because she gets him to think that her service is for my benefit because it is paid by me.
mh23
8 minutes ago
ignore this person
report abuse Also, all buyers need to completely abandon the notion of "insulting the seller". That is nonsense. You are engaged in an arms length transaction, presumably with brokers doing the talking. This is business, this in not about making friends. Any seller that comes to market right now in all likelihood needs to sell because they, like you, realize that conditions are very poor. So, you need to get them excited with the notion that they have a cash customer ready to do a fast deal, but for that they need to really lower the price. If they are desperate, as more and more of them are, they will take the money and run, and their broker, who only gets paid if the transaction goes through, will tell them to sell because you are a serious buyer. Insulting aint got nothing to do with it.
ClintonB
less than a minute ago
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report abuse How long do typical exclusive arrangements by a condo owner to rent out a unit last?
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Response by ClintonB
about 17 years ago
Posts: 128
Member since: Sep 2008
sorry I meant to edit that. Anyway, see above!
And my last question on how long exclusive arrangements by a condo owner to rent ...
I looked on ACRIS for who owned the unit and could easily get a note to him, he's being underserved by his broker and frankly should fire her and list the unit himself. On a $4K apartment (for example), asking the renter to pay another $4-$6K upfront to a broker that HE hired that is not serving him well anyway seems like a real dampener to a transaction ... certainly it had been with me.
And don't worry, I'm not obsessed with this apartment, I'm looking at others, just putting out an topic for discussion ... hopefully a worthy real-life one to some.
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Response by tina24hour
about 17 years ago
Posts: 720
Member since: Jun 2008
ClintonB:
Did you sign a broker show agreement? If so, then you agreed to rent through the broker if you choose to move forward with the transaction. Doesn't matter if the owner drops the broker in the future. Of course, you can choose to ignore that agreement, but the broker could legally hold you responsible for the fee.
My guess is that you tried to shave too much off the deal - that you could get either the rent reduction OR the fee reduction, but not both. Is there a net effective rent that works for you? If so, offer that in two forms: either a) rent is $x, no fee, or rent is $x(-15%), you pay the fee. See if that works.
Also, it helps not to be a dick about it.
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Response by newbuyer99
about 17 years ago
Posts: 1231
Member since: Jul 2008
I agree with offering in two forms. You may also want to befriend the broker and pick their brain - we did that and they were all willing to help guide us to a structure/price that gets the deal done.
I am not sure I agree that that broker's incentive is to hold out - it's more time wasted for them without a fee. Most of the ones we met with were very interested in getting a deal done.
We looked at a lot of condo rentals in the last two weeks (although we ended up renting at a rental building), and I got the distinct sense that most condo owners trying to rent are in varying degrees of desperation. I keep getting calls and emails from the brokers that showed us the units, with a variant of "the owner really, really wants to rent the place, everything is negotiable".
I never actually made any offers, because our first choice was a rental building. But my sense based on chops and body language was that 20% below ask would've been considered in many cases.
Look at comps as much as you can, especially similar comps in rental buildings. I would say put your offer in an email, be very diplomatic, explicit on the key points, and specifically request that the broker present the offer to the owner. Good luck!
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Response by ClintonB
about 17 years ago
Posts: 128
Member since: Sep 2008
Let me respond to Tina 24 Hour. First I was not a dick. I always come off as very polite and sincere when transacting business, whether that is with someone one time or someone many times and regardless of if I think the person is an idiot or a scumbag. I may not be polite on a message board, and won't here, especially to someone who right off the bat assumes I was a dick but then again her name is Tina 24 Hour ...
So anyway.
No, I didn't sign a broker show agreement. I didn't hire a broker. I responded to a listing on one of the top brokerage firms web sites. The broker represents the owner. Period.
Second, 15% is bullshit unless I specifically had hired a broker to represent me and then there were to be some split of commission. In the case of a broker representing an owner and no one on my side, the fee should be 1 month or 7.5%, NEVER MORE. EVER. And then of course in this market, assuming that people should shell out $4-$6K as a fee on a 1BR apartment is insane by an arrogant owner.
