New York Rental Market

New York Rental Market

New York Rental Market

Technically, brokers are the bosses of the real estate agents and the agents are the ones that show the apartments. In case you didn't know, agents do work based on commission and generally do not have a base salary. An agents' job is simply to find you an apartment that meets your needs and the typical fee charged to you, the prospective tenant or renter, is 15% of the annual rent. This usually comes up to the equivalence of around one and three quarter's months of rent. I know this sounds like a lot, but here's the reason why they charge this much. First and foremost, this is incurred because by law this is the maximum that a broker can charge. A broker is the one who sets the fee and an agent may be able to negotiate on behalf of the client in some brokerage firms, but in others there may be no room for negotiation. In dry and desperate seasons some brokers may charge the client the equivalence to one months' rent, but again it depends on the firm. The reason why some agents do not want to have the fee reduced is because the commission does not belong entirely to them (otherwise how would the company earn revenue). The commission is paid to the broker and the agent receives a split from the fee.

A landlords' market does not necessarily mean it is a fee market, but this is usually the case. A landlords' market is basically when there is a higher demand for apartments than what is actually available; in other words, there are few vacancies yet plenty of people looking to move into a new apartment. This can be caused by the arrival of people from out of state relocating for a new job, school, etc. Consequently, it is not unusual for the few apartments available in each neighborhood to be on the market for a maximum period of two weeks before getting rented. This is the current market condition in the first quarter of 2011 and of course this is an opinion based on my experience so far this year.

A renters' market is obviously the opposite. There are not many prospective tenants and plenty of apartments available. This is when the clients can pretty much take their time looking at several apartments without having to worry much about losing one they liked as the probability that it will remain available is very likely. If it does get rented there are still several comparable ones available.

A landlords' market is usually a fee market because they have the upper hand; they are the ones with the product that is in demand, apartments. The truth is that every apartment is a fee apartment. It's just a matter of who's paying the fee. An apartment would be "no fee" because there is no fee being charged to the client, but to the landlord. The landlord would pay the fee in certain occasions such as if it is a renters market, for example. In a renters market the landlords are trying to rent out their apartments, but there is so much competition with plenty of apartments available from other landlords that may even be better priced. This is when they decide to pay brokers to rent out their units.

A landlord may decide to pay the broker fee when the apartment is just not that good of a deal. This can occur in both a landlords' and a renters' market. Perhaps the apartment is overpriced or it merely lacks renovations. Either way, the apartment is not getting rented and the assistance of a broker is urgent. There are instances where the landlord has a new development and they are offering concessions to create exposure to their buildings and apartments. Some landlords simply increase the monthly rent to be able to cover the broker fee, which technically means that the client is really still paying the commission.

The fee apartments are usually the best deals, which is why the broker must collect the fee from the tenant. The landlord knows that the unit is going to get rented soon regardless if it's with the use of an agent or not. The apartment might be amazingly priced for the location, space, or renovations and therefore the landlord will not be willing to pay a broker to rent out the apartment.

Some apartments are low broker fee units because the landlord may only pay a portion of the commission. This is where the acronym 'OP' comes in. This means the 'owner pays.' There are times when owners or landlords pay a small amount to the broker and so the rest of the fee to meet that particular broker's fee must be collected from the client.

Thank you so much for reading this selection. It is not intended to convince you to pay a broker fee, rather to inform you. There are plenty of awesome no fee apartments, but sometimes just not the right ones for certain people and therefore the fee apartments should not be automatically eliminated. I hope this simply allows you to become an educated consumer and maybe capacitate you to shed some light to those whom you know that are in the process of moving. Thanks again for reading and please do not hesitate to add your insight or post any comments and opinions as I do look forward to reading them.

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