On an almost daily basis, I receive at least one email asking me about the differences between brokers, online data base services like RentDirect.com, listing services, online bulletin boards like Craig’s List, & books like Nouveau Native’s No Fee New York. Some people ask very politely to advise them as to my opinion on the best way that they can find an affordable apartment. Others send notes like, “how the hell can an agent justify 15% fees for 15 minutes of work”. So this week, I’m going to break down the various options available to renters in Manhattan and the pros and cons of each. I hope that it helps.
Let’s start with licensed Real Estate Professionals:
Licensed Brokers/Real Estate Agents – In order to be a licensed real estate agent in NY (and you MUST have a license to practice) an agent must attend an accredited real estate school and attend 45 hours of State approved real estate classes. They must then pass a background check. This check includes finger printing and immigration checks and precludes people with felony convictions or un-discharged bankruptcies from pursuing a real estate career. After the checks and classes are complete, the prospective agent must pass a state license exam. These exams are considered extremely difficult.
The agent must then be sponsored by a broker who themselves have had to prove their expertise by both providing completed sale figures, an additional 90 hours of education, and another state exam. So, the idea that “anybody” can just show up and sell or rent out an apartment is a real fallacy.
Since we are discussing the rental market, I will explain the real estate agent’s job, from a renter’s prospective. The idea that a rental agent makes 15% of the annual rent for 15 minutes work is a huge misconception. In the same way that a doctor may only spend 15 minutes with you in an office appointment, but that doesn’t negate the education, training, research, time, and personal commitment to becoming a doctor that he/she dedicated prior to you walking into the exam room.
Successful real estate agents are those that spend a tremendous amount of time getting to know the management companies and landlords, their application procedures, preferred renters, maintenance style, and the types of buildings and apartments that they own and operate. A successful agent will be familiar with the people that make decisions in the landlord’s office and what issues derail applications. They will know which companies pride themselves on maintenance and which simply leave those issues up to the individual super or even the tenant. New York City is a very competitive city and the rental market is a perfect illustration. Availabilities change not only daily, but hourly. A successful agent has to stay on top of what is available and if possible, what will be available soon.
You should also understand that rental agents work on a commission only basis. That means that if they don’t produce results (get people into apartments) they don’t earn. This pretty quickly separates the wheat from the chaff, as the saying goes. It also gives them the task of staying in touch with dozens and maybe hundreds of management companies and landlords, continually updating their inventory, and finding and then servicing clients. Since real estate agents are paid on a commission only basis, they simply don’t have the time for a lot of messing around. They want to get a financially qualified person who is serious about renting immediately into their office and into an apartment quickly.
When I started out as an agent, over a decade ago, I quickly discovered just how many people are out there who waste your time. Some people simply don’t wish to deal with the realities of renting in Manhattan. I met people who had no money….I mean AT ALL. I met people who had no job or had a job that paid so little, they simply wouldn’t qualify for an apartment. I met people with bad credit, several who were being evicted for not paying their current landlord. The one thing that all of these people had in common however was the belief that somehow I held in my hand the ability to smooth over their problems. I was asked to falsify credit reports, write fake job letters, and even loan people money. My refusal to do any of these things meant that “I” personally was the reason that they were unable to rent.
I also met quite a few people who were “just looking,” some because they thought that they might want to move in another 6 months or year and wanted to get an idea of what was out there and some who simply wanted to see how “the other half lives.” For someone who works on commission, both these groups are problematic. You don’t want to completely alienate someone who may rent from you in six months. But by the same token, you can’t afford to spend your day acting like an apartment tour guide.
The most frustrating aspect however is that even when you find a client who is ready, willing, and able to rent from you, that client is most likely working with other agents as well. So a good rental agent has to figure out exactly what a client wants in an apartment and if at all possible, show them that perfect apartment before any other agent does. This gives rise to the idea that the agent spends “15 minutes” on a client. In fact, a successful agent has researched their current and upcoming inventory, weeded out all of the units that won’t appeal due to size, pet requirements, location, amenities, landlord requirements, etc etc and come up with two or three units that tick all the boxes or at least as many as possible. They then show those two or three units.
