Landlord Paying Broker?
Hi. I am trying to rent out my apartment. It’s a great apartment, but I haven’t had much luck with Craigslist. I have asked two brokers to show it. They both said that the way it works now is that the landlord pays the broker the equivalent of 1 months rent instead of the prospective…
Hi. I am trying to rent out my apartment. It’s a great apartment, but I haven’t had much luck with Craigslist.
I have asked two brokers to show it. They both said that the way it works now is that the landlord pays the broker the equivalent of 1 months rent instead of the prospective tenant. I guess things have gotten so bad that it has come to this.
Has anyone else had this? To me it opens a whole new can of worms. Who are these brokers really working for if they are being paid by the landlord?
Agree, brokers are not usually very helpful for either the landlord or the tenant.
Thanks for all the comments. Seems I was able to find someone through Craigslist afterall. The brokers didn’t pull through. They really only showed it a handful of times and then tried to get me to come down significantly in price for the tenant. I felt like they were working for the tenant. Also, one of the brokers didn’t tell me I had to pay until after they had already found a “great” tenant for me.
Have you considered lowering your rental price to take into account how much you would pay a broker? I feel like apartments that don’t rent are too expensive, regardless of whether a broker is showing.
we posted on craigs list and got tenant signing lease 13 days latter. Brokers do not do magic. Just look at supply-demand and put reasonable price. Make good picture / description and people will come in.
… or maybe right now is slower time of the year.
slopenick — there are 3 reasons:
1. It would take 2 years of lower rent to make up for the fee, and I’m only signing a 1 year lease, so there is no guarantee that I’ll be there 2 years (the place might turn out not to suit me or I might find a better deal or the landlord and I might have conflicts, etc.). There is also no guarantee that the landlord won’t raise the rent 10-15% after the first year anyway. So, paying the fee and then hoping to make it up in lower rent is a higher risk approach.
2. I’d rather have the money I spend on my apartment go to the landlord than the broker. Hopefully, getting a higher rent will encourage the landlord to maintain the building better and respond to repair requests in a more timely fashion. Obviously, it won’t matter with some landlords, but with small landlords who don’t have a lot of free cash flow for dealing with unexpected repairs, it could help.
3. The broker does nothing for me that warrants getting paid that much money. The broker works for the landlord. The landlord should build the cost of the broker into the rent and pay the broker. That way when the broker’s fees get too high, the landlord can negotiate or just say ‘no’ and go with a different broker. A tenant doesn’t have that option since they can’t choose which brokers will be the ones managing the apartments they want to see, so there is no mechanism to control brokers’ fees when the tenant pays.
northsloperenter – just out of curiousity regarding your comment about paying extra rent, when you say you’d rather pay the extra $100/month, is that because you assume you will only be in the apt. for a year, and so $1,200 paid over the year will be less than the fee (+/-$2,000), or is it because you just don’t want to pay all that money upfront and you’d like to leave your option open to leave after a year whereas you’d be committed to two years if you paid the fee?
northsloperenter – that has been my experience as a landlord as well. Even when the renter was paying, the apt. broker essentially worked for us – helping us evaluate tenants, showing the place, etc. They want the lease signed ASAP and to move on to the next apt.
“We actually had the broker tell renters that if they rented it no fee, the rent was $100 more per month, and that’s what the renters chose.”
For any apartment over $1000/mo, I’d much rather pay $100/mo rent than a fee.
Also, as a tenant, I’d rather give my landlord more money every month of the lease than write a big check to a broker at the lease signing. I’m actually getting a service from the landlord.
“If you pay, they work for you. If the tenant pays, they work for the tenant.”
No.
In NYC, if the landlord pays, the realtor works for the landlord. If the tenant pays, the realtor works for the landlord.
The only difference is that when the landlord pays the person paying is both the person getting the service and the person with leverage. When the tenant pays, the realtor is primarily interested in getting them to sign a lease for the 1st apartment that they see and would rather dump them and find another tenant than negotiate or put up with any annoying requests (for example, “an apartment below the third floor”).