Rentals in NYC - Why are Tenants paying broker fees when they represent the landlord?
Are the landlords cheap? Why is the tenant paying a fee for the landlords broker when the tenant is usually going direct through Street Easy.
I've seen on the low end 1 month fee and higher end 15% of 1 years rent. The landlord should be paying the broker, not a tenant who is going direct.
It’s ass backwards and unfortunately exists in Boston too. Resi brokers add some value to landlords - marketing the space, handling tours, etc - but there’s no reason why the tenant should be paying for a service that a broker provides to the landlord.
Renting an apartment is an easy process and I’m sure that if landlords had to pay for the marginal value brokers offer them, most would just list and lease their units on their own. It’s a bullshit structure.
It's funny. I remember college in Boston. It was always a scramble for the broker fee, typically a 1st month's rent. So stupid. But now, with luxury buildings and more CRE apartments, it's becoming obsolete, and thank god. Never met more idiotic people than rental brokers in Boston. Now they all ask for a job as the market is being crushed via the buildings that have just the app and amenity fee.
It’s because of supply and demand. Rental demand has been historically high so landlords have been able to get away with it. There are no fee apartments as well. Just select that as a filter on StreetEasy.
There are also quite a few no fee rental buildings so you can deal directly with the building (Avalon has a lot of product in nyc)
Yep, most institutional PM groups think bigger so-called "luxury condos/apartments/townhomes." They typically don't have a fee for the broker. They have internal leasing agents who typically get paid a base and then commission on their vacancy and turnover at market rent. They have an application fee of 50-75 bucks and then an amenities fee they charge when you move in, typically 500-750, but almost always cut it or have some "special". It's not special if it's always half off. NYC has been building a ton of these buildings, you don't need to rent through a landlord and broker. They are becoming obsolete and the price point isn't much different anymore. Like 200-500 bucks for a newer nicer place. Maybe 700 if you want top PM and top amenities.
Did that for my current place, $1k upfront all in for a $4k studio. Didn't even ask for security, and $500 of the payment is applied to last month rent.
Have heard that for buildings 250+ units you should not be charged a fee and they should have an in house management company that handles it. Mostly in NYC, but you should never pay fees for a broker in large NYC buildings.
Why does it cost $1.50 to buy a can of coke? In 1980 it was a quarter! Are retailers greedy?
Been living in NYC for 4+ years and had to pay a broker's fee for the first time last week. Unfortunately, that's the reality of the NYC rental market since demand is so high. In especially active months, like August/September, owners can usually pass the broker's fee on to the applicant/tenant who would begrudgingly pay. Fortunately for me, the broker representing my current apartment was extremely helpful and accommodating (helped me save on moving costs, early-move-in, deliver keys/docs personally to me, etc), so I don't feel as bad paying one-month's rent to her.
On walkups or smaller building it makes sense, but the idea is that if you own a very large building there should be no broker fee and it should be handled by an inhouse team hired by the building/owners.
Oh for sure, I've toured several large buildings owned by institutional and they all had leasing teams on-site. Of course, those buildings tend to be nicer and come with higher rent premiums, so i guess the incurred expenses from having a leasing team will be passed on to the renter.
This is one of those things that is so absurd to 99.99% of the country. I would never think of hiring a broker to find an apartment, much less paying one out of my own pocket. After all, the internet exists.
During my relocation earlier this year, we had a broker more or less forced on us as part of the relocation package and not only was she not helpful at all, she actively made the process more difficult. And she locked her keys in her car. Twice. In one day. Luckily though, the landlord was paying for her.
The thing is we as the person looking/tenant do not hire a broker. We look for listings online that the landlord has hired a broker for and still need to pay a fee in some cases. It's ridiculous.
😂
That is even stranger
Street easy is not direct. Street easy is a listing service which brokers pay to put their listings on. Other brokers pay to have their name advertised next to a listing even if it isn’t their listing.
Renters pay the fee because of market dynamics. There is minimal product available to rent so landlords can push the fee to renters. Not really backwards - just market dynamics. In the commercial market for example, a tenant can hire a tenant rep to assist with a office lease but the tenant rep gets paid (usually) by the landlord’s building which is leasing space to the tenant. All market dynamics are different.
If I'm spending hours, looking at listings, reaching out to set up tours and saying ok I like this unit and want to sign/let me go look - what is the broker doing lol?
Opening the door? Saying here's the place in a studio? For that I need to pay 1 month to 15% of the rental, that's a joke they didn't do anything for me to sign or provide any value.
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