8 Truths About NYC Real Estate Brokers: Beware!
Eight important facts and ways to protect yourself.
Think your NYC broker is working for you? Think again. You’re not in Kansas anymore. Lord knows I’ve had more than my fair share of broker-induced real-estate headaches. It’s a dirty business, and if you don’t know how to look out for yourself, you’re food for the piranhas.
“In New York City alone, there are 27,000 real estate agents,” says a top broker. “Last year there were 12,598 contracts, right? That means a lot of real estate agents did not do deals.”
NYC real estate brokers make money with turnover – and a lot of money. They charge the renter one month’s rent or 15% of the year’s total rent. Make sure to negotiate the commission rate before you go out with them, because once you see that apartment that you just must have, the broker is fully aware that they have you over a barrel in terms of the commission – and you can bet it’ll be the full 15%.
Here are a few other things to keep in mind when working with a NYC real estate broker:
1. They don’t want you to get a good deal.
They want you to rent or buy something – and they want it to be at the highest price possible, because every $100/month more you pay in rent, is at least another $100 in commissions they’re putting in their pocket. Therefore, they’re not going to negotiate as hard as you could if you found out who the listing broker is and went directly to them.
2. You can bypass them.
If there is an apartment you really want, but it’s labeled as “broker only,” you may be able to get a better commission deal if you go directly to the listing broker. Brokers usually split the 15% fee, with 7.5% going to the listing broker and 7.5% to the broker (your broker) who brings the client in. This means that if you go directly to the listing broker, you may be able to negotiate that they take an 8.5% or 10% fee instead. Unsurprisingly, most brokers are fine with cutting the other broker out if it means more money for them.