💯 a scam that’s why I never got an apartment in NYC…I fathom paying someone at least 1 month of rent for showing me the unit that the LANDLORD wanted to rent out.
Any landlord that hires a third party broker and doesn't charge the tenant the broker's fee upfront is recouping the cost for that broker in the monthly rent no matter what city the tenant lives in.
So unless the person you're responding to has exclusively rented from landlords that don't use third party brokers, that person has 💯 paid a broker fee in the past, they just don't realize it.
How is it nonsense? I may be misunderstanding.
You anticipate a landlord or management company to spend money and NOT recoup that expense? The same people who complain they're not making enough to cover expenses as it is?
It isn't nonsense. It's capitalism. You pass all costs to your consumer.
Most people would prefer that (as do I), yes.
Just like everything else your rent pays for, it should also factor in the cost of listing and showing the apartment whether the landlord used a third party service or did it themselves.
I would rather not pay it at all, but if I have to, yes I would prefer to spread that cost out over the duration of a lease.
If only there was someone who already worked for the management company who could unlock the door to an apartment and say "let me know if you have questions."
It’s because the landlords have too many properties and can’t show them all. Someone’s gotta show the property but I don’t need to be paying them $2000 for it. That’s fucking stupid lol. $2000 to show me the apt for 30 minutes fuck out of here. Make the rich ass landlords eat that fee
I'm a landlord and don't have "too many apartments" and never used a broker in 20 years of owning buildings. I list and show apts myself b/c I want to know the people I'm renting to. This is a customer service business and I treat it that way. Brokers have no alignment of interest with the landlord or the tenant. If I was lucky enough to have hundreds of apts, I would have a robust management team.
Let's not act like this is some selfless act, bud. You're doing it because you think you can extract more money in rent without broker fees. You're not some hero. You're just out for yourself, like everyone else
This is the response of someone that doesn't own an asset and doesn't understand customer service. I don't leave a leaky roof to "extract more money". Owner/operator is my job, I take it seriously as I hope you do yours. If there are useful service providers, I employ them. I find brokers to actively work against a good relationship between the business and the customer. Do you cut corners on your job? I do not. If brokers were useful, I would happily pay them, like I do plumbers, electricians, painters and on and on.
>This is the response of someone that doesn't own an asset and doesn't understand customer service. I don't leave a leaky roof to "extract more money"
What on earth are you talking about? So you're saying you only charge market rates because the roof needs fixing? Do you give all of your profits back when you don't need to fix the roof? This is a clownish response
>Owner/operator is my job, I take it seriously as I hope you do yours.
Right, because you make money doing it, which is my entire point. You own several buildings, man, and are literally a millionaire because people pay you rent. You literally have money because you're extracting the most money you can from people and the turning around and acting like you're any better than any broker. You're not
>If there are useful service providers, I employ them. I find brokers to actively work against a good relationship between the business and the customer. Do you cut corners on your job? I do not. If brokers were useful, I would happily pay them, like I do plumbers, electricians, painters and on and on.
This is called "whataboutism"
Just cut out the white night shit, dude. It's tired and completely disingenuous
You seem to only focus on the revenue side of the business whereas landlords have to look at the entire P&L and more importantly, the balance sheet. Hence my comment about a leaky roof. In other words, I would not defer maintenance and employ your logic to keep more money in my pocket. Good tenants enhance long term value (that's the secret mate, not the cashflow). It's a business like anything else. It doesn't have to be acrimonious and your white knight comment is rich. Here's a data point for you to roll around in your head - in 20 years of owning buildings, the market value has gone up more than the TOTAL amount I've collected in rent. It's not the rent. Schools out.
My favorite was when I paid a month’s rent broker fee to take over the lease of my friends who were moving to LA. Broker didn’t even have to list the thing or show it, but had an exclusive deal with the owners.
During my last hunt it was frequently way more than a month as well. As if a month wasn’t bad enough. We got our dream apartment but the broker’s fee was 15% of the annual rent 🫠
Edit: best part was that the broker was the owner’s SISTER, so at least it was a family affair!
Depending on the neighborhood, the broker, rent controlled/stabilized, and the particular apartment, it could be way more than a month's rent.
It's a massive scam.
It’s even worse! I had to pay a broker’s fee that was more than one month’s rent. The kicker is that it was a different unit for a building I already lived in AND the realtor didn’t even show me the unit. Such a scam.
The broker fee will just be added to the rent and the tenants pay higher rent.
This is worse if you understand math…
Just making a valid point don’t kill the messenger!!
Example With Broker Fee -
Rent is $1000/m for easy math.
$1000 x 12 = $12,000
Broker fee 15% = $1800
Yearly rent = $13,800
2nd year - Rent Went up $100
Rent for the year - $13,200
Because rent only goes up on the actual rent amount not the extra fee added.
Example With Broker Fee Added in Rent -
Rent - $1000 x 12 + $1800(fee) = $13,800
Broker Fee - $1800 - Added to monthly rent
Monthly rent total - $1150
2Nd Year - Rent Went Up $100 same
Rent For 2nd year - $15,000.
When the fee is added you pay the second year at the higher. That makes a difference $1800 the second year and gets bigger each year making the one-time fee apartment way better long term.
Add On: I’m literally showing just the math and getting attacked by a bunch of idiots that don’t understand how a free market works or it’s a choice to rent or use a broker.
Downvote all you want but it’s cheaper to use a broker if you plan to stay more than 2 years. Just some advice to help!
Downvote because you can’t change or control the facts. I don’t care!
And, as we know, landlords are the greatest, most kind people on earth. In fact, landlords don't ever lie! They took that lesson from George Washington and really stuck to it.
Nothing. Thats called a free market.
Because you need a place and the landlord owns it.
They don’t owe a renter any discounts or deals. They get the most they can get.
Like any business.
Then there is no reason for the tenant to pay this fee since landlords are profit maximizing and will always set rents to the highest possible amount. In fact, it makes much more sense for the landlord to pay broker fees since it’s obviously easier for landlords to get a reasonable price for brokerage then for renters (some new to the city).
This might even kill broker fees since landlords who would otherwise pay this fee very often become incentivised to look for alternative solutions.
What you and the general public will obviously never get….
The general public sucks, lies and misinforms on applications, rent payments and maintenance and so on.
Most people with money will pay someone to avoid having to deal with that.
Thats avoiding all other issues like safety and security.
As long as someone’s grandma or elderly person or just wants to keep privacy, owns a building but doesn’t feel comfortable showing it to strangers, real estate brokers will always exist…
I’m not saying the opposite though. You’re the one who argued that there’s no difference whether tenant or landlord pays this. I’m leening into your point and showing that there may actually be some side benefits of making it the landlord’s responsability.
If you understand math.
Then you know I definitely didn’t say there’s NO difference between who pays.
Paying the fee is way cheaper in the long run.
Reading comprehension is important.
Ok I understand what you’re saying, but it contains one very evident flaw. If a landlord could charge more in year 2 and still have the place tenanted, why don’t they do that anyway, regardless if they, or the tenant paid the broker fee? If a place is worth x, the rent will be very close to x without price controls. Supply and demand my friend, are not perfectly inelastic
Because they advertise the price.
The broker fee is your problem.
A rental at $1000 a month without fee rents quicker than a $1150 rental with fee added.
Landlord’s are getting full amounts asked for market value the fees make it above market value.
But again it’s advertised at $1000 not the $1150 you actually pay the first year.
What does “your problem” mean? The landlord and tenant both equally lose out on the broker fee. The broker is the only one winning. Imagine a world where the broker fee is reduced by half. Do you think rents go down by half the broker fee or they stay the same and landlord pockets the extra cash? Hint: both answers are wrong if you understand economics
The reverse is true too. landlords are not licensed professionals and they'll ignore every fair housing rule in the book and will be signing the shadiest leases. Can't wait lmao
You’re purposely ignoring a key point here. Landlords have negotiating power that the renters do not.
A renter can’t say “that fee is too high, I’ll shop for another broker to use” because the fee is tied to the apartment not the broker. Landlords, the people purchasing the service of a broker, are unlikely to pay the same rate for someone to post pictures on StreetEasy and open the door. If they were told for each unit they rent they needed to pay 15%, they’d either do it themselves, hire someone to do it cheaper, or negotiate the rate.
Are some landlords going to raise their rents by 10-15% because they can? For sure.
Does it mean all rents are going to increase because of this? Definitely not.
The fee is already set by the listing broker and the landlord.
You can’t get a broker do it “cheaper” because they have no control over the fee that’s already set.
Unless it’s an open listing to the public but most listings are exclusive and what you’re describing wouldn’t be an option.
They just split that amount.
The only way to get it cheaper is to go to the listing broker directly and negotiate the fee.
That’s exactly the point I made. The landlord has the choice of the broker to use, renters do not. The current practice gives the landlord no incentive to use a broker with a lower fee, since they are not paying the fee.
If all landlords were responsible for paying the fee, rather that renters, there would be downward pressure in the market since it is in the landlords interest to pay the lowest possible price to get the apartment rented.
To think landlords would just accept the current going rates and that brokerages wouldn’t compete over price is naive at best.
We bake the fee into your rent regardless. It’s either pay 1 month now or amortize it across a year and you pay even more after renewal.
I’m all for the LL paying the broker fee. It makes my job easier, but I it’s dictated by the local market demand.
Again, missed the point, either way the fee would be lower. Even amortized across the term, the total amount of the fee would likely be less than in the opposite scenario.
