I am moving off campus next semester, and I have found an apartment that I interested in. The original listing was put up by a broker, and I have already contacted him and set up an appointment on Monday. The listing is not up anymore, but I think it included a 12% broker’s fee. I have just come back from a guided tour of the apartment from the company that owns the apartment building, and I am quite satisfied with it.
What reasons are there to go through the broker to rent the apartment? The broker’s fee is some percentage of a year’s rent, correct? I am only going to living there for 12 months, so would the consideration be whether the broker can get me a cheaper monthly rent, and whether the cheaper rent plus the broker’s fee will be lower than the normal rent without the broker’s fee?
The main reason I’ve always used brokers is because apartments go FAST in NYC. With a broker you can see a dozen apartments, pick one you like, fill out the paperwork and get your deposits paid, etc. all in a single day. Many, many times I’ve put in an application for an apartment only to find that someone else looked at it an hour before I did and submitted their paperwork for it ahead of me so I didn’t get it. If I’d had to go look at buildings I found on my own I’d maybe get to see one a day, if that, because of the effort it takes to track down an apartment in this city.
If you were lucky enough to stumble upon a place without a broker, you like it, and they are willing to rent it to you then that is fabulous and you should jump on that. Otherwise you might consider using a broker and paying the fee simply because your other option might end up being no apartment at all.
Then my best option would be to directly apply for the apartment as soon as possible, then use the broker if the room(s) have already been taken, correct? It seems that the value of a broker comes from making searching for apartments easier.
Just a heads up that a building might refer you back to the broker for the application process, which would include the broker charging you the fee. The reason a building would do this is if it generally relies on this broker to fill vacancies; they don’t want to piss off the broker by circumventing the process and denying them the fee.
In my experience, generally larger buildings managed by an agency tend to stick with their brokers’ process, while smaller buildings managed by Some Guy might be more willing to bypass the broker to get a tenant in. As always with NYC real estate, a million exceptions in both directions.
I’ve never heard of a broker claiming to provide tenants with lower rents - I think the fee is for the convenience of using a broker and access to their listings.
Also, brokers can have exclusive contracts with particular buildings/landlords, such that it doesn’t matter if the broker was involved or not–they still get their fee. Sounds like BS, but definitely exists. Saw it not infrequently on the commercial side.
Not directly no, the way the OP is thinking about it. However, I have looked at non-broker apartments and brokered apartments in the same neighborhood, and I found that the brokered apartments were much nicer and in most cases, cheaper than non-brokered apartment.
Basically landlords who care about things like credit checks (all part of the broker process) also tend to keep their building and apartments to a nicer standard.
So in general: to the landlord, the broker provides the service of doing background and credit checks (screening of tenants), and can often fill units quickly. To the tenant, the broker streamlines the apartment hunting process, and on average gets them nicer places.
That’s the gist of how it works, or how it is supposed to work.
I am completely editorializing here, but I would add it doesn’t always feel that way at the lower end of the market, for cheaper apartments that young people, college students, new professionals, etc. are looking for. These apartments are still in extremely high demand (even when the news reports ups and downs in the rental market in NYC, this niche is always in high demand), so the brokers don’t need to incentivize their services for this segment of the market very much. They literally don’t need you as a customer, there are 25 other people who would take the apartment with pretty much zero effort on the part of the broker.
In this sense, it can be a frustrating process for the prospective tenants. It can feel like you are paying someone a lot of money to show you an apartment, and if you express any concerns about the rent, the area, the building, etc, the broker response might be “Eh, well, take it or leave it. I can rent it to someone else this afternoon if you don’t want it.” There are still good brokers who work with this segment of the market, so I’m not saying it’s everyone. But in many cases, it doesn’t feel so streamlined, it’s more like steamrolled.
As the type of apartments you’re talking about gets more expensive/more luxurious, the broker experience is more typically service-driven for these tenants.