Third, fuck net effective rent. I made an explicit proposal of what I was willing to pay to the owner on a monthly basis, and the owner can then pay off the broker that he hired for his own convenience. My offer was complete in all respects and left no room for ambiguity.
I've got perfect credit, more than sufficient income to cover the rental by any standard, and otherwise perfect credentials.
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Response by ClintonB
about 17 years ago
Posts: 128
Member since: Sep 2008
By the way, this brings up something from Tina. NEVER sign a form that a broker puts in front of you unless that broker is specifically going to be hired to represent YOUR and ONLY YOUR interests in a transaction. e.g. if you are a seller and hiring a broker to represent you.
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Response by newbuyer99
about 17 years ago
Posts: 1231
Member since: Jul 2008
ClintonB, I agree on no more than a month's rent for the broker. Most we spoke to (top firms), offered that before we even brought it up. Also agree on not hiring a broker to represent you when looking for a rental - huge waste of time and money.
But I disagree on your point about net effective rate. You should care about cash costs only, and if other care about some psychological or optical factors, you should use that to your advantage. For instance, we saw an apartment priced well below comps (and negotiable), but the broker told us that owner refused to pay her fee, as a matter of principle. She was fine with a month, of course. So what do we care about the mechanics - just amortize that broker fee over the first year, and factor that in our comparisons.
As another example, the apartment we ended up getting was overpriced, but offering a free month. The management company refused to get rid of the free rent and do a "real" price, which was annoying, but we negotiated them down a bit on the price, kept the free month, and got them to throw in some more concessions that had value to us, but didn't really harm them. Had we insisted on a "straight" rent, we probably wouldn't have gotten to a deal. Not disastrous, obviously (we had other options), but I like this outcome at this effective price better.
If your goal is to get a great deal, it's to your benefit to be creative and appear flexible, even if in reality you're lowballing bigtime.
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Response by samename
about 17 years ago
Posts: 15
Member since: Dec 2008
the rental buildings like higher monthlies even if they have to give free months, because after your first year is up, there's no more free monthlies and you are paying the full rate ... plus the increase is based on the full rate.
Also, when a buyer looks at a building, he's looking at the monthly rent roll and the discounting a typical amount for improvements and incentives to re-rent units at a typical turnover percentage.
So you didn't get a great deal by paying an overpriced apartment, only you think you did.
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Response by tina24hour
about 17 years ago
Posts: 720
Member since: Jun 2008
ClintonB - I wasn't accusing you of being a dick, I was just saying it helps not to be. We're in agreement there.
Just to clarify the hugely dysfunctional commission structure for NYC apartment rentals: except in the case of specific "owner pay" deals, the renter pays ALL of the commission! There is not even the perceived buy side/sell side split that we have in our sale transactions. Evil, right? This hasn't always been the case, however, and I think the current market will dismantle the old structure and we'll see some parity again.
sorry I meant to edit that. Anyway, see above!
And my last question on how long exclusive arrangements by a condo owner to rent ...
I looked on ACRIS for who owned the unit and could easily get a note to him, he's being underserved by his broker and frankly should fire her and list the unit himself. On a $4K apartment (for example), asking the renter to pay another $4-$6K upfront to a broker that HE hired that is not serving him well anyway seems like a real dampener to a transaction ... certainly it had been with me.
And don't worry, I'm not obsessed with this apartment, I'm looking at others, just putting out an topic for discussion ... hopefully a worthy real-life one to some.
ClintonB:
Did you sign a broker show agreement? If so, then you agreed to rent through the broker if you choose to move forward with the transaction. Doesn't matter if the owner drops the broker in the future. Of course, you can choose to ignore that agreement, but the broker could legally hold you responsible for the fee.
My guess is that you tried to shave too much off the deal - that you could get either the rent reduction OR the fee reduction, but not both. Is there a net effective rent that works for you? If so, offer that in two forms: either a) rent is $x, no fee, or rent is $x(-15%), you pay the fee. See if that works.
Also, it helps not to be a dick about it.
I agree with offering in two forms. You may also want to befriend the broker and pick their brain - we did that and they were all willing to help guide us to a structure/price that gets the deal done.