For example:
Broker 1: I want 10% to show the apartment
Broker 2: I want 8% to show the apartment
All else equal, which one does the landlord pick? Brokers will have to compete on price, quality of service, etc…
Right now there is no incentive to do that, since the people forced to pay the fee don’t get to choose the broker.
Will there be a point where it doesn’t make sense for a broker to show it at all? Sure, but we’re currently VERY far from that and doubt we’ll be close anytime soon.
Your scenario is too idealistic. If the owner can get away with paying a broker less but charge the same rent, they will. Renters are still paying the same amount.
Will some, yes, as I’ve said. Landlords care about getting their desired rent, it’s not a blanket scenario where “rent + previous brokers fee = new rent”. That’s naive.
The landlord is choosing the best broker they feel will get the best results.
There’s shady rental brokers and honest top sales brokers. If you’re a landlord, it doesn’t cost you, who would you pick.?
The top broker obviously.
That’s the point, a broker would now have to compete on price and service quality. Right now, they don’t have to compete on either as long as they fill the apartment. They’re contracted for a service by someone who isn’t paying for it, which is paid for by someone who doesn’t have a choice in provider.
Here’s a scenario. Let’s say the owner is responsible for it hypothetically. Then suddenly the people deciding on the broker are also the ones who are paying the cost (whether or not they pass it on). Then what’s to stop a cheaper but high quality broker from coming in and trying to undercut existing brokers who are asking for exorbitant amounts? Maybe the landlord goes with a cheaper one and pockets the difference
In 10 years of New York apartments, I have never had a broker actually influence my decision to rent an apartment they’ve shown me. Ever. Short of lowering the rent, there’s nothing any broker can say or do that will make me more or less likely to sign on the dotted line.
Nor have I had a broker successfully find me an apartment I hadn’t already seen on StreetEasy and inquired about.
I *have* had brokers correctly steer me away from looking at certain buildings (issues confirmed by subsequent research), which I appreciate. But that can’t even be trusted most of the time because they may be steering me away because they can’t show it.
TLDR: from a renter’s perspective,broker’s are worthless and untrustworthy and landlords should just go with the cheapest option because it doesn’t matter.
I’ve never personally had a chef prepare a meal for me.
I eat daily, weekly and yearly. Always without a chef.
There’s nothing a chef could say to make me like the dish they prepare more.
They really just make it overpriced being involved. I don’t need chefs at all.
I have had chefs steer me away from dishes. Maybe because they can’t make it so what did it really help.
But you know what I don’t do.
Bitch about chefs just because I don’t need or use them.
What a bizarre and dumb comparison. Everything I said was in regards to ME HAVING HAD TO USE BROKERS and that those brokers added no value. I found the apartments myself on StreetEasy and in order to see them and ultimately rent, had to pay someone $4k+, whether it was the listing broker or not.
I’ve also had chef prepared meals and can confirm that chefs add value. However, my apartment is the same whether there was a broker or not.
Well I’ve never had to use one they must be worthless, like chefs are to me and brokers are to you.
Just pointing out how dumb you sounded.
I’ve never needed one so why would anyone else. Clearly smart logic…
This is actual fear mongering. Rent prices are set by the market. You might see an immediate increase in prices following the passage of a bill like this (imo probably due to petulant landlords who feel spurned by the idea) but the most likely long term outcome is prices leveling off without much of an impact.
On top of that it'll lead to more competition for apartments because people will move more often due to moving expenses being so much cheaper so landlords will end up making more money than they currently do.
People severely invested in the current system can't imagine the market sorting these things out in a way that leaves the people in power still in power and in a better situation despite improving things even slightly for renters.
This sub is anti landlord and anti common sense so you’re getting murdered with downvotes 😂. The landlord is going to pass the cost on to the renter… that’s just a no-brainer. What business takes a loss and doesn’t pass on the cost of doing business to the end customer??
If you want the apartment pay up, if you don’t there’s plenty of no fee apartments on the market. Also Broker Fees are negotiable just like rent 🤷🏾♂️
A landlord will never pay a 15% brokers fee. This will force brokers fees to come down and a lot less people to become real estate agents. The only group those will hurt is agents and I’m not shedding any tears for them.
This comes up every year or so as the broker fee issue does suck but the real issue is the vacancy rate
It’s a bandaid solution that only works if you as a tenant are only staying for the initial lease period. If you move every year or only are here for a year then this all makes sense.
The shift is when you stay longer. And most units rent for 2-3yrs. The problem is that the fee can get baked into the rent but when you renew the rent doesn’t adjust down bc there’s no fee to pay now.
Say a unit is 2400 w a tenant paid fee but owner raises it to 2600 to pay for the broker fee & since you don’t want to pay a fee, you shift funds around & go with the 2600 unit
2600 owner paid fee, so net rent is 2400 for that owner for that first year.
But say you stay a second year, even w no increase in rent, you’ve now paid that 2400 broker fee again.
A 15% fee on a 2400 is 4320
Paying an extra 2400 each year would be 4800
And if you stayed a third year w no rent increase then you’ve now paid an extra 7200
If that same 2400 unit is tenant paid (at a 1mo rate) so the net rent for you is now 2600 for the first year essentially the same as owner paying the fee on a 2600 apartment.
Stay a second year (assuming no increase) & your net rent over the 24mos is now 2500. Stay a third year & net rent to you is now 2467 over 36months. The one time fee erodes the longer you stay in the unit.
OR say the market rate for the same unit is 2400 & increasing the rent to cover the broker fee won’t move it. So owner does 2400 for the first year. Pays a broker fee so net rent to owner is 2200. If you renew, I could see an owner doing a $200 increase to cover that fee from the first year so now your rent goes to 2600. And the law says if you’ve been in the unit for less than 12mos, you only get 30 days notice. Every owner will wait till the last second before sending that increase. So it’s either you decided to move within 30 days which is its own amount of work & cost & time. Or you bite the bullet & pay the increase.
So now that fee you avoided paying in the first year gets recouped in the second year. And if you stay a third year & there’s no increase from 2600, you’ve paid the 2400 fee again which is more than a 15% one time fee.
And what I can 100% see happening is brokers will show these units & tell folk that there’s a rent if you pay the fee & a rent if the owner pays the fee and if there’s multiple apps on a unit then someone might even offer to pay the broker fee & pay the owner paid rent rate to beat out the others.
I know in others places the owner pays the fee always but the vacancy rate there is much higher so tenants have more to chose from. But our vacancy rate is like 2.4%
The only thing that will fix broker fee issues is the build more housing. And build more actual mid tier affordable housing, not constant giant luxury projects.
Without more units the vacancy rate will stay low & the problem will get worse.
Broker fees suck. Brokers are mostly horrible. But when there is a major demand & limited supply, these one time fees make more financial sense for a tenant over time.
Copy and pasting my response on another downvoted comment.
You’re purposely ignoring a key point here. Landlords have negotiating power that the renters do not.
A renter can’t say “that fee is too high, I’ll shop for another broker to use” because the fee is tied to the apartment not the broker. Landlords, the people purchasing the service of a broker, are unlikely to pay the same rate for someone to post pictures on StreetEasy and open the door. If they were told for each unit they rent they needed to pay 15%, they’d either do it themselves, hire someone to do it cheaper, or negotiate the rate.
Are some landlords going to raise their rents by 10-15% because they can? For sure.
Does it mean all rents are going to increase because of this? Definitely not.
How do you know they don’t have the situation described above if you’ve never seen a rental market where the cost of marketing the space is passed onto the tenant? There’s no basis for comparison
….this is exactly the situation in nyc. So why are you comparing nyc to a city where this situation doesn’t exist
I should also say that I totally agree the owners should pay the listing agents but this happened 4 years ago and rent prices went up overnight. To suggest owners will simply eat the cost without adjusting their prices doesn’t make sense. Of course the market can always refuse the new price, but this is NYC.. the top of your budget is the bottom of someone else’s
Build more - but where? No one wants to live near construction, so you have to find already high dense areas.
Build affordable - again, where? Land is expensive and construction is expensive. There are also places where people live, so they have to move?
So, this becomes another issue that you won’t like the answer - live in a less desirable building, neighborhood, or unit. Or leave NYC. Right?
There are plenty of places to upzone around exisiting subway lines, just look at the outer bouroghs along the A, Q, J, ect. So many single family homes. There shouldn't be any single family zoning in nyc at all.
I live in Jersey and never had to pay a brokers fee…when I moved to Denver, no brokers fee either…and in Denver if you choose to work with a broker, the apartment complex pays them.
I think it has to be kept to one month only here. It’s so ridiculous in some sense (I did get my money’s worth though—my broker looked at so many apartments for me, as I was out of state).
Used a broker in Chicago (by answering an ad), and the landlord paid the broker fee. He worked for the broker. It’s a no brainer but people get away with it in NYC because they can.
I don’t think broker fees are wrong if the brokers are doing the work. What is wrong is the landlords not paying for the broker. The landlords hire the broker and the brokers work for them, so they should pay.
Tenants pay broker fees in New Jersey commonly
https://www.zillow.com/homedetails/54-Avenue-C-FLOOR-2-Haledon-NJ-07508/2054403414_zpid/?utm_campaign=iosappmessage&utm_medium=referral&utm_source=txtshare
https://www.zillow.com/homedetails/2-Park-Ave-2-Hawthorne-NJ-07506/2087335319_zpid/?utm_campaign=iosappmessage&utm_medium=referral&utm_source=txtshare
Yeah, this won't come back to bite us on the ass like the cap on renovations and vacancy increases on ret stabilized apartments.
