Broker’s Fee for No Services Rendered?


    I’m interested in an apartment my friend is moving out of. The owner, who owns a management company and I believe is also a broker himself, wants to charge us a one-month’s-rent broker’s fee. This seems like BS to me, as he has provided no broker’s services whatsoever. Any ideas for negotiating with him?

    9 Replies

    1. You guys think any idiot can get a broker’s license (probably true actually) So why are you geniuses so naive about NYS license law?

      Hunt, I’m cranky because you again make little sense. Let me explain again to both you and dirty hipster AGAIN, like high school.

      One has to be an attorney or have a real estate license – yes, that thing, you guys think is worth the price of a scratch off ticket – to legally get a commission on a real estate transaction in New York State. The 80 bucks I tip my supers everytime I rent an apt, is actually illegal.

      Is it unusual for a broker to “broker” his own properties, yes, but not every R.E. Agent is a pushy 20 something y/o, desperately showing 30 apts a week – hoping to land a deal to pay their rent.

      This man probably worked hard, saved his money, bought a couple of buildings of his own and, as the owner/broker, has chosen to give himself the exclusive right to rent – no different from an owner giving Corcoran exclusive agency/right to sell on all the sponsor units in a particular Coop or Joe shmo Realty having the same on that rental building on PPW & X street, you know, the one that never has a “for rent” sign up.

      And when there is a thud in that old lady’s rent -controlled apt and you call the owner’s number you got from the super, hoping rent it; the manager will tell you the same thing: “… Realty has the exclusive, you have to go through them” and believe me, they are not going to do anything more to “earn” their commission than give you an application form.

    2. This guy seems shady- he has done absolutely nothing to deserve a fee. Call up the NY Real Estate Board as mentioned by another poster. Then when you talk to the landlord bring up the conflict of interest of issue and the words “real estate board”, “ethical review” and see what he says. He may act like a hardass and still demand the fee.

      I am another one who refuses to pay a realtor fee. I always see what realtors have to show but always manage to find a nicer apartment by myself. If I could have found a really nice apartment that is below market value ( or better than what I found myself) with a realtor fee I might be willing to pay up. But I am willing to put in the sweat equity to find an apartment through Craigslist but not all people are.

      How much do you like the apartment vs. how much do you want to deal with the hassle of looking for another place? Also think about the fact that the way he is nickel and diming you now might indicate how he might act as a landlord (dishonest, cheap ass, penny pinching a**hole who doesnt fix stuff etc etc). But your friend should be able to answer that question for you.

      Good luck!

    3. Thanks, all. I appreciate the suggestions and am gonna try to negotiate with him. I think it’s an ethical gray area at best and a definite douche move. We’ll see how this plays out.

    4. Hey Crown – I’m thinking that it was a bit past your bedtime given how cranky your reply was. First off, I will represent to you that I absolutely know what I’m talking about. Moreover, on what planet does holding a license imply that the conduct of the licensee is proper? Moreover, your assertion that the landlord’s conduct is ethical, is a personal opinion and not a statement of fact. In my opinion, which you obviously don’t share (and elegantly made note of), the situation, as presented by catpita, presents a conflict of interest. Even in a typical landlord’s agent scenario, the agent is rarely (if ever) the ACTUAL LANDLORD. If this were common practice, it would be in the best interests of a lot of landlords to also obtain their RE license (which unfortunately, is not that difficult nor expensive to obtain). “Want to rent in my building? Sure – no problem, but oh, by the way, I also happen to be a licensed broker, so you have to pay me a fee as well, sucker!” As for “working for free,” in this situation, it sounds like the broker did absolutely nothing. The prospective tenant liked the apartment well before even knowing who the heck this guy was, and it was a direct referral from an existing tenant. As a landlord, he should be thrilled that he has another tenant lined up without having to deal with the uncertainty of finding enough applicants, dealing with listing the unit, etc. As a broker, he is being greedy and wants to collect his “fee.”

    5. Why the attitude Crownlfc? Sure it might be “legal” but it’s a douchebag asshole pussy move to be the owner of a property, and charge a broker fee because you are licensed. Getting a broker license isn’t exactly a challenge and no, this landlord isn’t providing broker services. Total money grab, and I just wouldn’t deal with a landlord who is obviously so hell bent on getting every last penny he can from his tenants.

      “his/her business to work for free but this guy should forgo people willing to pay him a fee because “he’s a broker””

      wtf? he’s not working for free – he will be getting rent.

      And no – it’s not commonplace. landlords and management companies that do the leasing themselves do not charge fees. once in a while you encounter an asshole like the guy mentioned above.

      but there’s nothing you can do about it. if it’s a good deal with the fee factored in, take it. if not, walk.

    6. Hmmm, “he has provided no broker’s services whatsoever.” He only happens to broker/own/manage an apt you want to move into – the nerve of him.

      So because the owner happens to be a LICENSED broker,in your opinion and the other two hapless posters, he should work for free because, hey, he’s a “sleazy” broker and you know, “they don’t really work and stuff.”

      No one would ever ask a licensed plumber, hair stylist or mechanic who owns his/her business to work for free but this guy should forgo people willing to pay him a fee because “he’s a broker”

      Long story short – “Landlord” is right – he can charge you a fee if he is licensed, sightly tacky perhaps but it is totally LEGAL and ETHICAL. If it stays on the market longer than it should because of, that’s on him.

      If you don’t like it, take Count’s “advice” – go on Craigslist and with “minimal effort” you should find a place in no time, according to him.

      Rebny? / AG’S office? “Hunt” doesn’t know what the hell he’s talking about.

    7. License aside, it sounds somewhat unethical, but is probably perfectly legal. If you really want the apartment and don’t feel like looking for no-fee units, you may have to ante up and just consider it the cost of doing business in this city. I would, however, try to level with him. See if you can cut the fee in half (tell him you can call it an “application fee”) and point out how it was a direct referral, stress your strengths as a tenant(i.e. good credit, income, etc.). Also, perhaps in lieu of the fee, you can offer to give him 2 mos. security upfront, which would be returnable, or 1/2 mo. fee and an additional 1/2 month security.

      Just be sure to execute the lease BEFORE paying him any fee. Once you have an executed lease, I’d do some legwork on the issue. You can seek an opinion from the NYS AG’s office and if the broker/owner is a member of REBNY, you can get an opinion from them as well.

    8. I would just say no, especially if your friend will be leaving soon. As the broker is also the owner he has an interest in getting a good replacement tenant as quickly as possible. If he still insists then I would move on. I personally refuse to pay broker’s fees on principal. Rental broker’s are obsolete these days – why pay someone to find what you can find yourself on Craigslist with minimal effort.

    9. If he is a licensed broker, he has a right to charge you. You can always negotiate with him.