I am not sure I agree that that broker's incentive is to hold out - it's more time wasted for them without a fee. Most of the ones we met with were very interested in getting a deal done.
We looked at a lot of condo rentals in the last two weeks (although we ended up renting at a rental building), and I got the distinct sense that most condo owners trying to rent are in varying degrees of desperation. I keep getting calls and emails from the brokers that showed us the units, with a variant of "the owner really, really wants to rent the place, everything is negotiable".
I never actually made any offers, because our first choice was a rental building. But my sense based on chops and body language was that 20% below ask would've been considered in many cases.
Look at comps as much as you can, especially similar comps in rental buildings. I would say put your offer in an email, be very diplomatic, explicit on the key points, and specifically request that the broker present the offer to the owner. Good luck!
Let me respond to Tina 24 Hour. First I was not a dick. I always come off as very polite and sincere when transacting business, whether that is with someone one time or someone many times and regardless of if I think the person is an idiot or a scumbag. I may not be polite on a message board, and won't here, especially to someone who right off the bat assumes I was a dick but then again her name is Tina 24 Hour ...
So anyway.
No, I didn't sign a broker show agreement. I didn't hire a broker. I responded to a listing on one of the top brokerage firms web sites. The broker represents the owner. Period.
Second, 15% is bullshit unless I specifically had hired a broker to represent me and then there were to be some split of commission. In the case of a broker representing an owner and no one on my side, the fee should be 1 month or 7.5%, NEVER MORE. EVER. And then of course in this market, assuming that people should shell out $4-$6K as a fee on a 1BR apartment is insane by an arrogant owner.
Third, fuck net effective rent. I made an explicit proposal of what I was willing to pay to the owner on a monthly basis, and the owner can then pay off the broker that he hired for his own convenience. My offer was complete in all respects and left no room for ambiguity.
I've got perfect credit, more than sufficient income to cover the rental by any standard, and otherwise perfect credentials.
By the way, this brings up something from Tina. NEVER sign a form that a broker puts in front of you unless that broker is specifically going to be hired to represent YOUR and ONLY YOUR interests in a transaction. e.g. if you are a seller and hiring a broker to represent you.
ClintonB, I agree on no more than a month's rent for the broker. Most we spoke to (top firms), offered that before we even brought it up. Also agree on not hiring a broker to represent you when looking for a rental - huge waste of time and money.
But I disagree on your point about net effective rate. You should care about cash costs only, and if other care about some psychological or optical factors, you should use that to your advantage. For instance, we saw an apartment priced well below comps (and negotiable), but the broker told us that owner refused to pay her fee, as a matter of principle. She was fine with a month, of course. So what do we care about the mechanics - just amortize that broker fee over the first year, and factor that in our comparisons.
As another example, the apartment we ended up getting was overpriced, but offering a free month. The management company refused to get rid of the free rent and do a "real" price, which was annoying, but we negotiated them down a bit on the price, kept the free month, and got them to throw in some more concessions that had value to us, but didn't really harm them. Had we insisted on a "straight" rent, we probably wouldn't have gotten to a deal. Not disastrous, obviously (we had other options), but I like this outcome at this effective price better.
If your goal is to get a great deal, it's to your benefit to be creative and appear flexible, even if in reality you're lowballing bigtime.
the rental buildings like higher monthlies even if they have to give free months, because after your first year is up, there's no more free monthlies and you are paying the full rate ... plus the increase is based on the full rate.
Also, when a buyer looks at a building, he's looking at the monthly rent roll and the discounting a typical amount for improvements and incentives to re-rent units at a typical turnover percentage.
So you didn't get a great deal by paying an overpriced apartment, only you think you did.
ClintonB - I wasn't accusing you of being a dick, I was just saying it helps not to be. We're in agreement there.
Just to clarify the hugely dysfunctional commission structure for NYC apartment rentals: except in the case of specific "owner pay" deals, the renter pays ALL of the commission! There is not even the perceived buy side/sell side split that we have in our sale transactions. Evil, right? This hasn't always been the case, however, and I think the current market will dismantle the old structure and we'll see some parity again.