PROS:
1. An agent often has access to units that the average renter simply doesn’t have. This may mean units that are not yet available or units available through investors or small landlords that don’t advertise.
Let’s start with licensed Real Estate Professionals:
Licensed Brokers/Real Estate Agents – In order to be a licensed real estate agent in NY (and you MUST have a license to practice) an agent must attend an accredited real estate school and attend 45 hours of State approved real estate classes. They must then pass a background check. This check includes finger printing and immigration checks and precludes people with felony convictions or un-discharged bankruptcies from pursuing a real estate career. After the checks and classes are complete, the prospective agent must pass a state license exam. These exams are considered extremely difficult.
The agent must then be sponsored by a broker who themselves have had to prove their expertise by both providing completed sale figures, an additional 90 hours of education, and another state exam. So, the idea that “anybody” can just show up and sell or rent out an apartment is a real fallacy.
Since we are discussing the rental market, I will explain the real estate agent’s job, from a renter’s prospective. The idea that a rental agent makes 15% of the annual rent for 15 minutes work is a huge misconception. In the same way that a doctor may only spend 15 minutes with you in an office appointment, but that doesn’t negate the education, training, research, time, and personal commitment to becoming a doctor that he/she dedicated prior to you walking into the exam room.
Successful real estate agents are those that spend a tremendous amount of time getting to know the management companies and landlords, their application procedures, preferred renters, maintenance style, and the types of buildings and apartments that they own and operate. A successful agent will be familiar with the people that make decisions in the landlord’s office and what issues derail applications. They will know which companies pride themselves on maintenance and which simply leave those issues up to the individual super or even the tenant. New York City is a very competitive city and the rental market is a perfect illustration. Availabilities change not only daily, but hourly. A successful agent has to stay on top of what is available and if possible, what will be available soon.
You should also understand that rental agents work on a commission only basis. That means that if they don’t produce results (get people into apartments) they don’t earn. This pretty quickly separates the wheat from the chaff, as the saying goes. It also gives them the task of staying in touch with dozens and maybe hundreds of management companies and landlords, continually updating their inventory, and finding and then servicing clients. Since real estate agents are paid on a commission only basis, they simply don’t have the time for a lot of messing around. They want to get a financially qualified person who is serious about renting immediately into their office and into an apartment quickly.
When I started out as an agent, over a decade ago, I quickly discovered just how many people are out there who waste your time. Some people simply don’t wish to deal with the realities of renting in Manhattan. I met people who had no money….I mean AT ALL. I met people who had no job or had a job that paid so little, they simply wouldn’t qualify for an apartment. I met people with bad credit, several who were being evicted for not paying their current landlord. The one thing that all of these people had in common however was the belief that somehow I held in my hand the ability to smooth over their problems. I was asked to falsify credit reports, write fake job letters, and even loan people money. My refusal to do any of these things meant that “I” personally was the reason that they were unable to rent.
I also met quite a few people who were “just looking,” some because they thought that they might want to move in another 6 months or year and wanted to get an idea of what was out there and some who simply wanted to see how “the other half lives.” For someone who works on commission, both these groups are problematic. You don’t want to completely alienate someone who may rent from you in six months. But by the same token, you can’t afford to spend your day acting like an apartment tour guide.
The most frustrating aspect however is that even when you find a client who is ready, willing, and able to rent from you, that client is most likely working with other agents as well. So a good rental agent has to figure out exactly what a client wants in an apartment and if at all possible, show them that perfect apartment before any other agent does. This gives rise to the idea that the agent spends “15 minutes” on a client. In fact, a successful agent has researched their current and upcoming inventory, weeded out all of the units that won’t appeal due to size, pet requirements, location, amenities, landlord requirements, etc etc and come up with two or three units that tick all the boxes or at least as many as possible. They then show those two or three units.
PROS:
1. An agent often has access to units that the average renter simply doesn’t have. This may mean units that are not yet available or units available through investors or small landlords that don’t advertise.
2. A good agent has the experience to weed out management companies that aren’t gong to accept you due to credit or financial limitations.
