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March 2, 2009
Non-Working Broker Demands Fee
How would you handle this situation...
You've emailed with a broker who tells you to go talk to an owner about their apartment. You make an appointment with the owner directly, see and want the apartment, and then the broker - whom you've never met or signed anything with - tells you that their fee is 10% the yearly rent and that if you want the apartment that you have to cough up the fee - even though you're already dealing directly with the owner.
The broker did make the connection, which is a service for which he should be compensated. Still, he didn't show the apartment, nothing was signed, and 10% (another broker we spoke with actually wanted 12!) is crazy at this point anyway...
Do you offer a small compensation, nothing at all, or walk away from the messy and expensive prospects?
Any thoughts?
Comments
Hi Turnandrun
What does the landlord say? The realor should have made his fees known in full upfront before showing you anything, but I'm not sure if you will be able to getthe apartment without paying the fee. If it doesn't work out I have an apartment in Park Slope available for April 1st - and it is definitely a no fee apt. If you give me your email I will send you the details.
Posted by: Turtlejam19 at March 2, 2009 5:16 PM
Will the owner offer you a lease?
Posted by: Putnamdenizen at March 2, 2009 5:17 PM
Fees run as high as 15% of the year.
Not that you should necessarily have to pay 10% of the year for the landlords phone number, but...
Posted by: christopher at March 2, 2009 5:22 PM
Wow - 15% still?! I had thought that the way things are going and with CraigsList, that that was a thing of the past. Most of the brokers who showed us properties were either getting 1 month, fee paid by the owner, or half month from tenant and half from owner.
I paid 15% once, but it was 2000, the height of the tech boom, and in Chelsea.
Legally, I feel like he has little rights, but he should get something for making the match. I'm just blown away to be charged so much for a phone number. What is a phone number worth when it gets you the apartment you want - 1K?
Posted by: turnandrun at March 2, 2009 5:51 PM
I agree 15% is nuts, but it's still pretty common.
The "OP (owner pays)", free months, 1/2 fee things are all common in down times (I was a realtor for a bit in 2002 and the economy was crappy post dotcom and things like OPs and free months were the rage). Even in 2002 the firm I worked for was charging 15% if there wasn't an OP or some other incentive.
Ask the agency what the "finders fee" is for a listing. Then offer to pay the agent that.
Posted by: christopher at March 2, 2009 6:59 PM
why don't you just suggest a lower number, explain your position, and see what the broker says?
the commission does seem high, but keep in mind that brokers do a lot of legwork that never earns them a penny (e.g., showing 5 apartments to someone who ends up renting somewhere else). also, ask yourself what you'd say if you were shown 15 apartments and the broker asked you for a *higher* fee in recognition of all the extra work involved.
Posted by: z at March 2, 2009 7:25 PM
Did you sign anything that says you will pay a commission? If not, why would you pay?
Posted by: lechacal at March 2, 2009 8:31 PM
If you really like the place and you have themoney go for it. Even though you are right that parasite of a broker is not going to unattach himself until he gets his blood fill. Tell the owner you would have rented if he would have not used a broker.
Posted by: hannible at March 2, 2009 8:37 PM
why do you need the broker? if the landlord gives you the lease directly, blow him off.
Posted by: invisible at March 2, 2009 11:17 PM
Is this "broker" licensed? Sounds like he isn't and is trying to pull a fast one.
Make sure the landlord is for real and you get a key and a lease on the day you fork over your cashier's check with the landlord's name and address on it and you are standing in the apt with the landlord when this transpires. Just saying.
Posted by: mopar at March 2, 2009 11:39 PM
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