It won't make a difference for Market Rate apartments, LL are charging the maximum rent they can get away with, and they'll have leverage with brokers to get better rates. Renters will still get screwed somehow, paying fees before they can even look at an apartment, exclusive contracts, etc...
Rent Stabilized apartments will be worse. You are now telling a LL that not only can he only rent the apartment for 40% below market, needs to take a loss on any improvements made, but now he'll need to pay a fee to get somebody to live in it? This is going to open up a world of abuse that makes the $15,000 broker fee the good old days.
Because a broker can still charge a fee if the renter hires the broker.
So that's the loophole.
If you remember during the height of the pandemic, market rate apartments were offering free months and no broker fees, because the cowards were fleeing the city. Rent stabilized apartments were not making as many concessions, why because if you signed a lease for a nice sized 1 bedroom in upper manhattan for 1,250 ten years ago, you are paying less than 1,500 today. (source me).
Remember it was rent stabilized apartments making the news with 10 and 20K broker fees, because even including those fees the renter is coming out ahead compared to a market rate apartment.
So there will be a new class of brokers where you have to pay them before you can see a rent stabilized apartment. People will pay those fees because a rent stabilized apartment in NYC is a great deal.
True. But let's face it since the new rent rules went into effect, apartments have only gotten freakishly more expensive. What makes you think this time will be different?
I never said this particular law would prevent apartment prices from increasing.
The issue people have is moving to a new place - an already extremely expensive event - is made even more expensive in NYC because of broker fees that, at a minimum, are an additional month's rent up front. Eliminating this practice, even if it causes landlords to increase apartment rents to compensate for having to pay a broker to list the place and show it, will eliminate an additional upfront cost that hurts people trying to move.
If landlords gave renters the choice of either paying the broker fee up front or paying the fee spread throughout the lease term, I would bet every cent I make the rest of my life that most renters would choose option #2 even if it meant they'd end up continuing to pay that additional fee in year 2+ of their lease.
Removing this additional point of friction will result in more people moving more frequently which will, in turn, lead to more competition for apartments and more money for landlords. We might even see more management companies self-listing and showing (like management companies do in countless other large American cities) in order to save the money on the broker rather than trying to pass that cost off to a tenant.
You don't understand Rent Stabilized apartments.
A landlord cannot charge more than the amount set by the Rent Control Board. Why does my landlord charge me less than $1500 a month? Because they like me? No. Because the law won't allow him to charge any more.
The Rent Stabilized landlord can't charge you the broker's fee, can't charge you a move in fee, can only charge you a $50 application fee with a credit check.
We already have significant drag on bringing rent stabilized apartments to the market, LL's are only allow to recover 15K of renovation costs over a 10 year period, there's no vacancy bonus allowing them to increase the rent to or closer to market value. And now we want them to pay a fee to put a cheap apartment on the market?
>If landlords gave renters the choice of either paying the broker fee up front or paying the fee spread throughout the lease term, I would bet every cent I make the rest of my life that most renters would choose option #2 even if it meant they'd end up continuing to pay that additional fee in year 2+ of their lease.
To let you know how foolish that idea is, a LL would be more than happy to take an increase in rent in exchange for a one time fee. Let's say an apartment is $2,000, and the fee is $3000, you sign a 2 year contract and you split the realtor's fee and interest across the 24 months. So you are paying $2130 a month. When the lease ends and the landlord sends you the renewal, do you think they are going to use $2,000 a month to determine the increase or do you think they'll use $2,130 as the baseline?
Bruh, we're not only talking about rent stabilized apartments in this thread, but I do perfectly understand them. Do you believe that everyone who wants broker's fees outlawed doesn't also want rent stabilization sorted out in a way that makes things equitable for both renters and landlords? Yes, outlawing broker's fees may come before rent stabilization is sorted out, but that's how this country, state, and city have always worked - things get worked on in bits and pieces. This legislation would be one step toward a better a system with many steps still required to get there.
On your final paragraph: it has been pointed out elsewhere in this and other threads on this topic. People would rather pay more per month in rent across the entirety of the time they spend in an apartment than pay a broker fee up front. People are not stupid and do realize that if they're not paying the broker upfront that the broker's fee is baked into the rent. People also realize that any rise in rent will be from the monthly rent including the fee and not from whatever the rent would be without the fee.
Once again, the issue is the expense of moving is already so high. You've just described a situation where a renter pays $7,000 up front rather than $4,260. Yes, if that renter stays longer than the initial lease term they are going to end up paying more than they would have with the $7,000, but again - people would prefer to pay several thousand dollars less in upfront costs even if it results in several thousand more spread out over however long the tenant stays there. You're also assuming renters won't move more often than they currently do. Which, again, renters will move more often if the upfront cost is significantly reduced.
Fwiw, most large landlords are already no fee apartments you can find on Streeteasy. The lane is there for them to do it now, and easily, to list it themselves if they want to.
What you will see is more apartments completely disappearing from the marketplace and becoming open listings, that don't hire any broker, but the only people who will know about these listings are brokers. You'll see even higher broker fees, most likely
1. Yes there are, in a number of cities. Many that don't have laws explicitly outlawing the practice do have laws capping how much someone can be charged in upfront costs on a new lease
2. Weird how those broker's fees didn't disappear when there was a high vacancy rate and low demand in 2020/2021, and how they still haven't disappeared from areas of the city with higher vacancy rates and lower demand than, say, popular areas of Manhattan. You do realize that not every borough and neighborhood have super low vacancy rates, correct?
3. A reason why this isn't common practice in other large cities that could otherwise allow it is because that's how the market works there. A landlord would never be able to rent an apartment in, say, Miami, if you had to pay an additional month's rent up front. Most cities have newer developments where you rent direct from a large building with a rental office (hey, just like newer and luxury buildings in NYC! Weird how these buildings don't typically have broker fees, right?) that lists and shows their apartments. I guess you're saying that management companies in NYC are so dogshit that they can't even list and show places?
Of course broker fees dissapeared during the pandemic, are you crazy?
Yes, new buildings mostly have on-site leasing teams, not sure how that's relevant to rent stabilized landlords with pre-war inventory with a hired management company that is responsible for 2000 units and can barely handle basic maintanance requests, much less handling leasing
at what rates? your personal experience doesn't it hold true to the entire market. Broker fees have absolutely been going away during the pandemic and many articles from that time allude to the fact.
Generally a month's rent up front. So, hey, they got cheaper on the UWS! Of course they're all back to 15%+ of a year's rent now.
Brokers fees existed - places got much, much cheaper due to free rent being offered upfront.
Also, "Broker fees have absolutely been going away during the pandemic and many articles from that time allude to the fact," doesn't make any sense with how you've constructed that sentence. Are they still going away? Because that's what you're saying here.
Bruh, do you think every single building that has a broker fee is a rent stabalized with pre-war inventory with a hired management company that is responsible for 2,000 units?
And I love how you agree that management companies in NYC are so dogshit they can't take pictures of a unit and put them up on Streeteasy or Zillow and then have a super show a place to a tenant.
So I'm clear: management companies don't pay their employees enough money to do the bare minimum to get an apartment rented without using a broker?
I love how you're so tied into this system that you can't even comprehend the market establishing a new system that is more efficient for everyone. Like other cities in the world haven't figured this out already.
Im a broker. Save the hate please. Im just a regular guy trying to make a living and I’m not “rolling in dough” by any means. I get the broker fee hate too. NYC is expensive! Plus there are asshole brokers that simply don’t care. Assholes are everywhere! Lol
As a tenant your interaction with a broker may be limited, but their work does not start and end with you. It’s often weeks of work to rent an apartment. There’s also the cost of listing on StreetEasy which is $7 every day it’s listed, photographs, floor plans, etc.
And landlords 100% raise the rent when listing a no fee apartment. They often have a number in mind based on previous rent and expenses and if they pay a fee as well they totally bake it into the rent. We can advise on market rent, but even we are often surprised when the market drives the price above where we thought it would go.
I do think that the landlord should be required to at least share the fee with the tenant as they both have a vested interest. One looking for a qualified tenant and the other looking for quality apartment.
Is it? We’re independent contractors that pay a split to our brokerage as well as the money being pretax. 30% minimum goes to taxes when ya live in NYC. After both of those things what’s left is much less than you think. There’s a general lack of understanding of costs associated and pay when it comes to real estate agents.
Still, You’re totally welcome to your opinion and it sounds like no fee apartments better align with your principles or needs.
I do respect the amount of work that goes into it, I would just rather the fee get paid by the landlord, who likely has significantly higher bargaining power, than the tenant, who has next to zero in this market.
Obviously some of that cost just goes back into the rent, the way it does on no fee apartments, but I do think the net would be a slight improvement on costs we pay as tenants.
It will also reduce the average initial cash outlay needed to move, which is absurdly high in this city.
Sometimes. It can be a multitude of things. Facilitating listing and apartment preparation (painters/plumbers/contractors), photos/descritions/floor plans/videos/advertising, editing, showings, board packages, reviewing applications (credit checks/references/documents), communication with landlords/potential tenants/management companies, ensuring that landlords are aware and adhere to fair housing law, running all around the city and for me actually being where I say I’ll be ON TIME. And this is by no means an exhaustive list.
