Going for Broker

On a previous broker experience, they made me sign a contract before they'd show me any places. Basically it said that if they were the first one to show me a specific place, I had to go through them to get it.

Since the Asker went with the one that showed the apartment second, I could see that being the problem.

While we could argue how fair it is to pay up to 15% of the first year’s rent for the convenience of a broker, especially when other large cities get by just fine without it, the thing that really makes me angry is when the owner tries to charge a broker’s fee for brokering nothing. For example, I checked out an apartment through a management company that operates only the owner’s buildings, and was given a key by the receptionist to check out the apartment. Nobody really helped me except handing me the keys and forms to fill out, but they want to charge me a 12% broker’s fee. So if I normally would pay broker’s fees to get their expertise and serve my interests, why the hell would I pay that unless I was desperate? The fee-slap has occurred in other scenarios, for some reason, like when I wanted to take over the lease of an apartment that I legally subletted (another management company exclusive to an owner tried to charge me on this one). I’ll just stick with Craig’s List no fee sections, I think.

What your reader has done is what is known in the business as fee shopping. It is strongly frowned upon.

If she signed a fee agreement it is going to get sticky especially if she signed with both brokers.

Btw, it is not illegal for owners to charge fees for their apartments. Owners have the right to co-broke their own apartments. Alot of landlords are getting into the act to take control of the deals and to make more money. They have the right to set up their own shops.

"What your reader has done is what is known in the business as fee shopping. It is strongly frowned upon."

*SNIFF*, *SNIFF*, I am deeply saddened that brokers 'frown upon' fee shopping. Those poor brokers!

Seriously, so you're telling me I can't 'fee shop', but somehow it's acceptable for a broker to squeeze a higher fee or choose another applicant based on the prospective tenant offering a better deal?

Negotiations are a two-way street. If a broker is upset that someone jumped ship to go to somoene else, they should look at their own practices and their 'only game in town' mentality.

I've dealt with a handful of good brokers. But did have one scumbag who kept on delaying showing me the lease until the final moment. And only then did I see ridiculous clauses like 'tenant responsible for carpeting 70% of floor' and 'drapes can only be white'. Give me a break! And after I declined this broker, they proceeded to harass and threaten me. Happily, they seem to have gone out of business. But ethics and brokers is a laughable topic at best.

Even if you do sign a paper, the fact that most brokers force you to sign this, that, the other makes the paper not worth much in court. In fact there have been many rulings against the practice of forced signing of 'standard documents' that only bite you on your butt later.

My advice is do what's best for you. And if that means a broker gets snubbed in the deal, play your cards but ultimately do what is best for you.

"Don't get pissy with the broker. Its the market that makes these demands."

And the broker who gladly adjusts fees based on the market demands. I've rented in good and bad markets and the brokers never change and the fee is always based on the brokers needs rather than anything else. 20%? C'mon, that's a figure pulled out of thin air. 20% for opening a door and walking around and not much else?

It's amazing how the tone of your responses--and revelation that you are a broker--spurs a defensive 'broker is always right' response on your part. It's as if the customer is meaningless.

A friend said it and it's quite right. In the U.S. the customer is one of the most regularly abused people around.

I see you have been eating those lead paint chips again Jack.

Your information about real estate is akin to a recipe for pork kreplach. In other words, its wrong.

First of all, the fee is 15% of the first years rent, not 20%. Depending on the agent and management company it can be negotiated. How this number was determined, I have absolutely no clue but it simply was not pulled out of the air.

I should take offense to the comment about agents doing nothing more than opening a door and walking around and not much else. But I realize you do not have the time to learn the facts of the real estate industry due to your strenuous schedule of being a professional tourist taking pictures of bright shiny signs. But I would be more than happy to enlighten you.

The duties of a real estate agents range from marketing apartments, contacting landlords and property management companies for listings, preparing leases, running credit reports, finding comparable apartments for clients and providing pertinent data to clients. It’s a helluva lot more than simply than walking around and opening doors.

By the way what Ivy League school did you graduate from? You were so quick to pick up that I am an agent from my comments. Unfortunately I picked up nothing of value from your words.

I never said the broker is always right. I am just telling it like it is. The customer is very important but some of them can be annoying as hell with unrealistic expectations, bad credit, or the fact they do not have the money to afford the apartment.

