4 ms·

What kind of agent? Just a. real estate agent?

klodolph 5y ago
An apartment broker. Just like when buying a house, an apartment broker works on behalf of the landlord or the tenant. They charge a fee which is a percentage of a year’s rent. It is negotiable.
timr 5y ago
Essentially. In NYC, many real estate agents will represent the renter for a service fee, just like they represent the buyer in a purchase transaction. It supplements the income that comes from the higher-value (but much less regular) money that they get from sales. There are agencies that make most of their business in this area, and generally have better rate structures (typically a month or two of rent, flat rate). Others want to charge you on a percentage basis, which you can negotiate, and obviously changes the incentive structure. All of these are "expensive" (relative to free), but worth it depending on how you value your time. Other people are (rightly) noting that there is risk of getting a scammy real estate agent, but that's true of any service. You have to look at reviews and trust your gut. Good real estate agents are motivated to do the right thing for you, because they see it as a marketing channel into larger sales in the future. Bad real estate agents are in it only for the immediate cash. These people behave in such obviously different ways that they're pretty easy to discriminate, in practice.
- throwawayboise 5y ago
  If the agent is in any way getting compensated when you sign a lease, or as a percentage of the rent, or anything like that, they are not working for you. The only way they might be working for you is if you are paying them an hourly rate or per showing or something like that.
  - timr 5y ago
    If you're saying that the historical "broker's fee" when renting in a place like NYC doesn't benefit you, then I agree. That broker represents the landlord, not you, and you're just being charged to make up the cost. If you're saying that someone doesn't "work for you" unless you pay them a flat or hourly rate, then I disagree completely. All incentive structures have problems. Someone who works on contingency is incentivized to get you to sign. If they take a percentage cut, of course, they want you to sign the most expensive thing they can. Someone who works on a flat-rate basis is incentivized to do as little custom work as possible. Someone who works on an hourly basis is incentivized to drag out the proceedings. There is no perfect system. Most of these agreements are structured where the fee is paid by you, after signing a lease, as a function of the monthly/annual rental price. The agent works for you, you just don't pay up front or a fixed cost or on an hourly basis. Does this change the incentive structure? Yes. Does it mean that they don't provide you a benefit? No. You just have to be aware of the incentives.

An apartment broker. Just like when buying a house, an apartment broker works on behalf of the landlord or the tenant. They charge a fee which is a percentage of a year’s rent. It is negotiable.

timr 5y ago

Essentially. In NYC, many real estate agents will represent the renter for a service fee, just like they represent the buyer in a purchase transaction. It supplements the income that comes from the higher-value (but much less regular) money that they get from sales. There are agencies that make most of their business in this area, and generally have better rate structures (typically a month or two of rent, flat rate). Others want to charge you on a percentage basis, which you can negotiate, and obviously changes the incentive structure. All of these are "expensive" (relative to free), but worth it depending on how you value your time. Other people are (rightly) noting that there is risk of getting a scammy real estate agent, but that's true of any service. You have to look at reviews and trust your gut. Good real estate agents are motivated to do the right thing for you, because they see it as a marketing channel into larger sales in the future. Bad real estate agents are in it only for the immediate cash. These people behave in such obviously different ways that they're pretty easy to discriminate, in practice.

throwawayboise 5y ago
If the agent is in any way getting compensated when you sign a lease, or as a percentage of the rent, or anything like that, they are not working for you. The only way they might be working for you is if you are paying them an hourly rate or per showing or something like that.
- timr 5y ago
  If you're saying that the historical "broker's fee" when renting in a place like NYC doesn't benefit you, then I agree. That broker represents the landlord, not you, and you're just being charged to make up the cost. If you're saying that someone doesn't "work for you" unless you pay them a flat or hourly rate, then I disagree completely. All incentive structures have problems. Someone who works on contingency is incentivized to get you to sign. If they take a percentage cut, of course, they want you to sign the most expensive thing they can. Someone who works on a flat-rate basis is incentivized to do as little custom work as possible. Someone who works on an hourly basis is incentivized to drag out the proceedings. There is no perfect system. Most of these agreements are structured where the fee is paid by you, after signing a lease, as a function of the monthly/annual rental price. The agent works for you, you just don't pay up front or a fixed cost or on an hourly basis. Does this change the incentive structure? Yes. Does it mean that they don't provide you a benefit? No. You just have to be aware of the incentives.