I was recently shown the same apartment by two brokers. I did disclose this fact to both brokers. Since the second broker was charging a lower fee I decided to go with him. The first broker says this is illegal - Is that true?

2005_04_ask_broker.jpgWe don't see how it's illegal. Brokers share apartment listings all the time. They are legally allowed to charge any commission percentage that they want, and can certainly make theirs lower than a competitor's. You have every right to go with the one offering you the lowest fee (by the way, in New York state, a broker or real estate agent can work for either the seller or the buyer/renter and is supposed to disclose up front which party he or she is working for).

In cases where brokers share listings, there is typically an agreement to split the commission (which varies based on the type of listing - open, co-brokerage, etc). And in case you're wondering where exactly your broker fee money goes, the listing agent (person who secures the listing), the real estate agent, and the broker all usually get a cut. (FYI - although a lot of people use the terms "broker" and "agent" intergangeably, they are different. According to New York Department of State, the broker is responsible for the supervision and conduct of the real estate brokerage business while the real estate salesperson works for and is supervised by the representative broker).

So we're left wondering why the real estate agent told you it was illegal, unless perhaps he was supposed to have an exclusive listing where no one else showed the apartment (it seems unlikely to us that an unauthorized real estate agent would be able to get a key without someone's permission, though). You clearly did nothing illegal, so we say enjoy your new apartment, guilt-free.

Update: Ask Gothamist reader Peter pointed out that the Asker in this case may have signed a contract with real estate brokerage #1 in which she agreed to use said broker for any apartment that they showed her first. In this case, it may have been unethical and perhaps illegal for the renter to use broker #2. What she should have done was try to negotiate with broker #1 to lower their fee. We're not sure what she can do after the fact to amend this situation if indeed a contract was signed. Stay tuned for more info.

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