If you think finding an apartment with a broker is stressful try being a rental agent. A rental agent has to go through the same experience of everyday of finding an apartment and has to be ready to educate someone who has no idea what they are doing.

If you notice the sharp tone in my comments it annoys me when people who consider themselves authority on the subject just because they had a couple of run ins with some brokers who start shooting their mouth off about the subject. Their words offer nothing but trouble to the rest of society. However its one of prices we pay for our constitution. You know what that is right? Although I find your words misleading I will however defend your right to speak. However don’t expect me to remain silent when you say something that is false. Don’t worry. I take great pleasure in correcting a member of Phi Beta Kappa.

Jack, if you have such a grievance against the rental industry then I challenge to get a license and join up with a firm. See if you can make a difference and be one of the good guys. The great thing about being an agent is that you can make your own hours, which will give you plenty of time to fulfill your vital duties as a day-tripper. Surely a Harvard graduate such as your self can accomplish this task.

I am not arguing that the owner is not free nor has the legal right to engage in real estate transactions (in this case renting their apartment) on their own behalf without a license. Nor am I arguing that they don’t have a right to set up their own management office to manage their properties. These rights are both basic and perfectly reasonable. My complaint is when the owner charges me a broker’s fee, even when no broker or agent assisted in the real estate transaction.

It is my understanding that so long as the owner, superintendent, or managing agent does not keep any part of the money, then they can charge a broker’s fee (which will go to the broker). Besides charging an application fee, which covers the credit check and application processing, or other basic processing fees (co-op charges), they can’t profit from commissions or fees from the rental of an apartment, otherwise it is illegal and “key money.” Is that right?

So the broker’s fees that the owner or his managing agent attempted to charge me should go to a broker who has a contract with the owner that stipulates an Exclusive Right To Rent Agreement? It should not go to the owner?

If this is the case, it is legal but I still don’t see how this serves the interests or needs of the prospective tenant and seems like an unfair charge. I mean both the broker and owner win, not the tenant. The broker gets their commission fee regardless if they do any work for a specific tenant and the Exclusive Right to Rent Agreement protects them from having an owner go to another broker when they have performed a lot of work on the owner’s behalf. The owner gets a tenant either way, doesn’t have to pay for it, and they have the flexibility to negotiate on their own behalf perhaps obtaining more in rent money or other concessions. So how does the prospective tenant benefit in this arrangement besides an apartment they would have received anyway?

If a broker performs their service and helps someone find an apartment that suits them the best, then they have earned their commission. However, if a tenant gets an apartment on their own by finding the apartment and directly negotiating with the owner, then I don’t see why they are responsible for the broker’s fees. In that case, the owner has the agreement with the broker—they should pay the fees.

For example, I was a tenant in a legal sublet and I wished to takeover the lease. I passed the application process, qualified for the apartment, and the owner then agreed to let me move in. However, the owner then wanted me to pay a 12% broker’s fee when presenting the contract. I was irritated because it seemed unfair. I lived in the place already, called the owner myself, and directly negotiated with only the owner or his managing agent, and yet I was still responsible for broker’s fees because of some contract the owner signed? Sorry, this is ridiculous.

Grunt, you need to get your facts straight.

"But I realize you do not have the time to learn the facts of the real estate industry due to your strenuous schedule of being a professional tourist taking pictures of bright shiny signs. But I would be more than happy to enlighten you."

Nice grunt-like insult. I was born and raised in this city. I've dealt with slumlords growing up and forced evictions as well. And real estate management companies/agents that really just don't care about anything but a fee. I've also dealt with "brownstone Brooklyn" brokers and such who--when I moved back to NYC from the midwest--took me for a non-New Yorker. And then suddenly changed their tone when I told them I was born and raised in Brooklyn.

It speaks volumes to me you have enough time in your brokers life to debate issues on a comment section on a website. No broker I have ever known barely has time for lunch, let alone the luxury of doing this.

And 20% is more common than you allude to. Any person hunting for a place in the past 5-6 years has met that figure head-on dozens of times.

"Surely a Harvard graduate such as your self can accomplish this task."

Is that a joke or an insult? Harvard and me and nothing to do with one another.