NYC Broker Fees 101

As I began the ever exciting yet stressful process of apartment hunting in New York City, I heard the term “broker fee” and was thoroughly confused. Did I really need a broker to find a place to live? Any time I had rented in the past, we contacted a rental company or a landlord and rented directly through them. We certainly didn’t need another person to help find us somewhere to live – a middle (wo)man of sorts –  especially as college kids with a low rental budget and not a whole lot of prior renting experience.

Everyone in NYC, though, told me that in order to rent an apartment, I definitely needed to use a broker. Seeing as it was the first time I’d heard the term “Real Estate Broker”, I had one big question that I never really got answered: What’s the difference between a broker and a real estate agent? It sounded like a broker did exactly what a real estate agent did, and at 22 years old I didn’t feel like I needed to hire a real estate agent just to find an apartment. Didn’t they handle bigger pieces of property?

Well, thanks to Google, it isn’t too hard to find out. According to Realtor.com, there are multiple professional titles you will hear when looking to rent or buy an apartment or home. A Real Estate Agent (also known as a Real Estate Salesperson) is anyone who has earned a real estate license, whether it be professional, associate broker or broker. Standard requirements vary from state to state, but they basically have to take a certain amount of classes and pass a real estate exam in order to obtain their license. A Realtor is a Real Estate Agent who has chosen to join the National Association of Realtors. In other words, they have a stricter set of rules to uphold. A Real Estate Broker has taken their agent status to the next level. They’ve completed extra courses and passed a brokers license exam. These people can choose to work alone or with other people. Finally, a Real Estate Associate Broker has done everything that a Broker has, however, they choose to work under another Broker.

I know, I know, somewhat repetitive and arguably boring, but trust me, it helps to understand these differences when you’re apartment hunting! You can save the brain space for more important things, though, by leasing with Bedly. Since you lease directly through them, you don’t need to worry about what the difference is between a Real Estate Agent and a Real Estate Broker. Bedly is your go to for everything!

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To be honest, I didn’t mind the idea of having someone scout out apartments for me to see. It was the broker fee that was daunting. Why did I need to pay someone a huge fee just to find me an apartment? Couldn’t I turn to my trusty friend Google to see what’s on the market? And what constituted a broker fee, how much money are we really talking?

In terms of money, Thrillist defines a broker fee as “the commission real estate agents earn when they help you find a place to live, and it can be anywhere from one month’s rent to 15% of the annual rent.” Now, that’s a lot of cash up front. I don’t know many millennials walking around with an extra $3,000 on hand (and that’s if you’re paying $1700/month in rent, the average for a studio or one bedroom in Manhattan), not including the first month’s rent and security deposit. That means we’re talking roughly $6,400 up front. No thank you.

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Anywhere else in the US, it’s typically the owner paying the agent fee and that’s IF an agent is involved. In some cases, this fee is broken down and added on as a monthly rent payment, so you never know you’re actually paying for a broker. Oftentimes, though, the rental transactions occur directly between the owner (or rental company representing the owner) and tenant.

Yes, a broker absolutely can save you time in the long run. Some people even argue that it’ll save you money, but I know as a young millennial apartment hunting, there’s no way I would have gone through more than $3000 in travel expenses or other costs I would have needed to the front while apartment hunting myself.

Want to save both time and money? Then lease through Bedly! They only require first months rent and security deposit, and you’ll be hard-pressed to find that anywhere else. Depending on your credit score and income, in working with a broker you may even be asked to pay up to four times the monthly rent as a security deposit. Since Bedly doesn’t require a credit check – just a background check – then you can guarantee you’ll be saving a lot of cash up front, not to mention the added stresses of working with a broker while on a time crunch.

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In terms of timing, NYC apartments go on and off the market like crazy, so you have to be quick and smart about what you are looking for and make a decision. A broker can weed out any apartments that don’t fit your needs and find somewhere in the neighborhood you want, too.  But guess what? Leasing through Bedly does that, too! Bedly offers a quick 30-second quiz to help you find your perfect space in your dream neighborhood. Questions include which borough you want to live in, what your budget looks like, your move-in timeline, if you’re moving alone or with a partner/roommates, and what kind of space you’re looking for (shared bedroom with a partner,  multiple rooms in a shared apartment, or an entire apartment). This is exactly what a Broker does but broken down in an efficient and timely manner. You’ll save so much time, money, and energy by leasing with Bedly, you can do fun stuff like check out the various NYC parks, attend summer festivals, and other weird stuff you can only do in NYC.   

If you’re still debating whether or not to use a broker, there are some ways you can try and lower the broker fee:

  • Contact the listing agent – They can act as the owner and the renter’s agent, and the fee will be lower if there is not another outside agent (broker) involved.
  • Negotiate – You have bargaining power! Always ask if the fee is negotiable. If the agent invests time into you and you end up not wanting to pay the fee and dipping out on the apartment, they walk away with nothing. Keep in mind, though, this has to be a quick and tight process as apartments go fast in NYC! When I was in my initial rental process, my roommate and I had found an apartment we loved. It was in the evening, and we wanted to get our application in before the firm closed. I remember waiting in line at the copy store to get the forms faxed to the broker while on the phone with my mom having her fill out and fax over the guarantor application. All of this was happening at nearly closing time, and we promptly received a phone call only to find out someone else had already put an application down. So when I say apartments go off the market fast, I’m not joking. You can save this stress, though, by leasing through Bedly. No running around to try and gather the mounds of paperwork you need to rent an apartment and submit before someone else does. Bedly wants to take care of you and make the rental process as smooth as possible by eliminating the brokers and crazy deadlines. You can actually plan your move months in advance!
  • No-Fee Apartments – These absolutely exist and when you search online, you will be presented with an immense amount of results. You have to be careful, however, because sometimes they are scams. If they look too-good-to-be-true then go with your gut, because they probably are. In those instances, the apartment may go off the market as soon as you arrive, leaving you to check out other “fee” apartments in the area. No-fee apartments are also oftentimes units in high rise buildings or complexes, so if your next move includes dreams of finding your Carrie Bradshaw one bedroom apartment in a pre-war brownstone, you may be forced to use a broker.

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The simplest way to save cash, time, and energy while apartment hunting in NYC is by leasing with Bedly. They have the most friendly customer service staff ready to answer any and all questions, don’t require more than first months rent and security deposit, and allow you to plan your move months in advance if that’s what you’re looking for! This alleviates all the stress of timing your move correctly (I was left homeless for a month after my renting disaster), the need to have a ton of cash saved up front, and the all-consuming chaos of a move. So do the obvious and contact Bedly today!

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