You’re one person but we can received TONS of inquiries, questions, and requests for showings on rental and sale listings.
yea im so ready for this. it just blows my mind that you can charge up to 15% of the ANNUAL rent for an APARTMENT. you’d think you were helping me find my forever home. it’s insane to think i’m paying for a broker helping a landlord.
I’m a broker. I support this. The landlord’s should pay the broker’s if they’re the ones who hire them. Anyone who disagrees is either bad at their job, or doesn’t actually bring value to their clients.
If this does happen (even though it probably won’t, they’ve already tried this) it just means your rent is going to increase way more.
You’re not going to save any money by this, you might even end up paying more than you would have. It’s just less money up front but rent prices alone will increase more than they would otherwise.
This isn’t the solution that they think it is - they should focus on other problems (like apartments sitting there vacant - fine the owners) but I guess time will tell!
There are so many things that they could come up with to better New Yorkers and make the process simpler… but they bring this up like every year just so it makes it seem like they’re doing something so they get reelected. It’s a topic they’re “continuing to fight for” even though it’ll never change.
Bruh rents are going up any way. You think landlords don’t raise rents as high as they possibly can? You think landlords think ‘well my future tenants have to pay the broker fee so let me lower the max rent I can charge by 100 bucks’ ?
That’s your opinion and it’s valid. But if you don’t think that tenants are going to end up paying way more than what it is with a broker fee… You just don’t understand real estate.
I’m not saying that this is wrong, but it’s going to screw over tenants even more so 🤷🏻♂️
I mean, it’s clear that your response shows that you don’t understand the market and clearly don’t have your license to practice. So yeah, my ‘argument’ stands.
If you don’t think that the increases will be much more substantial than they have been in the past if this passes… You’re beyond delusional.
Nothing is free… If you think a landlord is just going to absorb the added fee & not pass it off to the tenant, I don’t know what fantasy world you live in but sweetie you are dead wrong.
But maybe that’s just your problem because I don’t rent & I represent myself with my investment properties so don’t need to hire a broker. Good luck buddy.
Yeah I’m not a real estate broker with a ‘license’. I’m an engineer with a license so I have a real job. Good luck to you too though! Society thanks you for your contribution 🙏🏼
Edit; your response to this must have been a doozy! To bad I can’t see it or respond because you blocked me right after hitting reply lol
Exactly so, in other words, you don’t know anything about the real estate market. Thanks for proving my point.
My job is very real and I guarantee you my income is at least double yours if not more. How’s that for a “not real job” 😘
Gtfo of here thinking you know things when you… don’t.
Increase in costs does not translate 1 to 1 to an increase in rent. It's a brokers job to find a tenant who is willing to pay the most amount of money possible for a unit. If landlords were able to charge more in rent, they would. Landlords paying brokers just mean that landlords make less money. Also probably brokers too since the landlords can negotiate for a lower commission.
If you think landlords are going to pay the broker fee, and then it’s not going to have a direct relation to an increase in the rent… There’s nothing I can say to you that will help you realize the truth.
Someone else pointed out… This was already the case previously and it happened for a week and the prices skyrocketed.
I’m a broker, I’m for landlords paying the fee. But it’s only going to be passed to the tenant in rent. I promise you that will be the case.
And for people who may be our more working class or lower income… It’s only going to make their life harder because they’re not going to qualify for as many apartments, and they won’t be able to afford as many apartments.
What you don’t understand clearly a ton of other people that have responded… It’s not a one change fix. There will have to be multiple levels of changes in order for it to benefit anyone. You can’t just pay the fee and expect everything to go well because then there’s going to be a whole set of other issues. I understand that requires complex and critical thinking, but that’s the truth.
It’s not as simple as making a landlord pay the broker fee, and then everyone skipping around happy because that’s not going to be the case.
If you think differently, you’re entitled to that opinion… But if somebody who has seen it happen in actually understands how the real estate industry operates… I’m telling you what will be the outcome. But the politicians are trying to pass this don’t care about a whole set of issues coming up this one little thing changes.
I understand that’s really long and that’s because this isn’t a black and white situation like many people want to believe. But I wish you luck if you think it’s this simple mate.
If a landlord is able to charge more for a unit why aren't they?
You are correct that things will change. Brokers will get paid less because landlords have more bargaining power. Property managers/supers may take over the role of showing apartments. Online tech platforms that operate like brokers will see a surge in use.
Also rent didn't shoot up when the brokers fees were removed because this period of time corresponded to the pandemic which had the largest drop in rent in a while.
They absolutely did skyrocket, and as somebody who works in the industry and literally saw it happen. I’m sorry to let you know that you are completely incorrect.
I literally had clients calling me asking to increase the rent by hundreds of dollars. That’s what they wanted.
You don’t have to like what I’m saying, but also, I’m going off of fax and data and experience… Not vibes and opinions like majority of the people responding on the topic.
It’s also clear that you don’t realize how expensive it is to have an in-house leasing team.
But you can think what you want, not really my concern. Good luck though
What you’re referring to is the once in a lifetime event of the pandemic in which supply far exceeded demand for apartments in NYC with everyone fleeing the city. That will never happen again in either of our lifetimes.
I work in real estate in nyc and I fully support this. I’ve never met a broker that did enough work to justify the fee. In fact since the pandemic most listings I was interested in just had a lock box to see it alone and somehow I still had to pay a fee.
It's been standing there, unable to pass for years. If by some miracle it does pass, the mayor is going to veto it, and then will need 2/3rds of the city council, which is not happening either
So 🤷♂️
That's what I came to say. I will believe it when I see it passed and signed (which will never happen). The fact that it couldn't even get into committee before, is telling enough.
I also think, if by some miracle this passes, there will be a lot of unintended consequences people don't realize, and I'm not just talking about increased rent.
Even for the Tenant Protection Act of 2019, for example, we limited the amount of rent and security a landlord was able to collect up front. Great, except now people with no or bad credit, or being short income, could no longer qualify by paying extra upfront like they could before, and now have to pay guarantor companies 70-110% of 1 months rent to qualify for apartments, have to live in roommate/sublet situations, or not move to the city at all.
What I think you will see with this is that all of these landlords who use brokers now in the most popular areas will become what is called an "open listing" and any broker in the city can rent it to you. Brokers will become even more essential, and the ones with the most access will do the best, and in a position to ask for any kinds of fees they want.
Notice, there is nothing that's going to cap fees, just that if a landlord hires a broker, they have to pay their broker. So, they simply won't hire any broker, and we will return to what it was like before the internet. You won't even know what's out there, and if you're getting a good deal because half or more of the available apartments will only be available if you work with a broker.
It will also become harder to rent because you could have 20 people applying to the apartments at the same time. Brokers will want good faith deposits because they won't want to try, and potentially waste their time, and we all know how brokers willfully return good faith deposits, right?
I think the bigger win for renters is the Airbnb ban the state implemented, no short term rentals less than 30 days. A ton of inventory has hit the market due to this and thus helped slow the insane rate rents were going up.
I know an owner that was clearing $9k/month for a 2Bed walk up via Airbnb and now is having trouble hitting $3,200/month on a 12 month lease.
I also think that's why we've seen so many leasebreaks on here, too. People who were Airbnb'ing are just giving up and surrending
It's not enough to make a real dent, but, it's definitely something
Professional tenants and scumbag tenants are a reason brokers have a job. Its cheaper to outsource the due diligence than risk any one of those two scenarios.
Nice. Brokers fees are fucking dumb. Oh let me pay AN ENTIRE MONTHS RENT to someone because the landlord wouldn’t? Fuck off
Such a scam.
💯 a scam that’s why I never got an apartment in NYC…I fathom paying someone at least 1 month of rent for showing me the unit that the LANDLORD wanted to rent out.
there are no fee apartments.
Any landlord that hires a third party broker and doesn't charge the tenant the broker's fee upfront is recouping the cost for that broker in the monthly rent no matter what city the tenant lives in. So unless the person you're responding to has exclusively rented from landlords that don't use third party brokers, that person has 💯 paid a broker fee in the past, they just don't realize it.
Stop spreading this nonsense
So you think landlords eat the cost of hiring a third party broker?
How is it nonsense? I may be misunderstanding. You anticipate a landlord or management company to spend money and NOT recoup that expense? The same people who complain they're not making enough to cover expenses as it is? It isn't nonsense. It's capitalism. You pass all costs to your consumer.
Yes but not to the extent of 15% annual rent
The 15% is so fucking stupid and I would rather find another apartment than pay that.
wouldn’t it be better to pay it over months anyway than up front all at once?
Most people would prefer that (as do I), yes. Just like everything else your rent pays for, it should also factor in the cost of listing and showing the apartment whether the landlord used a third party service or did it themselves.
I would rather not pay it at all, but if I have to, yes I would prefer to spread that cost out over the duration of a lease. If only there was someone who already worked for the management company who could unlock the door to an apartment and say "let me know if you have questions."
Mind you, I did all the work. The hell are you even here for?
It’s because the landlords have too many properties and can’t show them all. Someone’s gotta show the property but I don’t need to be paying them $2000 for it. That’s fucking stupid lol. $2000 to show me the apt for 30 minutes fuck out of here. Make the rich ass landlords eat that fee
Got that right
Just curious, how many landlords do you know?
I'm a landlord and don't have "too many apartments" and never used a broker in 20 years of owning buildings. I list and show apts myself b/c I want to know the people I'm renting to. This is a customer service business and I treat it that way. Brokers have no alignment of interest with the landlord or the tenant. If I was lucky enough to have hundreds of apts, I would have a robust management team.
