Here’s Everything You Need To Know About Apartment Brokers And Their Fees
So, you’ve found the perfect apartment for the perfect price in the perfect location. You’re ready to make the move and reach out to the landlord, but then you realize… a broker is involved. What does that mean? What are the extra costs? Is an apartment with a broker worth it? Before you commit to any lease, know what you’re getting into with apartment brokers.
So, what exactly is a broker?
A broker is essentially the middleman between you and whoever owns the property you’re trying to rent from (a landlord or a management company). Your landlord or management company chooses to employ a broker as part of the renting process. For the property owner, a broker takes care of the grunt work — finding and vetting tenants. The broker takes the place of the property owner in that he or she is who you talk to, who analyzes your personal and financial information, and who shows you around the apartment. You’ll be talked through the lease and other fine print by the broker, not the property owner.
What does a broker do for me that I couldn’t just get working directly with a property owner?
A big bonus in working with a broker is that he or she can show you different apartments owned by other management companies and landlords. You’ll be exposed to a variety of properties without having to schedule a million separate appointments. Lastly, you won’t necessarily have the stress of competing endlessly for apartments you like. Brokers often have exclusive apartment listings that other companies can’t share, and they will typically be forthcoming about whether another client of theirs is interested in applying for the same unit you like.
What’s the cost?
Sometimes, brokers don’t charge you any fee for using their service, though the landlord is likely paying them since this is how brokers make their money. Other times, there will be a fee that you have to pay, and these fees vary. Most of the time, brokers charge a certain percentage of your full year’s rent. The fee also depends on your area. For example, the typical fee for Manhattan, New York, is 15 percent of a full year’s rent, which can be really steep. You can try to negotiate a lower broker fee — some offer a student or referral rate of 12 percent — and it’s possible that the broker can lower the rent at the very least, even if their fee isn’t reduced. If your rent is lower than average, you might find that the fee is worth it.
Here’s how to know if a broker is legit (because there are scammers out there):
You’re likely using websites to find apartments, so keep a critical eye on brokers who don’t seem legit. There are fake brokers out there whose listings appear on even credible websites. Don’t know who’s the real deal? The broker should be connected with a real estate company with a legitimate address and phone number. A real broker never makes only verbal promises — everything is in writing. Most of all, a real broker will never ask you for cash payments or money upfront without processing any paperwork. If you’re really not sure, call up the real estate company or pay them a physical visit. When you meet with your broker in person, ask to see his or her real estate license, otherwise known as a “pocket card.” Match the pocket card with the broker’s license or photo ID. It’s your money and personal information on the line here, so check your broker out before giving him or her anything.