A rent-stabilized 1 bedroom apartment for $1,100? In NYC? The broker's fee is $15K.
How much would you pay a broker for a $1,100-a-month apartment if you knew the rent wouldn’t be jacked up year after year?
Broker fees are standard procedure in the city’s highly competitive real estate market, even when tenants find the units online and do most of the work themselves. Typical rates range from a month’s rent to a higher percentage of the yearly total. Garbutt said he decided to pass on the place because the upfront cost would have wiped out his savings. He said he found another one-bedroom in the same building — this one listed online at $1,100 a month — and again texted the broker.
"Although there are no standard or typical or legal caps on broker fees, Keller Williams NYC adheres to real property law and its guidance in the commission fees that are charged to reasonably relate to legitimate services provided to renters by our agents and firm,” said Richard Amato, an operating principal at the firm.
In most cases, there is no way of getting around it, said Allia Mohamed, CEO of listings and landlord review website openigloo. Yet brokers know that someone with disposable income may be willing to pony up for a rent-stabilized apartment, since they could save money down the road. That’s the argument Garbutt said his broker made.Still, that arrangement locks out the vast majority of New Yorkers who can only dream of paying that kind of fee.For a $3,000-a-month apartment, that means you would need $11,400 upfront to cover the security deposit, first month of rent and 15% broker’s fee.
Nikki Thomas, a broker and real estate agent for the Corcoran Group, declined to take a position on the legislation but said nixing the fee could be good business for property owners. “When the landlord is hiring the broker, they’re the ones benefiting from the headache the broker is taking off their shoulders,” Mohamed said. “They definitely put in a ton of work in helping the landlord sift through applicants and prepare that space.”