Help me decide whether to pay a broker's fee
July 12, 2018 9:30 AM
Should my partner and I pay a broker's fee for our intra-NYC move?
Our current apartment in the outer boroughs was a no-fee rental directly from the owner with no broker. For various reasons we're looking to move (to upper Manhattan) in September. In the areas we're looking, there are a good number of no-fee apartments in our price range. But it does seem like the better apartments are those where a broker's fee is charged. Can you help me decide whether it's worth paying this fee (likely around $3,500 to $4,500)?
Part of my hesitation is that we don't have a very good track record of staying in the same apartment for very long. We'll be moving to a new neighborhood (and borough!), and I worry that we don't have enough local knowledge to pick a great long-term apartment out of the gate, and that we'll end up in a place we don't want to stay. (We had hoped to stay in our current apartment longer, but there are various things we ended up disliking so we'll be moving after only one year.) And it's also possible that our job situations will change and we'll need to move for commuting reasons. I'd feel like I were throwing away the broker's fee if we moved after only a year.
On the other hand, if we stay for a few years and it gets us a significantly nicer place, the fee seems worthwhile. But it's hard to know in advance how things will play out.
I would love any advice from more-seasoned NYC renters.
Our current apartment in the outer boroughs was a no-fee rental directly from the owner with no broker. For various reasons we're looking to move (to upper Manhattan) in September. In the areas we're looking, there are a good number of no-fee apartments in our price range. But it does seem like the better apartments are those where a broker's fee is charged. Can you help me decide whether it's worth paying this fee (likely around $3,500 to $4,500)?
Part of my hesitation is that we don't have a very good track record of staying in the same apartment for very long. We'll be moving to a new neighborhood (and borough!), and I worry that we don't have enough local knowledge to pick a great long-term apartment out of the gate, and that we'll end up in a place we don't want to stay. (We had hoped to stay in our current apartment longer, but there are various things we ended up disliking so we'll be moving after only one year.) And it's also possible that our job situations will change and we'll need to move for commuting reasons. I'd feel like I were throwing away the broker's fee if we moved after only a year.
On the other hand, if we stay for a few years and it gets us a significantly nicer place, the fee seems worthwhile. But it's hard to know in advance how things will play out.
I would love any advice from more-seasoned NYC renters.
I would look at both broker and non-broker apartments. In my experience with brokers (in Boston, not NYC) they give you *access* to some apartments, but they don't actually provide you, the renter, with any particular services. They work for the landlord even though you're the one who pays them.
posted by mskyle at 10:01 AM on July 12, 2018
posted by mskyle at 10:01 AM on July 12, 2018
Just to clarify—I don't expect a broker to point out potential problems or really be helpful in any way, except by making it possible for us to rent apartments that are exclusively available through a broker. But those seem to be the better apartments.
posted by enn at 10:02 AM on July 12, 2018
posted by enn at 10:02 AM on July 12, 2018
We paid a hefty broker's fee last time we moved. In our case, it was worth it because the place was perfect and only available if we paid the fee. Most people I know in NYC who've done this have not so much "gone through" a broker (finding a broker and asking them to provide some kind of service), it's more that a lot of the places you'll find listings for require paying a broker's fee. It's important to note that brokers don't really do anything in this case, they don't provide any special service, their services are secured by the company that owns the building and the fee is just being put onto you. It's a bit of a scam!
That being said, we knew we wanted a place that we could be content with for a few years, and the fee was worth it to us. If you're open to the idea of moving AGAIN in a year (good god, I can't imagine, moving in this city is a nightmare, I never want to move again), I would probably only look at no-fee places.
posted by cakelite at 10:04 AM on July 12, 2018
That being said, we knew we wanted a place that we could be content with for a few years, and the fee was worth it to us. If you're open to the idea of moving AGAIN in a year (good god, I can't imagine, moving in this city is a nightmare, I never want to move again), I would probably only look at no-fee places.
posted by cakelite at 10:04 AM on July 12, 2018
I think if a particular apartment is only available through a broker, you just have to look at that apartment like it's costing an extra $400 a month and decide if it's worth it just based on that. If you do end up staying longer, it's just a bonus that it was really only an extra $200 a month or less.
posted by cali59 at 10:08 AM on July 12, 2018
posted by cali59 at 10:08 AM on July 12, 2018
You need NYC-specific advice on this one. I don't know many renters in this city who, like, call up a broker on purpose. Rather, a huge percentage of the apartments in this city have one or more attached to them like a limpet. No-fee apartments tend to have the cost of showing and paperwork baked into the rent. In theory, if you don't stay long, it's better not to pay a big upfront fee. But, in practice, you rarely get to make apples-to-apples comparisons. Honestly, if you find a nicer apartment with a broker and the fee won't sink you, it's probably "worth it" (in that very special NYC sense)--if you like the apartment more, you're more likely to stay in one place!
Note: this year or so is the first time in ages that I've heard of people successfully pushing back on the size of the broker's fee. It might be worth a try, though you need to do it before you see any apartments: offer 10%, or one month's rent, instead of 15%.
posted by praemunire at 10:20 AM on July 12, 2018
Note: this year or so is the first time in ages that I've heard of people successfully pushing back on the size of the broker's fee. It might be worth a try, though you need to do it before you see any apartments: offer 10%, or one month's rent, instead of 15%.
posted by praemunire at 10:20 AM on July 12, 2018
cali59 is exactly right. When you are looking at apartments, if a broker fee is attached, you need to bake it into the cost of your rent to get an apples to apples comparison.
I think a sensible approach is to assume that that your rent will increase 3-5% annually (if its not stabilized or you're getting preferential rent) and look at what you'd pay per month, including amortizing the fee, for a 1-year, 2-year, and 3-year scenario. Then do a gut check on how long you could see yourself staying. Pick the corresponding "total" rent from your table -- and then decide whether you think it's a fair deal.
Also, sometimes apartments that are only being advertised by a broker aren't exclusive. Sometimes, if you can contact the owner or manager, you may be rent the place directly through them. I know brokers need to eat too, but its a pretty crappy system.
posted by voiceofreason at 11:06 AM on July 12, 2018
I think a sensible approach is to assume that that your rent will increase 3-5% annually (if its not stabilized or you're getting preferential rent) and look at what you'd pay per month, including amortizing the fee, for a 1-year, 2-year, and 3-year scenario. Then do a gut check on how long you could see yourself staying. Pick the corresponding "total" rent from your table -- and then decide whether you think it's a fair deal.
Also, sometimes apartments that are only being advertised by a broker aren't exclusive. Sometimes, if you can contact the owner or manager, you may be rent the place directly through them. I know brokers need to eat too, but its a pretty crappy system.
posted by voiceofreason at 11:06 AM on July 12, 2018
Broker fees are always negotiable. I lived in nyc for 15 years and have actually never heard of someone paying the full 15%. They expect you to negotiate the fee down. Make it clear you like the place and you’re ready to sign immediately for a 10% fee or whatever.
posted by sunflower16 at 12:04 AM on July 13, 2018
posted by sunflower16 at 12:04 AM on July 13, 2018
This thread is closed to new comments.
The only reason, in my opinion, to pay a broker is if the apartment you want is only available through a broker (and youve decide the added expense is worth it.
I think you may be conflating correlation and causation a bit - it may be generally true that "nicer places" go through brokers, but just because you use a broker is no guarantee of getting a place that ideally suits you (the brokers sole goal is to get you to sign a lease, irrespective of how happy you are with the place).
posted by Exceptional_Hubris at 9:57 AM on July 12, 2018