Finding an apartment for rent can seem simple at first. However, if you have specific preferences like location, apartment size, amenities, and other things can get a tad bit difficult. This is when the services of a real estate broker can come like a boon. In the popular metro cities of the US, especially in a crowded destination like New York, hunting the right apartment for rent, especially for a family, can seem like a never-ending journey.
Here are some of the benefits of relying on real estate brokers
- Real estate agents or brokers can help find the right type of property for your family.
- They help connect tenants with the right type of homeowners
- They help understand the nuances of the property including the pros and cons of the locality
- Real estate agents can help suggest the best alternatives if an apartment doesn’t fit your budget.
- In the end, the broker can also help finalize the deal and also help better negotiate the rent.
For all the services that the brokers offer, they charge a sum of money, and that is the broker fee. This comes in the form of two components depending on who approaches the broker.
Some brokers work on the tenant’s side and those that work for the homeowners. In both cases, the tenant might be in a position to bear some portion of the fee, depending on how the landlord fixes the rent.
Paying the broker fee when you hire a broker
When you hire a broker, then the fee you pay would be the direct cost that adds up to your rent and security deposit budget. The price that the broker fixes might be somewhere below 15% of the value of the annual rent. Any amount higher than this would be exorbitant and not a legal sum to collect. When you hire the broker from your end, the fee is an evident expense, and therefore it is a planned portion of the budget.
Paying the broker fee when you do not hire a broker
Sometimes you might find yourself in a position to pay the broker fee even when it is the landlord that hired the broker. Especially when you look for an apartment in New York, you might often find yourself facing landlords who ask you to pay the broker fee. While in most other parts of the US, the landlord might pay the broker fee, in New York, it is the tenant that pays this fee most of the time. You might have spent days finding the right place and finally stumbled upon the said property, but still, you would have to pay the broker fee. Ideally, this expense would be unfair on the tenant’s part. However, it would be a wise decision to plan for this unplanned expense right when you start hunting for a house.
Sometimes proof of broker homeowner agreement is not required
The situation of the tenant having to pay the broker fee mostly pops up when the landlord makes use of the fact that even oral agreement between the broker and homeowner would be sufficient. There need not be any legal paper that talks about the agreement on the broker fee between the landlord and broker.
Paying the broker fee is better than multiplying the expenses
Most of the tenants in New York who have prior experience in paying broker fees would recommend paying the broker fee without any dispute. If you try and avoid broker fees, some of the owners might simply add the cost to the rent component. Given that you would be paying the rent every month, you would end up paying a higher amount in the long run than the actual broker fee. Compare the rents of similar properties in the same locality to understand whether the landlord has added the broker fee indirectly in the rent itself. In that case, it would be better to let go of the property and find a similar one instead and then pay the broker fee besides the rent.
What are your other options?
Look for a no-fee property
There are some no-fee properties available as well. These are where the landlord clearly states that the rent comes without any hidden costs and that the landlord himself would pay the broker fee. As a tenant, you would only be paying the rent.
Hire a broker from your side
You can also hire a broker to help you with the house hunting venture. The landlord might even have a broker at his side. In such situations, your broker would be able to strike a better deal and negotiate to bring a component that justifies the expenses without unreasonably increasing the rent.
How to pick the right broker
Knowing how to choose the broker is as essential as understanding the broker fee.
- To begin with, finding the right source to select brokers. You can work with multiple real estate firms online and gather contacts from the sites. However, make sure that you do enough research about the broker you choose.
- A better option would be to ask for references. You could find broker recommendations from your friends and families for a more reliable option.
- Always know the broker’s experience and the kind of clients he has worked with to get a clear picture of whom you would be communicating with. This will also be another factor that helps build your trust.
Depending on all these decision-making criteria, you can then compare and pick a broker whose fee fits your budget. After you have made your decision about the broker services to choose and the broker fee to pay, make sure that you compare all the properties with caution.
Ask your landlord all the right questions when you rent an apartment. This makes sure that you and the landlord are on the same page when it comes to finalizing the lease terms. This helps avoid future hassles while residing in the property.