Broker fee's unearthed
There are already so many things to consider when looking for a new apartment in Brooklyn, now you hear that the apartment has a fee? What does that mean?
Ugh, we know it sucks to have to pay a Broker's fee on top of the price of the apartment, but in such a high-demand rental market like Brooklyn it is just another thing to equate to your budget.
In an effort to bring clarity to the various fee's, we'll unearth the common ones.
~ NO FEE
Obviously the fan favorite, a 'NO FEE' 'apartment means you pay the advertised price with no additional fees. However, Some Owner's ask for various up-front payments so that does not always mean it will be the cheapest option. Most common upfront fees we have encountered with a no fee apartment are:
- First month + 1 *refundable security deposit
- First Month + 2 months *refundable security deposit
- First Month + Last Month + 1 month *refundable security deposit
~ ONE MONTH FEE
The most common reason you come across a 'ONE MONTH FEE' is because the apartment is in a high-demand area and the Owner knows it will rent, so they do not feel compelled to offer a no fee incentive. For this reason the Agent needs to ask the Renter to pay that fee. Generally, an Agent will receive the equivalent of a one month fee from a landlord, so we believe asking that same price from a Renter is a fair request.
~ 10% - 15% FEES
The principle behind this fee structure is the same as what we mentioned in the one month fee, however, there are several cases where a higher fee would apply. Generally we find that asking more than a one month brokers fee is not always relevant, but it is important to note that other Agents may not feel the same way. There are 2 cases that an apartment would have a higher fee. 1. If an apartment is in really high-demand and the Agent knows it will fetch a good price, they would be incentivized to offer it to the person willing to pay the highest fee. 2. If an agent is helping you rent an exclusive, fee apartment, advertised by another Agent, he'll need to collect a 15% fee to co-broke so that both agents can get paid fairly. There is no specific logic to why an Agent would choose 10 or 15 percent, nor is there any regulations to the amount an agent can ask someone to pay, it is mostly just what they feel they can fetch for the apartment.
* security deposit refund is based on the condition the apartment is returned and is subject to the Landlord/Tenant legal rights.