Pitfalls to Avoid When Finding No Fee Apartments

It should come as no surprise that finding an apartment that fits your needs in Manhattan is a very tough job. There are literally thousands of choices, yet none of them will fit your fancy. Even worse, if you’re looking for a no fee apartment, your odds of finding the right one just go down from there. It can seem very overwhelming at times, but if you know some secrets from the pros, you can find a good, well priced apartment in no time.

Finding an apartment, particularly a no fee apartment in Manhattan, is so overwhelming that most people use a broker to find one. If you give a broker the location, the type of housing that you want, such as a brownstone, elevator, walk up, or any other specific type, and the fact that you only want to find a no fee apartment, they should be able to find your apartment and set up a showing with the greatest of ease.

The reason they are able to find these no fee apartments in Manhattan, especially find them so quickly, is because they are subscribed to a list that alerts them any time an apartment becomes available in the no fee range. However, many times these brokers can cost upwards of 15% of your annual rent.

There is good news, on the other hand. Because of the market shift, many landlords are willing to pay the broker’s high fees in order to get you in to the apartment and paying rent. You can even specify to the broker that you would like to only search for apartments that have landlord who will pay the broker fee for you.

Don’t rely on Craigslist or Kijiji to find your next apartment. A lot of those listings are just brokers looking for leads to find a person willing to pay their 15% fee, and you will not get access to the actual place to live until you pay them their fee.

Introduction to the Ways You Can Rent an Apartment in New York City

In New York City, almost 66% of all residents are renters, according to the 2000 US Census. This equates to an average vacancy rate of about 3% at any given time. Because there is always intense competition for housing space, the rental market in the New York area has characteristics you won’t find anywhere else in the US.

This brief article will introduce you to the various ways that most people look for rental apartments in New York City.

The Role of Brokers… It has been traditional in New York for renters to use the services of a broker to find their apartment. This is because unlike most places in the US, landlords in New York City rarely advertise their vacant apartments. They don’t have to spend their money on ads because real estate brokers are happy to assume that expense in exchange for being able to collect a hefty brokerage fee from the renter when a lease is signed. (It is illegal for an apartment owner to charge a fee to rent his/her own apartment.)

Most NYC brokers do not share their rental listings with other brokers because there is no true Multiple Listing Service (MLS) in New York for rentals that all brokers belong to. As a result, the market is extremely fragmented. Using the services of a broker to find an apartment is no guarantee that you will ever truly know about all the apartments on the market that fit your price, neighborhood, and size desires. Also keep in mind that if a NYC broker finds you an apartment, you will most likely have to pay a broker’s fee (commission) equal to about 15% of the first year’s rent. That’s almost two month’s of rent! Ouch!

FACTOID: Rental brokers tend to specialize in one limited area because New York is a big city and it takes too much time to go to all NYC area neighborhoods with potential renters. The broker’s convenience is more important than your convenience because Time = Money. Therefore, a broker will expect you to limit your apartment search to the neighborhoods closest to the broker’s office.

Because Time = Money to a broker, you’ll be shown a few apartments within the broker’s territory and will be expected to choose the least objectionable one. If you still haven’t found a home after a few days of service, a broker will lose interest and move on to a more urgent client. After all, brokers don’t get paid to show you apartments. They only get paid when one of their clients rents an apartment from them. Their job is to sniff out the most desperate renters, the renters who absolutely need an apartment TODAY. That’s the only type of client guaranteed to pay a broker!

About using “Free” Websites…

Budget-conscious renters like Craigslist.org and other free sites because there’s no registration fee to access the data. You can browse through perhaps hundreds of ads in Craiglist, with many of them sounding so sweet and tempting. But that’s the problem! You might indeed find many apartment listings with too-good-to-be-true rents, and guess what they ARE often too good to be true.

More likely you will find that most of the posted listings are from brokers, whether disclosed or not. So the “free website” becomes merely a way to channel potential renters to brokers. Brokers need to make their phones ring with potential renters. What easier way to do that than by making up listings that are enticing, then placing them where all can see them? You’ll make the call, and often enough, wind up paying a broker to find you an apartment. What did you gain by going to a “free” website? It seemed like a great way to find a “no broker fee” apartment, but you got caught in the trap.

There’s got to be a better way!

The Subscription way to find an apartment. A superior model…

What you want to do is find an apartment rental website that does the following:

1. Does not take any broker listings at all, only listings directly from landlords, owners, and managing agents.

2. Can guarantee its users that all listings are 100% No Broker Fee.

3. Has listings updates 7 days per week, and

4. Customer Support for any question or concern without any bias.

Doesn’t this just “feel” like the right way to find an apartment?

There are several such websites in New York, but only one that stands out because of the user testimonials and the yelp testimonials. It is the one that’s been around the longest (since 1995) and is the largest by traffic and usage. I’ll let you look in the “about the author” section to see which one I’m talking about.

There is so much more to say on this topic that can’t possibly be addressed in this article. To find out more on renting in New York, I highly recommend a free guide to renting called ” The Essential Guide for Smart Renters “. It’s got 20 pages of the best information to renting in New York today, even if you have credit problems, need a guarantor for your lease, or use government programs. You can find “The Essential Guide for Smart Renters” on RDNY.com’s website.

Good luck in your apartment search!

Avoiding Apartment Fees

Before anything else, an individual renting an apartment needs to understand exactly what a fee apartment is. When a broker assists a client in locating a new apartment, the broker must be compensated for the work they performed, so the broker in turn charges their client a fee. Usually, the fee is 15% of one year’s rent. However, in most markets within the United States, this 15% fee does not exist. For the broker to receive compensation, they are usually paid by the apartment in question’s owner, since the broker located them a qualified tenant.

Many opinions have been formed over this process, however. Sometimes it is reasonable to charge something, due to time constraints, etc., but sometimes brokers are able to locate apartments for tenants in a mere 10 minutes, but they still receive the 15% fee. So in simple terms, the broker would receive, say, $3,000 for 10 minutes worth of work and research. This has caused quite an uproar with certain people who feel it as being extremely unfair.

For the individual in search of an apartment, there are two methods for avoiding fees. The most common way to avoid fees is to rent an apartment directly through the property owner. If owners offer brokers an owner payment for the apartment that is leased out to a tenant, the broker is compensated with the owner payment, therefore eliminating the need for the broker to charge a fee.

The owner of the apartment offering the owner payment to the broker allows the broker to advertise the apartment as a “no fee” apartment, therefore attracting many more potential tenants, even though the tenant doesn’t necessarily receive a better deal.

As a whole, the mass majority of potential tenants will more than likely be more interested in an apartment with no fees as opposed to one that has fees.