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NY Real Estate Brokers: Do I Need to Use One?
There's no shortage of licensed NY real estate brokers in this town—well over 27,000 in fact, by one recent count--many of whom are good at their job, most of whom would be more than happy to help you find a rental apartment (there are those who specialize in sales only, or only "dabble" in rentals). For a not insubstantial fee, of course.
So if you're in the market for an apartment for rent, and thinking of hiring a broker to help in your search, the question to ask yourself is this: is a NY real estate broker's help worth the money for you?
Finding a NYC Apartment With a Broker
One of the primary functions of a NY real estate broker is to understand your requirements and desires for your new home—including, but not limited to, apartment size, number of bedrooms, your rental budget, building & unit amenities, your preferred neighborhoods and, often, a more specific location within those communities (on the street, rather than the avenue, for example)--then to show you apartments that seem to meet your needs.
Basically, a good broker will call you with news of an apartment that satisfies your criteria, meet you in front of the building, unlock the door, and, if you like the place, help you get all the paperwork done to sign a lease. If you don't rent the apartment, they will continue to search, and call you every time they find something else on the market for you to look at.
This sort of NY real estate broker service can be very helpful for people who don't have time to get on the internet and explore the rental apartment listings on sites like Urban Edge, or if they are new to the city or moving here for the first time, and are not sure where to start looking (hint: see the Urban Edge Neighborhood Guide).
Sounds Good, What's the Catch?
What people often find, however, is that if you don't rent one of the apartments they show you the first time, the broker will drop you and move on to the next person who calls. Many rental brokers take the approach of showing apartments to as many people as possible, rather than working diligently with a small number of clients. To them, it's a numbers game, and eventually one of them will sign a lease on an apartment they showed.
Because of this need to get the phone to ring, and show apartments to as many people as possible, brokers who are playing the numbers game will put up listings of apartments that look great but have already rented... or that never existed in the first place. Especially if the price seems too good to be true.
You'll call, and they'll set up an appointment to see the apartment. Then when you meet, they'll tell you that apartment "just rented" but they have something else to show you... usually not as nice as the apartment you called about, and/or more expensive. Or, the "no fee" apartment you called about, after they show it to you and you want it, suddenly becomes a "fee" apartment because the landlord "changed his mind about paying the fee for you," or someone other excuse. This is called "bait and switch," and although illegal, it unfortunately happens.
There are good, honest brokers out there. Not all of them are playing a numbers game. Unfortunately, there are also a lot of "bad apples" that are all too familiar to veteran NYC apartment hunters. Our recommendation if you decide to use a broker: only deal with those that seem interested in helping you find an apartment, and stick with them.
The Other Catch: How Much is a Brokers Fee?
NYC real estate brokers who specialize in rental apartments generally charge between 8.5% and 17% of the annual rent (the fees tend to be higher in Manhattan; less in the outer boroughs and in New Jersey), so hiring a broker to do your research can easily cost you several thousand dollars. For example, the broker's fee for a typical Manhattan apartment that costs $1500/month is $2700!
Really... do the math: $1500 x 12 months x .15 (15%, in this case) = $2700. Even at the low end, a brokers fee is rarely less than the equivalent of one month's rent. In most of Manhattan, the fee is rarely less than 15%.
If you're really busy, and you don't feel you have the time to do all the research, then find a good broker and pay the fee. You're paying for a service, and if you can afford it and you find a good broker, then it may be worth it to you.
It's true that you can find a so-called no fee NY apartment through a broker, but be careful: this just means that broker is collecting his or her fee from the landlord, and the landlord is probably passing that cost down to you through higher rent, or a reluctance to negotiate. We have a page in our Renter's Guide that explains no fee apartments in more detail.
It's also true that some landlords still give exclusive listing rights for certain apartments to brokers, but that once-common practice is becoming more and more rare. However, in some cases, the perfect apartment for you may only be available through a broker, and by having to pay a fee. If you think you will be living there for several years, and you can't find anything else close to it, then it may be your only option.
Finding a No Fee Apartment On Your Own
If you'd rather not pay thousands of dollars to a broker to help you find a rental apartment, here's the good news: with a little effort—browsing the listings, researching neighborhoods, making a couple of calls--most people can easily find plenty of great apartments that match their criteria from which to choose.
For example, all of the NY apartments here on Urban Edge are listed directly by the landlords or their property and leasing managers, and so there is no brokers fee. All you have to do is enter your requirements on the Urban Edge Listings Page, and start looking! Check out our Apartment Guide which contains everything you need to know to find an apartment in NYC--without using a broker.