3. A good agent will be familiar with the buildings and be able to eliminate buildings and units that wouldn’t meet your requirements.
4. Some landlords will only work with agents and even then, only with agents that they know and with whom they have built a relationship.
5. A successful agent will work for a broker who has a dedicated listings department. That means that available units are updated throughout the day.
6. Agents don’t waste their time going to units that already have successful applications on them.
3. A good agent will be familiar with the buildings and be able to eliminate buildings and units that wouldn’t meet your requirements.
4. Some landlords will only work with agents and even then, only with agents that they know and with whom they have built a relationship.
5. A successful agent will work for a broker who has a dedicated listings department. That means that available units are updated throughout the day.
6. Agents don’t waste their time going to units that already have successful applications on them.
If you live far away, a rental agent can be a life saver. Many people only have a few days to look for an apartment thanks to their location. They may fly into the city for a few days and simply can’t spend their time hitting the pavement. By showing you only the few units that meet your needs and handling the application process, you can find an apartment very quickly.
CONS:
1. Most real estate agents charge between one month and 15% of the annual rent as their fee. This can mean that you need to come up with nearly four months rent (between deposit, first month rent, and fee) just to move in. However, some agents will negotiate the fee with you, though this will depend on the policy of the brokerage rather than the particular agent.
2. Most agents will only work with people who are ready to move within the next 15 days. Landlords will not hold apartments open for you. An empty unit is one that is costing the landlord money, so they want to achieve as close to 0% vacancy rate as possible.
3. Agent’s can seem rude, pushy, or abrupt. This is simply the reality of dealing with people who work in a fiercely competitive industry, where time is money, and situations change in a second.
4. If you don’t have a referral name, you can get stuck with the low man/woman on the totem pole. If you call a rental office and know who you want to speak with (someone who a friend has recommended perhaps) then you get that person. But if you don’t have a specific person that you want to deal with, either the first person to answer the “pool” phone (one that rings on all desks) gets you as a client or the next person in the on the list gets you as a client. Since experienced agents are generally in the field showing units, you may well get the new agents who are still building up there contacts. While everyone has to start somewhere and many new agents are perfectly fine, your ability to get the best service can be compromised by their lack of experience.
5. Agent’s can show units that would be available to you without a fee, if you had found it on your own through some other source. You will still be required to pay the fee however since they “found” the unit.
WHAT TO CONSIDER:
1. Working with established companies can be extremely helpful because they often have strict hiring policies and they will have a well established listings department insuring that you have access to the latest units. However, they are less likely to negotiate the fee with you.
2. Smaller or less established companies will be more willing to negotiate fees with you. However, they often have fewer exclusive or broker only listings and may rely heavily on the same sources that you could use (listings services, newspapers, and the Nouveau Native’s No Fee New York).
3. If you aren’t ready to move or are just “thinking about it”, go to open houses or onsite rental offices. It is unfair to force people to give up their time and ability to earn money, simply because you might someday move.
4. You must move quickly. Apartments go in minutes and available units change hour by hour. You simply don’t have the time to “think about it” in the same way that you do if you were purchasing.
5. Even though you are working with an agent, you will still be responsible for application fees and credit checks fees with the landlord or management company.
6. Make sure that you are working with a licensed real estate agent. Agents are required to carry an id card that shows that they are in fact licensed. While agents can and do loose their cards, there is no reason for them not to have a Xerox copy since the brokerage has to maintain a copy of the license too. Most of the scams perpetrated by “real estate agents” are in fact committed by people who are simply pretending to be agents.
7. I can think of only one landlord in the City that accepts personal checks for deposits and the first month rent and I can’t think of any real estate agency that accepts personal checks for their fees. You need to be aware that you will need to produce certified checks or money orders for your first month rent, security, and fee. You can also pay by bank transfer. Some companies will accept credit card payments, but thanks to charge backs and people attempting to reverse charges once they move in, many don’t. And yes, everyone accepts cash. But it is risky to walk around Manhattan with thousands in cash on you. I had a client years ago that was robbed in broad daylight when she left the bank on the way to the lease signing. She had taken out a loan to cover the deposit, first month, and fees and lost both the money and the apartment thanks to the robbery.