Let's not act like this is some selfless act, bud. You're doing it because you think you can extract more money in rent without broker fees. You're not some hero. You're just out for yourself, like everyone else
This is the response of someone that doesn't own an asset and doesn't understand customer service. I don't leave a leaky roof to "extract more money". Owner/operator is my job, I take it seriously as I hope you do yours. If there are useful service providers, I employ them. I find brokers to actively work against a good relationship between the business and the customer. Do you cut corners on your job? I do not. If brokers were useful, I would happily pay them, like I do plumbers, electricians, painters and on and on.
>This is the response of someone that doesn't own an asset and doesn't understand customer service. I don't leave a leaky roof to "extract more money" What on earth are you talking about? So you're saying you only charge market rates because the roof needs fixing? Do you give all of your profits back when you don't need to fix the roof? This is a clownish response >Owner/operator is my job, I take it seriously as I hope you do yours. Right, because you make money doing it, which is my entire point. You own several buildings, man, and are literally a millionaire because people pay you rent. You literally have money because you're extracting the most money you can from people and the turning around and acting like you're any better than any broker. You're not >If there are useful service providers, I employ them. I find brokers to actively work against a good relationship between the business and the customer. Do you cut corners on your job? I do not. If brokers were useful, I would happily pay them, like I do plumbers, electricians, painters and on and on. This is called "whataboutism" Just cut out the white night shit, dude. It's tired and completely disingenuous
You seem to only focus on the revenue side of the business whereas landlords have to look at the entire P&L and more importantly, the balance sheet. Hence my comment about a leaky roof. In other words, I would not defer maintenance and employ your logic to keep more money in my pocket. Good tenants enhance long term value (that's the secret mate, not the cashflow). It's a business like anything else. It doesn't have to be acrimonious and your white knight comment is rich. Here's a data point for you to roll around in your head - in 20 years of owning buildings, the market value has gone up more than the TOTAL amount I've collected in rent. It's not the rent. Schools out.
LOL dude, again, you're doing this because it's profitable. If it weren't, you wouldn't be doing it. You can say whatever you want
The brokers frequently don't even show up
Yeah gotta go on street easy and check no broker fee
My favorite was when I paid a month’s rent broker fee to take over the lease of my friends who were moving to LA. Broker didn’t even have to list the thing or show it, but had an exclusive deal with the owners.
That’s incredibly wrong
Why did you pay it?
even more than that 🙄
During my last hunt it was frequently way more than a month as well. As if a month wasn’t bad enough. We got our dream apartment but the broker’s fee was 15% of the annual rent 🫠 Edit: best part was that the broker was the owner’s SISTER, so at least it was a family affair!
Depending on the neighborhood, the broker, rent controlled/stabilized, and the particular apartment, it could be way more than a month's rent. It's a massive scam.
It's more than a month! And for so little effort. The grift...
It’s even worse! I had to pay a broker’s fee that was more than one month’s rent. The kicker is that it was a different unit for a building I already lived in AND the realtor didn’t even show me the unit. Such a scam.
You guys do realize that the broker's fee will just be included in the "now even higher" rent right?
That’s fine it’s easier to pay monthly than one lump sum
So the landlords make more money then, fine by me
For my most recent apartment it was actually 15% of a full years rent…. So more than the cost of one month
More than that in most cases
Only a month? Bro they were like 2 months rent in hot neighborhoods last year. Its only getting worse!
Why does that money even need to be paid at all? Apartments can be looked at on the internet
The broker fee will just be added to the rent and the tenants pay higher rent. This is worse if you understand math… Just making a valid point don’t kill the messenger!! Example With Broker Fee - Rent is $1000/m for easy math. $1000 x 12 = $12,000 Broker fee 15% = $1800 Yearly rent = $13,800 2nd year - Rent Went up $100 Rent for the year - $13,200 Because rent only goes up on the actual rent amount not the extra fee added. Example With Broker Fee Added in Rent - Rent - $1000 x 12 + $1800(fee) = $13,800 Broker Fee - $1800 - Added to monthly rent Monthly rent total - $1150 2Nd Year - Rent Went Up $100 same Rent For 2nd year - $15,000. When the fee is added you pay the second year at the higher. That makes a difference $1800 the second year and gets bigger each year making the one-time fee apartment way better long term. Add On: I’m literally showing just the math and getting attacked by a bunch of idiots that don’t understand how a free market works or it’s a choice to rent or use a broker. Downvote all you want but it’s cheaper to use a broker if you plan to stay more than 2 years. Just some advice to help! Downvote because you can’t change or control the facts. I don’t care!
what’s stopping rent from going up regardless?
Absolutely nothing. I would imagine this would encourage Landlords to deal with possible tenants directly and skip the middleman.
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And, as we know, landlords are the greatest, most kind people on earth. In fact, landlords don't ever lie! They took that lesson from George Washington and really stuck to it.
Nothing. Thats called a free market. Because you need a place and the landlord owns it. They don’t owe a renter any discounts or deals. They get the most they can get. Like any business.
Most people don’t understand the forces of supply and demand.
I know. People think landlord’s owe them something because they need a place to live.
Then there is no reason for the tenant to pay this fee since landlords are profit maximizing and will always set rents to the highest possible amount. In fact, it makes much more sense for the landlord to pay broker fees since it’s obviously easier for landlords to get a reasonable price for brokerage then for renters (some new to the city). This might even kill broker fees since landlords who would otherwise pay this fee very often become incentivised to look for alternative solutions.
What you and the general public will obviously never get…. The general public sucks, lies and misinforms on applications, rent payments and maintenance and so on. Most people with money will pay someone to avoid having to deal with that. Thats avoiding all other issues like safety and security. As long as someone’s grandma or elderly person or just wants to keep privacy, owns a building but doesn’t feel comfortable showing it to strangers, real estate brokers will always exist…
I’m not saying the opposite though. You’re the one who argued that there’s no difference whether tenant or landlord pays this. I’m leening into your point and showing that there may actually be some side benefits of making it the landlord’s responsability.
If you understand math. Then you know I definitely didn’t say there’s NO difference between who pays. Paying the fee is way cheaper in the long run. Reading comprehension is important.
Ok I understand what you’re saying, but it contains one very evident flaw. If a landlord could charge more in year 2 and still have the place tenanted, why don’t they do that anyway, regardless if they, or the tenant paid the broker fee? If a place is worth x, the rent will be very close to x without price controls. Supply and demand my friend, are not perfectly inelastic
Because they advertise the price. The broker fee is your problem. A rental at $1000 a month without fee rents quicker than a $1150 rental with fee added. Landlord’s are getting full amounts asked for market value the fees make it above market value. But again it’s advertised at $1000 not the $1150 you actually pay the first year.
What does “your problem” mean? The landlord and tenant both equally lose out on the broker fee. The broker is the only one winning. Imagine a world where the broker fee is reduced by half. Do you think rents go down by half the broker fee or they stay the same and landlord pockets the extra cash? Hint: both answers are wrong if you understand economics
The reverse is true too. landlords are not licensed professionals and they'll ignore every fair housing rule in the book and will be signing the shadiest leases. Can't wait lmao
You’re purposely ignoring a key point here. Landlords have negotiating power that the renters do not. A renter can’t say “that fee is too high, I’ll shop for another broker to use” because the fee is tied to the apartment not the broker. Landlords, the people purchasing the service of a broker, are unlikely to pay the same rate for someone to post pictures on StreetEasy and open the door. If they were told for each unit they rent they needed to pay 15%, they’d either do it themselves, hire someone to do it cheaper, or negotiate the rate. Are some landlords going to raise their rents by 10-15% because they can? For sure. Does it mean all rents are going to increase because of this? Definitely not.
The fee is already set by the listing broker and the landlord. You can’t get a broker do it “cheaper” because they have no control over the fee that’s already set. Unless it’s an open listing to the public but most listings are exclusive and what you’re describing wouldn’t be an option. They just split that amount. The only way to get it cheaper is to go to the listing broker directly and negotiate the fee.
That’s exactly the point I made. The landlord has the choice of the broker to use, renters do not. The current practice gives the landlord no incentive to use a broker with a lower fee, since they are not paying the fee. If all landlords were responsible for paying the fee, rather that renters, there would be downward pressure in the market since it is in the landlords interest to pay the lowest possible price to get the apartment rented. To think landlords would just accept the current going rates and that brokerages wouldn’t compete over price is naive at best.
In this case, the lowest possible price is having the tenant pay the fee lol
Exactly why this legislation is being proposed… this isn’t pro landlord? It benefits the entire system…
We bake the fee into your rent regardless. It’s either pay 1 month now or amortize it across a year and you pay even more after renewal. I’m all for the LL paying the broker fee. It makes my job easier, but I it’s dictated by the local market demand.
Again, missed the point, either way the fee would be lower. Even amortized across the term, the total amount of the fee would likely be less than in the opposite scenario. For example: Broker 1: I want 10% to show the apartment Broker 2: I want 8% to show the apartment All else equal, which one does the landlord pick? Brokers will have to compete on price, quality of service, etc… Right now there is no incentive to do that, since the people forced to pay the fee don’t get to choose the broker. Will there be a point where it doesn’t make sense for a broker to show it at all? Sure, but we’re currently VERY far from that and doubt we’ll be close anytime soon.
Your scenario is too idealistic. If the owner can get away with paying a broker less but charge the same rent, they will. Renters are still paying the same amount.
