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.

Useful Methods to Help Find the Perfect Apartment

If planning on moving or looking for a first-home, there are several different methods that can be used to search for the right property. A wide-range of options is available for the home hunter, which might consist of searching online, using apartment locators to driving or walking around the local neighborhood. Finding the ideal apartment that is situated in the right part of town, offers the right amenities, and fits within the available budget isn’t that difficult provided you have the right perspective about how to manage the process.

Here are some of the most effective methods used for finding the ideal apartment –

Brokers – If searching for an apartment to rent in any of the major cities, then you are likely to have the option of using one of the many real estate brokers. If you have a pretty good ideal of the neighborhood you wish to live in, it is often best to search out a broker based in that area, as they are likely to be more knowledgeable on the area and what might be available within your budget. Most brokers also provide a website which gives you the option to go online and view the latest luxury apartments to rent, often with full descriptions and photos. Although, if thinking of using the services of a broker, you might want to research the company well, as this type of service isn’t cheap, so you want to be sure of using a licensed and experienced provider.

Apartment Locators – An apartment locator is a quick and efficient service to help with finding local apartment to rent. Most of the locators are able to provide access to a large database of potential rentals all across the area you’re searching. This extensive database of viewable properties often makes it easier to find a property that is completely tailored to your particular requirements.

Word-of-Mouth – If wishing to avoid the potential hefty fees of an agent or broker, you might want to go the route of letting relatives, friends, or colleagues know you looking for an apartment to rent. A number of people are having success at using such a non-cost method for finding a new rental apartment. If you are searching for an apartment, it might also benefit to drive or walk around the local area to search for ‘For Rent’ signs, which can give a great idea of what might be available on the market.

Classified Ads – Another common method for searching for the ideal apartment is to read the classified ads, which might appear in local or community papers to online websites or message boards. Most of the local papers feature a specific area on their website to list the latest classified ads, so this means you are always looking at the most recent listings.

The Broker’s Point of View

This article will focus upon looking at you and the potential buyer from the broker’s point of view. So many articles are written by commercial real estate and how to approach it but is also important to know what it looks like from the other side of the table. The broker has as much riding on the process many times as the investor does.

Let’s start by looking at a listing from a listing broker. When the listing broker brings a buyer to the table and recommends the seller moving forward with that particular buyer, it is because of the recommendation of the broker many times that a seller move forward. If the buyer backs out, the seller is not necessarily unhappy with the buyer but rather with the listing broker because of the recommendation given. It is important for the broker to know what the buyer is like because it is the broker’s reputation that is on the line.

Any time you come to the table as a buyer, the broker is going to do due diligence on you to make sure that you can close the deal. That ultimately is the main key and can be more important than price. The broker is going to check on your past dealings and that you followed through on deals in the past. The broker will then rank potential buyers and will often recommend that the sellers sell to the buyer at the top of his or her list. This is very important for any buyer to know so that you can set yourself up very well. If you worked hard to develop a reputation and the listing broker called around to people you worked with in the past and you come highly recommended, your name will move higher on the listing brokers’ ranking list. That broker will recommend to the seller that you be the one who buys the property because you will follow through.

If you have no brokers you worked with in the past and had not been in commercial real estate very long, you may want to go into a commercial brokerage with a check and a list of your net worth. Showing net worth and proof of funds is very important because you can show the broker that you are able to close. Most instances of buyers failing to go through on the deal occur due to lack of money. If you show the broker that you have the money, you have removed a major obstacle from them recommending you to their seller.

The broker is going to pay attention to see what your reputation is like. Getting the deal closed is important because the broker’s paycheck comes out of the closing. A broker will do what is necessary to make sure to protect his or her feet. Make sure that your brokers are well taken care of and you’ll be happy in the end.

Hopefully this article on the broker’s point of view gives you a better sense of what you can do to say yourself up right in the eyes of the broker. The broker’s reputation is on the line until the transaction is closed so he or she will make sure to set themselves up right in the eyes of the seller.