Everything You Need to Know About Not Going Broke When Using an Apartment Broker
If you’re new to the apartment hunt, the idea of using a broker might be a very confusing concept—especially so if you’re moving from a lower-demand rental market to a bustling (and crowded) one like those in NYC or San Francisco.
My current roommates and I did everything we could to avoid using a broker to find our apartment because we’d heard they were expensive, and we wound up stumbling upon a no-fee broker who helped us score our place—we just… didn’t really know how it all worked. (Sound familiar to you?)
The good news is, it’s not as complicated as it sounds. The fees actually make more sense than they seem to, and it is possible to find an apartment without a broker, you just have to manage expectations and be flexible.
So, what’s a broker?
A broker is basically the middleman between a renter and a landlord (or management company—whoever owns the property). If you work with a broker to find your new place, they’ll be the one to show you potential apartments; you’ll tell them what you’re looking for and where, and they’ll show you your options and help you apply. Essentially, their goal is to try to fill up spaces for the landlord and connect them with tenants. Some brokers come with a fee, while others are no-fee.
What’s the deal with fees?
Most brokers charge fees, but there are no-fee brokers out there who can help you find your new home at no extra cost (to you, at least—the whole “no fee” name is kind of a misnomer, because they still get paid a fee in these instances, just not by you). So, first thing’s first—fees are how brokers make a living. When you work with a typical broker, you’re the one who pays the fee, because the broker is helping you find an apartment and usually connecting you with landlords in desirable properties who could otherwise fill up their spaces.
When you work with a no-fee broker, the landlord or management company pays the broker’s fee. In those cases, the landlord is willing to pay because they need to fill up the space, and it’s more desirable to you if you don’t have to pay an additional fee. And, of course, if you don’t use a broker at all, there are no fees.
How do you know if you need a broker?
You can totally do your apartment search on your own, but brokers definitely make it easier because you can skip past hours of looking at listing and tell your broker exactly what you want, where you want to live, and what your budget is, and they’ll show you what’s available (and help you manage expectations, if you happen to want something that’s simply impossible). They already know the real estate landscape in your area and they can even haggle your rent down with the landlord, since they work with them and likely have a good connection with them anyway.
However, if you have to pay a broker’s fee, it can get super expensive before you know it—in Manhattan, for example, the fee is generally 15 percent of the year’s rent, according to Apartable. If you have the money and you’re looking for your dream apartment, it’s up to you to decide if you think it’s worth it. But, if you find yourself searching on a budget, you’re probably better off using a no-fee broker (if you can find one… they’re basically unicorns) or looking through listings on your own.
According to Naked Apartments, if you want to make a go of it without a broker at all, you still have a good shot—just ask people you know for property referrals (30 percent of renters find their apartments through a connection, according to the site), search sites that are specifically no-fee, and even walk around the neighborhoods you want to move to and call management companies.
The obvious benefit to not using a broker with a fee is saving money, but the downsides? Your search will take much more time, and you’ll face more competition for apartments. Essentially, you have to decide whether it’s worth it to pay more for convenience and possibly better properties, or if you’d rather save money but deal with more challenges and spend more time hunting down the perfect place.
Did you use a broker, or skip on it? Have any advice to share?