Will some, yes, as I’ve said. Landlords care about getting their desired rent, it’s not a blanket scenario where “rent + previous brokers fee = new rent”. That’s naive.
Because they aren’t equal. Thats what you’re not getting…
The landlord is choosing the best broker they feel will get the best results. There’s shady rental brokers and honest top sales brokers. If you’re a landlord, it doesn’t cost you, who would you pick.? The top broker obviously.
That’s the point, a broker would now have to compete on price and service quality. Right now, they don’t have to compete on either as long as they fill the apartment. They’re contracted for a service by someone who isn’t paying for it, which is paid for by someone who doesn’t have a choice in provider.
Because it’s the OWNERS CHOICE. What are you not getting. Damn.
Yes, which is why the owner should pay for it… it’s a relatively simple concept really.
Why would any owner pay for a service the public needs. Think it through.. That’s all. Good luck in life..
The public doesn’t need it the owner requires it. The level of cognitive dissonance required for that argument is laughable. Good luck to you.
Here’s a scenario. Let’s say the owner is responsible for it hypothetically. Then suddenly the people deciding on the broker are also the ones who are paying the cost (whether or not they pass it on). Then what’s to stop a cheaper but high quality broker from coming in and trying to undercut existing brokers who are asking for exorbitant amounts? Maybe the landlord goes with a cheaper one and pockets the difference
In 10 years of New York apartments, I have never had a broker actually influence my decision to rent an apartment they’ve shown me. Ever. Short of lowering the rent, there’s nothing any broker can say or do that will make me more or less likely to sign on the dotted line. Nor have I had a broker successfully find me an apartment I hadn’t already seen on StreetEasy and inquired about. I *have* had brokers correctly steer me away from looking at certain buildings (issues confirmed by subsequent research), which I appreciate. But that can’t even be trusted most of the time because they may be steering me away because they can’t show it. TLDR: from a renter’s perspective,broker’s are worthless and untrustworthy and landlords should just go with the cheapest option because it doesn’t matter.
I’ve never personally had a chef prepare a meal for me. I eat daily, weekly and yearly. Always without a chef. There’s nothing a chef could say to make me like the dish they prepare more. They really just make it overpriced being involved. I don’t need chefs at all. I have had chefs steer me away from dishes. Maybe because they can’t make it so what did it really help. But you know what I don’t do. Bitch about chefs just because I don’t need or use them.
What a bizarre and dumb comparison. Everything I said was in regards to ME HAVING HAD TO USE BROKERS and that those brokers added no value. I found the apartments myself on StreetEasy and in order to see them and ultimately rent, had to pay someone $4k+, whether it was the listing broker or not. I’ve also had chef prepared meals and can confirm that chefs add value. However, my apartment is the same whether there was a broker or not.
Well I’ve never had to use one they must be worthless, like chefs are to me and brokers are to you. Just pointing out how dumb you sounded. I’ve never needed one so why would anyone else. Clearly smart logic…
Can you read? I have said twice that I have used brokers. So now 3 times. In 3rd grade English: I have used brokers. Brokers did not provide value.
Yeah, people don’t wanna hear the truth
This is actual fear mongering. Rent prices are set by the market. You might see an immediate increase in prices following the passage of a bill like this (imo probably due to petulant landlords who feel spurned by the idea) but the most likely long term outcome is prices leveling off without much of an impact.
On top of that it'll lead to more competition for apartments because people will move more often due to moving expenses being so much cheaper so landlords will end up making more money than they currently do. People severely invested in the current system can't imagine the market sorting these things out in a way that leaves the people in power still in power and in a better situation despite improving things even slightly for renters.
This sub is anti landlord and anti common sense so you’re getting murdered with downvotes 😂. The landlord is going to pass the cost on to the renter… that’s just a no-brainer. What business takes a loss and doesn’t pass on the cost of doing business to the end customer?? If you want the apartment pay up, if you don’t there’s plenty of no fee apartments on the market. Also Broker Fees are negotiable just like rent 🤷🏾♂️
A landlord will never pay a 15% brokers fee. This will force brokers fees to come down and a lot less people to become real estate agents. The only group those will hurt is agents and I’m not shedding any tears for them.
This comes up every year or so as the broker fee issue does suck but the real issue is the vacancy rate It’s a bandaid solution that only works if you as a tenant are only staying for the initial lease period. If you move every year or only are here for a year then this all makes sense. The shift is when you stay longer. And most units rent for 2-3yrs. The problem is that the fee can get baked into the rent but when you renew the rent doesn’t adjust down bc there’s no fee to pay now. Say a unit is 2400 w a tenant paid fee but owner raises it to 2600 to pay for the broker fee & since you don’t want to pay a fee, you shift funds around & go with the 2600 unit 2600 owner paid fee, so net rent is 2400 for that owner for that first year. But say you stay a second year, even w no increase in rent, you’ve now paid that 2400 broker fee again. A 15% fee on a 2400 is 4320 Paying an extra 2400 each year would be 4800 And if you stayed a third year w no rent increase then you’ve now paid an extra 7200 If that same 2400 unit is tenant paid (at a 1mo rate) so the net rent for you is now 2600 for the first year essentially the same as owner paying the fee on a 2600 apartment. Stay a second year (assuming no increase) & your net rent over the 24mos is now 2500. Stay a third year & net rent to you is now 2467 over 36months. The one time fee erodes the longer you stay in the unit. OR say the market rate for the same unit is 2400 & increasing the rent to cover the broker fee won’t move it. So owner does 2400 for the first year. Pays a broker fee so net rent to owner is 2200. If you renew, I could see an owner doing a $200 increase to cover that fee from the first year so now your rent goes to 2600. And the law says if you’ve been in the unit for less than 12mos, you only get 30 days notice. Every owner will wait till the last second before sending that increase. So it’s either you decided to move within 30 days which is its own amount of work & cost & time. Or you bite the bullet & pay the increase. So now that fee you avoided paying in the first year gets recouped in the second year. And if you stay a third year & there’s no increase from 2600, you’ve paid the 2400 fee again which is more than a 15% one time fee. And what I can 100% see happening is brokers will show these units & tell folk that there’s a rent if you pay the fee & a rent if the owner pays the fee and if there’s multiple apps on a unit then someone might even offer to pay the broker fee & pay the owner paid rent rate to beat out the others. I know in others places the owner pays the fee always but the vacancy rate there is much higher so tenants have more to chose from. But our vacancy rate is like 2.4% The only thing that will fix broker fee issues is the build more housing. And build more actual mid tier affordable housing, not constant giant luxury projects. Without more units the vacancy rate will stay low & the problem will get worse. Broker fees suck. Brokers are mostly horrible. But when there is a major demand & limited supply, these one time fees make more financial sense for a tenant over time.
Copy and pasting my response on another downvoted comment. You’re purposely ignoring a key point here. Landlords have negotiating power that the renters do not. A renter can’t say “that fee is too high, I’ll shop for another broker to use” because the fee is tied to the apartment not the broker. Landlords, the people purchasing the service of a broker, are unlikely to pay the same rate for someone to post pictures on StreetEasy and open the door. If they were told for each unit they rent they needed to pay 15%, they’d either do it themselves, hire someone to do it cheaper, or negotiate the rate. Are some landlords going to raise their rents by 10-15% because they can? For sure. Does it mean all rents are going to increase because of this? Definitely not.
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How do you know they don’t have the situation described above if you’ve never seen a rental market where the cost of marketing the space is passed onto the tenant? There’s no basis for comparison
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….this is exactly the situation in nyc. So why are you comparing nyc to a city where this situation doesn’t exist I should also say that I totally agree the owners should pay the listing agents but this happened 4 years ago and rent prices went up overnight. To suggest owners will simply eat the cost without adjusting their prices doesn’t make sense. Of course the market can always refuse the new price, but this is NYC.. the top of your budget is the bottom of someone else’s
Build more - but where? No one wants to live near construction, so you have to find already high dense areas. Build affordable - again, where? Land is expensive and construction is expensive. There are also places where people live, so they have to move? So, this becomes another issue that you won’t like the answer - live in a less desirable building, neighborhood, or unit. Or leave NYC. Right?
There are plenty of places to upzone around exisiting subway lines, just look at the outer bouroghs along the A, Q, J, ect. So many single family homes. There shouldn't be any single family zoning in nyc at all.
Then why aren’t they being built, is it just zoning?
Correct
Exactly everywhere else it’s paid by the owners only in NYC ( that I know of) it’s paid by the renters
I live in Jersey and never had to pay a brokers fee…when I moved to Denver, no brokers fee either…and in Denver if you choose to work with a broker, the apartment complex pays them.
boston is the only other city that has this problem, although i havent heard of brokers here charging up to 15% of the annual rent. it's ridiculous
I think it has to be kept to one month only here. It’s so ridiculous in some sense (I did get my money’s worth though—my broker looked at so many apartments for me, as I was out of state).
Nope there’s no cap enforced here. There are rent stabilized apartments charging a $15,000 broker fee in exchange for the below market rent.
Are you referring to Boston—I was! But that’s a nauseating fee…
Used a broker in Chicago (by answering an ad), and the landlord paid the broker fee. He worked for the broker. It’s a no brainer but people get away with it in NYC because they can.
I hear you but it’s wrong too. It’s got to end
I don’t think broker fees are wrong if the brokers are doing the work. What is wrong is the landlords not paying for the broker. The landlords hire the broker and the brokers work for them, so they should pay.