8. Lease signings take place in the landlord’s office or the real estate broker’s office. NOT on the corner. NOT at a coffee shop. NOT at the bank when you hand over cash. People get so excited about getting their apartment that they often lose all common sense.
CONS:
1. Most real estate agents charge between one month and 15% of the annual rent as their fee. This can mean that you need to come up with nearly four months rent (between deposit, first month rent, and fee) just to move in. However, some agents will negotiate the fee with you, though this will depend on the policy of the brokerage rather than the particular agent.
2. Most agents will only work with people who are ready to move within the next 15 days. Landlords will not hold apartments open for you. An empty unit is one that is costing the landlord money, so they want to achieve as close to 0% vacancy rate as possible.
3. Agent’s can seem rude, pushy, or abrupt. This is simply the reality of dealing with people who work in a fiercely competitive industry, where time is money, and situations change in a second.
4. If you don’t have a referral name, you can get stuck with the low man/woman on the totem pole. If you call a rental office and know who you want to speak with (someone who a friend has recommended perhaps) then you get that person. But if you don’t have a specific person that you want to deal with, either the first person to answer the “pool” phone (one that rings on all desks) gets you as a client or the next person in the on the list gets you as a client. Since experienced agents are generally in the field showing units, you may well get the new agents who are still building up there contacts. While everyone has to start somewhere and many new agents are perfectly fine, your ability to get the best service can be compromised by their lack of experience.
5. Agent’s can show units that would be available to you without a fee, if you had found it on your own through some other source. You will still be required to pay the fee however since they “found” the unit.
WHAT TO CONSIDER:
1. Working with established companies can be extremely helpful because they often have strict hiring policies and they will have a well established listings department insuring that you have access to the latest units. However, they are less likely to negotiate the fee with you.
2. Smaller or less established companies will be more willing to negotiate fees with you. However, they often have fewer exclusive or broker only listings and may rely heavily on the same sources that you could use (listings services, newspapers, and the Nouveau Native’s No Fee New York).
3. If you aren’t ready to move or are just “thinking about it”, go to open houses or onsite rental offices. It is unfair to force people to give up their time and ability to earn money, simply because you might someday move.
4. You must move quickly. Apartments go in minutes and available units change hour by hour. You simply don’t have the time to “think about it” in the same way that you do if you were purchasing.
5. Even though you are working with an agent, you will still be responsible for application fees and credit checks fees with the landlord or management company.
6. Make sure that you are working with a licensed real estate agent. Agents are required to carry an id card that shows that they are in fact licensed. While agents can and do loose their cards, there is no reason for them not to have a Xerox copy since the brokerage has to maintain a copy of the license too. Most of the scams perpetrated by “real estate agents” are in fact committed by people who are simply pretending to be agents.
7. I can think of only one landlord in the City that accepts personal checks for deposits and the first month rent and I can’t think of any real estate agency that accepts personal checks for their fees. You need to be aware that you will need to produce certified checks or money orders for your first month rent, security, and fee. You can also pay by bank transfer. Some companies will accept credit card payments, but thanks to charge backs and people attempting to reverse charges once they move in, many don’t. And yes, everyone accepts cash. But it is risky to walk around Manhattan with thousands in cash on you. I had a client years ago that was robbed in broad daylight when she left the bank on the way to the lease signing. She had taken out a loan to cover the deposit, first month, and fees and lost both the money and the apartment thanks to the robbery.
8. Lease signings take place in the landlord’s office or the real estate broker’s office. NOT on the corner. NOT at a coffee shop. NOT at the bank when you hand over cash. People get so excited about getting their apartment that they often lose all common sense.
All in all, if you have a limited amount of time due to work commitments or location and you can afford the fee, using the services of a real estate agent can save you a tremendous amount of time, money, and stress. But for a real estate agent/client relationship to be successful you have to be financially ready, willing, and able to rent and you have to be very clear (and realistic) about what you want and can afford.
Tomorrow I will talk about online listing services.
Tomorrow I will talk about online listing services.
Bye now!
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