That is correct. Every apartment in the New York City market is a “No Fee” apartment. The trick is knowing who to ask, when to ask, and accepting the space and price offered. The other, lesser, trick is having the time to find the right person and the right time to ask for this apartment. It is that simple.
New York City is home to about 8.25 million people. The number of housing units and the number of housing unit owners is staggering. (I should actually have these numbers but I don’t so … I hope “staggering” will suffice. If not, let me know and I will do some research and get the specifics.) There are multi-million dollar corporations that develop, own and lease units. Then there is the mom & pop brownstone/townhouse/co-op/condo owner who leases out a unit or two. And, there is everything in between these two groups.
Brokers, Licensed Real Estate Professionals and Housing Consultants, are the middle-men between the owners and the renters, facilitating the introduction, communication/negotiation, and final agreement between the two parties. Brokers make it easier and more efficient for Landlords and Tenants to form good, working relationships.
A good Broker is invaluable: saving you time, effort and, yes, money.
Now, a few weeks ago, a couple responded to one of my advertisements for a 2 Bedroom with Hudson River Views with over 1,000 square feet in a classic pre-war West End Avenue apartment for $3000/month. The couple only wanted to see this unit, nothing else. So I showed it to them. They slowly and laboriously submitted an application because they didn’t think that I had earned my broker’s fee for this apartment because I had only showed them 1 place. But…
- It was the right place.
- For the right price.
- In the right location.
We haggled over my Broker’s Fee for far too long. I pointed out that I did more than just unlock a door. I researched the market. Found the best $3000 2 bedroom in that location to advertise. I advertised it honestly and accurately. Then, they went to my brokerage website and found the ad. And, they responded to my ad … A response that could eventaully and conceivably bridge my relationship with the owner of the apartment to them. It was more than just unlocking an apartment door — it was efficiently and professionally unlocking a home, a lifestyle, future possibilities…
Then they haggled over the price. Needless to say, 36 hours after showing them the apartment I had their application in hand but this great apartment had already been rented to someone else. They couldn’t believe it. He was angry. She was very disappointed. But … the market is what it is … and …
My point is: if you have the time, energy, industry/market expertise, and relationships — you can find your own apartment without a Broker. We aren’t indispensible, afterall. However, if you don’t have the time, energy, industry/market expertise, and relationships (and/or you just don’t want to dedicate every evening and every weekend for months on end walking the streets of NYC, searching on your own) — and you do call a Broker, please know that you are going to have to pay for that person’s time, knowledge and expertise. And with the market having limited inventory — with rental prices having adjusted — that price is going to be 15% of the annual rent (unless you are willing to work with a bargain basement agent).
Last year people received a special gift from landlords (and brokers) with no fee and lower fee apartments. It wasn’t anything personal — it was an economic anomaly — it was the market and the need to create movement in the market, to move real estate inventory. At the worst point last year the vacancy rate approached 3%, a huge number for this market, and everyone was desperate to get people moving. Rental rates dropped. Inventory was renovated. And, owners decided to pay the fee, while brokers were willing to accept 8.3333% (an amount equal to 1 month’s rent) as their broker’s fee.
But the market has changed.
So, budget the broker’s fee into your price and be prepared to find a fantastic apartment with the assistance of a Broker who possess time, energy, industry/market expertise and relationships.
Speak with you soon,