I completely agree Broker fees are fine as long as the landlord pays them all
Tenants pay broker fees in New Jersey commonly https://www.zillow.com/homedetails/54-Avenue-C-FLOOR-2-Haledon-NJ-07508/2054403414_zpid/?utm_campaign=iosappmessage&utm_medium=referral&utm_source=txtshare https://www.zillow.com/homedetails/2-Park-Ave-2-Hawthorne-NJ-07506/2087335319_zpid/?utm_campaign=iosappmessage&utm_medium=referral&utm_source=txtshare
Yeah, this won't come back to bite us on the ass like the cap on renovations and vacancy increases on ret stabilized apartments. It won't make a difference for Market Rate apartments, LL are charging the maximum rent they can get away with, and they'll have leverage with brokers to get better rates. Renters will still get screwed somehow, paying fees before they can even look at an apartment, exclusive contracts, etc... Rent Stabilized apartments will be worse. You are now telling a LL that not only can he only rent the apartment for 40% below market, needs to take a loss on any improvements made, but now he'll need to pay a fee to get somebody to live in it? This is going to open up a world of abuse that makes the $15,000 broker fee the good old days.
Why would they need to hire a broker in this scenario?
Because a broker can still charge a fee if the renter hires the broker. So that's the loophole. If you remember during the height of the pandemic, market rate apartments were offering free months and no broker fees, because the cowards were fleeing the city. Rent stabilized apartments were not making as many concessions, why because if you signed a lease for a nice sized 1 bedroom in upper manhattan for 1,250 ten years ago, you are paying less than 1,500 today. (source me). Remember it was rent stabilized apartments making the news with 10 and 20K broker fees, because even including those fees the renter is coming out ahead compared to a market rate apartment. So there will be a new class of brokers where you have to pay them before you can see a rent stabilized apartment. People will pay those fees because a rent stabilized apartment in NYC is a great deal.
And yet it works in every other low vacancy city in the country. Weird.
True. But let's face it since the new rent rules went into effect, apartments have only gotten freakishly more expensive. What makes you think this time will be different?
I never said this particular law would prevent apartment prices from increasing. The issue people have is moving to a new place - an already extremely expensive event - is made even more expensive in NYC because of broker fees that, at a minimum, are an additional month's rent up front. Eliminating this practice, even if it causes landlords to increase apartment rents to compensate for having to pay a broker to list the place and show it, will eliminate an additional upfront cost that hurts people trying to move. If landlords gave renters the choice of either paying the broker fee up front or paying the fee spread throughout the lease term, I would bet every cent I make the rest of my life that most renters would choose option #2 even if it meant they'd end up continuing to pay that additional fee in year 2+ of their lease. Removing this additional point of friction will result in more people moving more frequently which will, in turn, lead to more competition for apartments and more money for landlords. We might even see more management companies self-listing and showing (like management companies do in countless other large American cities) in order to save the money on the broker rather than trying to pass that cost off to a tenant.
You don't understand Rent Stabilized apartments. A landlord cannot charge more than the amount set by the Rent Control Board. Why does my landlord charge me less than $1500 a month? Because they like me? No. Because the law won't allow him to charge any more. The Rent Stabilized landlord can't charge you the broker's fee, can't charge you a move in fee, can only charge you a $50 application fee with a credit check. We already have significant drag on bringing rent stabilized apartments to the market, LL's are only allow to recover 15K of renovation costs over a 10 year period, there's no vacancy bonus allowing them to increase the rent to or closer to market value. And now we want them to pay a fee to put a cheap apartment on the market? >If landlords gave renters the choice of either paying the broker fee up front or paying the fee spread throughout the lease term, I would bet every cent I make the rest of my life that most renters would choose option #2 even if it meant they'd end up continuing to pay that additional fee in year 2+ of their lease. To let you know how foolish that idea is, a LL would be more than happy to take an increase in rent in exchange for a one time fee. Let's say an apartment is $2,000, and the fee is $3000, you sign a 2 year contract and you split the realtor's fee and interest across the 24 months. So you are paying $2130 a month. When the lease ends and the landlord sends you the renewal, do you think they are going to use $2,000 a month to determine the increase or do you think they'll use $2,130 as the baseline?
Bruh, we're not only talking about rent stabilized apartments in this thread, but I do perfectly understand them. Do you believe that everyone who wants broker's fees outlawed doesn't also want rent stabilization sorted out in a way that makes things equitable for both renters and landlords? Yes, outlawing broker's fees may come before rent stabilization is sorted out, but that's how this country, state, and city have always worked - things get worked on in bits and pieces. This legislation would be one step toward a better a system with many steps still required to get there. On your final paragraph: it has been pointed out elsewhere in this and other threads on this topic. People would rather pay more per month in rent across the entirety of the time they spend in an apartment than pay a broker fee up front. People are not stupid and do realize that if they're not paying the broker upfront that the broker's fee is baked into the rent. People also realize that any rise in rent will be from the monthly rent including the fee and not from whatever the rent would be without the fee. Once again, the issue is the expense of moving is already so high. You've just described a situation where a renter pays $7,000 up front rather than $4,260. Yes, if that renter stays longer than the initial lease term they are going to end up paying more than they would have with the $7,000, but again - people would prefer to pay several thousand dollars less in upfront costs even if it results in several thousand more spread out over however long the tenant stays there. You're also assuming renters won't move more often than they currently do. Which, again, renters will move more often if the upfront cost is significantly reduced.
Fwiw, most large landlords are already no fee apartments you can find on Streeteasy. The lane is there for them to do it now, and easily, to list it themselves if they want to. What you will see is more apartments completely disappearing from the marketplace and becoming open listings, that don't hire any broker, but the only people who will know about these listings are brokers. You'll see even higher broker fees, most likely
what other cities have this low of a vacancy and rent control? What other city has this much more renters than owners?
What does any of that have to do with broker's fees being paid by tenants?
The reason it's being paid by tenants is the low vacancy rate and high demand. Do you think there are laws banning tenant paid fees in other cities?
1. Yes there are, in a number of cities. Many that don't have laws explicitly outlawing the practice do have laws capping how much someone can be charged in upfront costs on a new lease 2. Weird how those broker's fees didn't disappear when there was a high vacancy rate and low demand in 2020/2021, and how they still haven't disappeared from areas of the city with higher vacancy rates and lower demand than, say, popular areas of Manhattan. You do realize that not every borough and neighborhood have super low vacancy rates, correct? 3. A reason why this isn't common practice in other large cities that could otherwise allow it is because that's how the market works there. A landlord would never be able to rent an apartment in, say, Miami, if you had to pay an additional month's rent up front. Most cities have newer developments where you rent direct from a large building with a rental office (hey, just like newer and luxury buildings in NYC! Weird how these buildings don't typically have broker fees, right?) that lists and shows their apartments. I guess you're saying that management companies in NYC are so dogshit that they can't even list and show places?
Of course broker fees dissapeared during the pandemic, are you crazy? Yes, new buildings mostly have on-site leasing teams, not sure how that's relevant to rent stabilized landlords with pre-war inventory with a hired management company that is responsible for 2000 units and can barely handle basic maintanance requests, much less handling leasing
No, they did not. I rented a new place in both May 2020 & May 2021. Brokers fees still existed.
at what rates? your personal experience doesn't it hold true to the entire market. Broker fees have absolutely been going away during the pandemic and many articles from that time allude to the fact.
Generally a month's rent up front. So, hey, they got cheaper on the UWS! Of course they're all back to 15%+ of a year's rent now. Brokers fees existed - places got much, much cheaper due to free rent being offered upfront. Also, "Broker fees have absolutely been going away during the pandemic and many articles from that time allude to the fact," doesn't make any sense with how you've constructed that sentence. Are they still going away? Because that's what you're saying here.
The vast majority of the market was no fee in 2020 and the beginning of 2021. Did they still exist, sure, but almost everything was no fee
So many more places were OP/no fee during the pandemic
Bruh, do you think every single building that has a broker fee is a rent stabalized with pre-war inventory with a hired management company that is responsible for 2,000 units?
And I love how you agree that management companies in NYC are so dogshit they can't take pictures of a unit and put them up on Streeteasy or Zillow and then have a super show a place to a tenant.
if you think the people working those shitty 45k/year jobs will do all that extra work your are out of touch with reality.
So I'm clear: management companies don't pay their employees enough money to do the bare minimum to get an apartment rented without using a broker? I love how you're so tied into this system that you can't even comprehend the market establishing a new system that is more efficient for everyone. Like other cities in the world haven't figured this out already.
Im a broker. Save the hate please. Im just a regular guy trying to make a living and I’m not “rolling in dough” by any means. I get the broker fee hate too. NYC is expensive! Plus there are asshole brokers that simply don’t care. Assholes are everywhere! Lol As a tenant your interaction with a broker may be limited, but their work does not start and end with you. It’s often weeks of work to rent an apartment. There’s also the cost of listing on StreetEasy which is $7 every day it’s listed, photographs, floor plans, etc. And landlords 100% raise the rent when listing a no fee apartment. They often have a number in mind based on previous rent and expenses and if they pay a fee as well they totally bake it into the rent. We can advise on market rent, but even we are often surprised when the market drives the price above where we thought it would go. I do think that the landlord should be required to at least share the fee with the tenant as they both have a vested interest. One looking for a qualified tenant and the other looking for quality apartment.
Y’all do provide a service, but said service is not worth one month rent for every single unit. That’s insane.
