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A broker’s fee for an apartment? I’ve never seen that. I own a house now, but when I used to rent, the process was to visit the websites of local well known man

A broker’s fee for an apartment? I’ve never seen that. I own a house now, but when I used to rent, the process was to visit the websites of local well known management companies, pick a few apartments you like, and have the manager show each to you. Then you pick one and apply. Why are people injecting the expense of a broker into such a simple transaction? And the renters are the ones paying?

_fat_santa 3y ago
I think broker fees are only a thing in NYC. So far I've rented in Atlanta and Denver and in both cases you can just contact the property, arrange a rental and sign the paperwork and boom you got the keys.
- post- 3y ago
  They're also a thing in Boston and a few other areas in the US. It's blatantly exploitative, to say nothing of the obvious corruption pointed out in other comments. There was supposed to be a crackdown on the practice in NYC in 2020, but the brokers lobby was too powerful.[0] One can only hope that such legislation eventually passes -- and has teeth. [0]: https://www.nytimes.com/2021/05/27/nyregion/broker-fees-real-estate.html https://www.nytimes.com/2021/05/27/nyregion/broker-fees-real...
jurassic 3y ago
It’s basically impossible to rent a place worth living in Boston without paying a broker fee. Even the listings you find yourself on craigslist won’t rent to you unless you pony up the fee. When I rented a place in Cambridge in 2019, the rent was $3200/month. To get the lease signed I had to write a check for 4x that amount (first+last+security deposit+broker fee). $12,800 before even dealing with any moving costs. The worst thing about it is that it increases the cost of moving very significantly. So people are coerced into accepting large rent increases as long as the increase is less than forking out another broker fee to move to a cheaper apartment.
alexambarch 3y ago
Brokers fees for the apartment in Cambridge I rent were $4k. This was in addition to first and last months’ rent. Extremely annoying but when every other apartment is doing it too, you don’t have much of a choice if you want to live in the area.
jrockway 3y ago
So if you're renting an apartment, you need someone to advertise that it's available, you need someone to pick up the phone and answer questions about it, and you need someone to unlock it and show it to prospective tenants. In many cities, the landlord pays this person and passes the cost on to you in monthly rent. In NYC, the tenant that rents the apartment pays these fees up front. It's kind of like the airlines, you sort by price ascending, pick the cheapest flight, and then are outraged when they charge you a non-middle-seat fee, a carry-on fee, an I-didn't-print-my-boarding-pass-at-home fee, etc. People search for apartments in the same way, so it makes sense that the market would remove anything other than the monthly carrying cost from the listed price. In the end, I'm not sure it's that bad. I moved to NYC in early 2012. I found a rent-stabilized apartment with the help of a broker, and paid about $600 less per month than a market rate apartment. I paid $3000 to my broker, and conservatively saved about $79,200 over the lifetime of the apartment lease relative to equivalent market-rate apartments.
btbuildem 3y ago
There's something about America that fosters the existence of parasitic middlemen. The story usually begins with a promise of some service or convenience, then reveals itself to just exploit information assymmetry or regulatory capture.
- Ferret7446 3y ago
  Maybe that something is regulations on renting? You can try to control the free market, but the free market (a.k.a. reality) will always exert itself, whether through loopholes or the black market if need be.
notyourwork 3y ago
That was my experience for multiple apartments in both Seattle and San Francisco. Never living in NYC but if I had to move there, would try same approach.

_fat_santa 3y ago

I think broker fees are only a thing in NYC. So far I've rented in Atlanta and Denver and in both cases you can just contact the property, arrange a rental and sign the paperwork and boom you got the keys.

post- 3y ago
They're also a thing in Boston and a few other areas in the US. It's blatantly exploitative, to say nothing of the obvious corruption pointed out in other comments. There was supposed to be a crackdown on the practice in NYC in 2020, but the brokers lobby was too powerful.[0] One can only hope that such legislation eventually passes -- and has teeth. [0]: https://www.nytimes.com/2021/05/27/nyregion/broker-fees-real-estate.html https://www.nytimes.com/2021/05/27/nyregion/broker-fees-real...

jurassic 3y ago

It’s basically impossible to rent a place worth living in Boston without paying a broker fee. Even the listings you find yourself on craigslist won’t rent to you unless you pony up the fee. When I rented a place in Cambridge in 2019, the rent was $3200/month. To get the lease signed I had to write a check for 4x that amount (first+last+security deposit+broker fee). $12,800 before even dealing with any moving costs. The worst thing about it is that it increases the cost of moving very significantly. So people are coerced into accepting large rent increases as long as the increase is less than forking out another broker fee to move to a cheaper apartment.

alexambarch 3y ago

Brokers fees for the apartment in Cambridge I rent were $4k. This was in addition to first and last months’ rent. Extremely annoying but when every other apartment is doing it too, you don’t have much of a choice if you want to live in the area.

jrockway 3y ago

So if you're renting an apartment, you need someone to advertise that it's available, you need someone to pick up the phone and answer questions about it, and you need someone to unlock it and show it to prospective tenants. In many cities, the landlord pays this person and passes the cost on to you in monthly rent. In NYC, the tenant that rents the apartment pays these fees up front. It's kind of like the airlines, you sort by price ascending, pick the cheapest flight, and then are outraged when they charge you a non-middle-seat fee, a carry-on fee, an I-didn't-print-my-boarding-pass-at-home fee, etc. People search for apartments in the same way, so it makes sense that the market would remove anything other than the monthly carrying cost from the listed price. In the end, I'm not sure it's that bad. I moved to NYC in early 2012. I found a rent-stabilized apartment with the help of a broker, and paid about $600 less per month than a market rate apartment. I paid $3000 to my broker, and conservatively saved about $79,200 over the lifetime of the apartment lease relative to equivalent market-rate apartments.

btbuildem 3y ago

There's something about America that fosters the existence of parasitic middlemen. The story usually begins with a promise of some service or convenience, then reveals itself to just exploit information assymmetry or regulatory capture.

Ferret7446 3y ago
Maybe that something is regulations on renting? You can try to control the free market, but the free market (a.k.a. reality) will always exert itself, whether through loopholes or the black market if need be.

notyourwork 3y ago

That was my experience for multiple apartments in both Seattle and San Francisco. Never living in NYC but if I had to move there, would try same approach.