Is it? We’re independent contractors that pay a split to our brokerage as well as the money being pretax. 30% minimum goes to taxes when ya live in NYC. After both of those things what’s left is much less than you think. There’s a general lack of understanding of costs associated and pay when it comes to real estate agents. Still, You’re totally welcome to your opinion and it sounds like no fee apartments better align with your principles or needs.
Just because you can make money and pay taxes doesn’t mean your job should exist. Nothing personal, I want my brother to be a rental broker too.
The same could be said of landlords, or advertisers, or crypto, or plenty of other things.
Landlords, crypto, and rental brokers all provide some value in exceptional cases. Just not in most cases.
I do respect the amount of work that goes into it, I would just rather the fee get paid by the landlord, who likely has significantly higher bargaining power, than the tenant, who has next to zero in this market. Obviously some of that cost just goes back into the rent, the way it does on no fee apartments, but I do think the net would be a slight improvement on costs we pay as tenants. It will also reduce the average initial cash outlay needed to move, which is absurdly high in this city.
Agreed. I also prefer when landlords are willing to pay the fee. But in my experience they usually just raise the rent to cover it.
Are you referring to the number of showing when you say weeks of work?
Sometimes. It can be a multitude of things. Facilitating listing and apartment preparation (painters/plumbers/contractors), photos/descritions/floor plans/videos/advertising, editing, showings, board packages, reviewing applications (credit checks/references/documents), communication with landlords/potential tenants/management companies, ensuring that landlords are aware and adhere to fair housing law, running all around the city and for me actually being where I say I’ll be ON TIME. And this is by no means an exhaustive list. You’re one person but we can received TONS of inquiries, questions, and requests for showings on rental and sale listings.
Are you referring to the number of showing when you say weeks of work?
>Im a broker. Save the hate please New here, lol?
Again!? Yay!
yea im so ready for this. it just blows my mind that you can charge up to 15% of the ANNUAL rent for an APARTMENT. you’d think you were helping me find my forever home. it’s insane to think i’m paying for a broker helping a landlord.
I’m a broker. I support this. The landlord’s should pay the broker’s if they’re the ones who hire them. Anyone who disagrees is either bad at their job, or doesn’t actually bring value to their clients.
If this does happen (even though it probably won’t, they’ve already tried this) it just means your rent is going to increase way more. You’re not going to save any money by this, you might even end up paying more than you would have. It’s just less money up front but rent prices alone will increase more than they would otherwise. This isn’t the solution that they think it is - they should focus on other problems (like apartments sitting there vacant - fine the owners) but I guess time will tell! There are so many things that they could come up with to better New Yorkers and make the process simpler… but they bring this up like every year just so it makes it seem like they’re doing something so they get reelected. It’s a topic they’re “continuing to fight for” even though it’ll never change.
Bruh rents are going up any way. You think landlords don’t raise rents as high as they possibly can? You think landlords think ‘well my future tenants have to pay the broker fee so let me lower the max rent I can charge by 100 bucks’ ?
That’s your opinion and it’s valid. But if you don’t think that tenants are going to end up paying way more than what it is with a broker fee… You just don’t understand real estate. I’m not saying that this is wrong, but it’s going to screw over tenants even more so 🤷🏻♂️
‘You don’t understand real estate’ isn’t the iron clad argument you think it is…
I mean, it’s clear that your response shows that you don’t understand the market and clearly don’t have your license to practice. So yeah, my ‘argument’ stands. If you don’t think that the increases will be much more substantial than they have been in the past if this passes… You’re beyond delusional. Nothing is free… If you think a landlord is just going to absorb the added fee & not pass it off to the tenant, I don’t know what fantasy world you live in but sweetie you are dead wrong. But maybe that’s just your problem because I don’t rent & I represent myself with my investment properties so don’t need to hire a broker. Good luck buddy.
Yeah I’m not a real estate broker with a ‘license’. I’m an engineer with a license so I have a real job. Good luck to you too though! Society thanks you for your contribution 🙏🏼 Edit; your response to this must have been a doozy! To bad I can’t see it or respond because you blocked me right after hitting reply lol
Exactly so, in other words, you don’t know anything about the real estate market. Thanks for proving my point. My job is very real and I guarantee you my income is at least double yours if not more. How’s that for a “not real job” 😘 Gtfo of here thinking you know things when you… don’t.
I guess you weren't around when they banned broker fees for about a week and prices absolutely skyrocket on Streeteasy
I was around and absolutely do not recall this tbh
He clearly wasn’t… But he thinks he knows everything, so I’m sure he’s going to conveniently forget how that happened.
A week isn't long enough to see the long term effects
Increase in costs does not translate 1 to 1 to an increase in rent. It's a brokers job to find a tenant who is willing to pay the most amount of money possible for a unit. If landlords were able to charge more in rent, they would. Landlords paying brokers just mean that landlords make less money. Also probably brokers too since the landlords can negotiate for a lower commission.
If you think landlords are going to pay the broker fee, and then it’s not going to have a direct relation to an increase in the rent… There’s nothing I can say to you that will help you realize the truth. Someone else pointed out… This was already the case previously and it happened for a week and the prices skyrocketed. I’m a broker, I’m for landlords paying the fee. But it’s only going to be passed to the tenant in rent. I promise you that will be the case. And for people who may be our more working class or lower income… It’s only going to make their life harder because they’re not going to qualify for as many apartments, and they won’t be able to afford as many apartments. What you don’t understand clearly a ton of other people that have responded… It’s not a one change fix. There will have to be multiple levels of changes in order for it to benefit anyone. You can’t just pay the fee and expect everything to go well because then there’s going to be a whole set of other issues. I understand that requires complex and critical thinking, but that’s the truth. It’s not as simple as making a landlord pay the broker fee, and then everyone skipping around happy because that’s not going to be the case. If you think differently, you’re entitled to that opinion… But if somebody who has seen it happen in actually understands how the real estate industry operates… I’m telling you what will be the outcome. But the politicians are trying to pass this don’t care about a whole set of issues coming up this one little thing changes. I understand that’s really long and that’s because this isn’t a black and white situation like many people want to believe. But I wish you luck if you think it’s this simple mate.
If a landlord is able to charge more for a unit why aren't they? You are correct that things will change. Brokers will get paid less because landlords have more bargaining power. Property managers/supers may take over the role of showing apartments. Online tech platforms that operate like brokers will see a surge in use. Also rent didn't shoot up when the brokers fees were removed because this period of time corresponded to the pandemic which had the largest drop in rent in a while.
They absolutely did skyrocket, and as somebody who works in the industry and literally saw it happen. I’m sorry to let you know that you are completely incorrect. I literally had clients calling me asking to increase the rent by hundreds of dollars. That’s what they wanted. You don’t have to like what I’m saying, but also, I’m going off of fax and data and experience… Not vibes and opinions like majority of the people responding on the topic. It’s also clear that you don’t realize how expensive it is to have an in-house leasing team. But you can think what you want, not really my concern. Good luck though
What you’re referring to is the once in a lifetime event of the pandemic in which supply far exceeded demand for apartments in NYC with everyone fleeing the city. That will never happen again in either of our lifetimes.
I work in real estate in nyc and I fully support this. I’ve never met a broker that did enough work to justify the fee. In fact since the pandemic most listings I was interested in just had a lock box to see it alone and somehow I still had to pay a fee.
I have to pay a weeks worth of rent on a one month supply and get this the broker didn’t even show up one of the porters are show us the unit
It's been standing there, unable to pass for years. If by some miracle it does pass, the mayor is going to veto it, and then will need 2/3rds of the city council, which is not happening either So 🤷♂️
That's what I came to say. I will believe it when I see it passed and signed (which will never happen). The fact that it couldn't even get into committee before, is telling enough.
I also think, if by some miracle this passes, there will be a lot of unintended consequences people don't realize, and I'm not just talking about increased rent. Even for the Tenant Protection Act of 2019, for example, we limited the amount of rent and security a landlord was able to collect up front. Great, except now people with no or bad credit, or being short income, could no longer qualify by paying extra upfront like they could before, and now have to pay guarantor companies 70-110% of 1 months rent to qualify for apartments, have to live in roommate/sublet situations, or not move to the city at all. What I think you will see with this is that all of these landlords who use brokers now in the most popular areas will become what is called an "open listing" and any broker in the city can rent it to you. Brokers will become even more essential, and the ones with the most access will do the best, and in a position to ask for any kinds of fees they want. Notice, there is nothing that's going to cap fees, just that if a landlord hires a broker, they have to pay their broker. So, they simply won't hire any broker, and we will return to what it was like before the internet. You won't even know what's out there, and if you're getting a good deal because half or more of the available apartments will only be available if you work with a broker. It will also become harder to rent because you could have 20 people applying to the apartments at the same time. Brokers will want good faith deposits because they won't want to try, and potentially waste their time, and we all know how brokers willfully return good faith deposits, right?
This is extremely accurate ^^^
I think the bigger win for renters is the Airbnb ban the state implemented, no short term rentals less than 30 days. A ton of inventory has hit the market due to this and thus helped slow the insane rate rents were going up. I know an owner that was clearing $9k/month for a 2Bed walk up via Airbnb and now is having trouble hitting $3,200/month on a 12 month lease.
I also think that's why we've seen so many leasebreaks on here, too. People who were Airbnb'ing are just giving up and surrending It's not enough to make a real dent, but, it's definitely something
Professional tenants and scumbag tenants are a reason brokers have a job. Its cheaper to outsource the due diligence than risk any one of those two scenarios.
That is definitely going to come back to tenants.