NYC Real Estate Brokers: What Are They & Why Do You Want One?
The New York City Real Estate Market
New York City is unlike any other market in the country. Real estate is in very high demand, meaning there are more newcomers looking to settle in the area than there are available properties to house them. Because of this, the market is ultra-competitive (not to mention, ultra-expensive). Throw in the fact that NYC has thousands of apartment options (many of which can rent in under 24-48 hours of being listed), and it can quickly become overwhelming for a person looking to rent.
The best way to beat out the competition and secure an apartment quickly is having a firm understanding of how the market works and its complex idiosyncrasies – not a particularly easy task, especially if you’re new to the area. This is where guidance from a quality, licensed real estate broker or agent can be invaluable.
Broker, Agent and Salesperson: What’s the Difference?
In some ways, a broker, agent and salesperson are the same thing; they are all licensed and qualified to help you buy or rent a home or apartment. Technically, a broker is someone who has additional licensing allowing them to have licensed agents work under them. In NYC, the terms ‘agent’ and ‘broker’ are somewhat interchangeable – oftentimes, licensed agents are referred to as brokers. For this article’s purpose, we’ll just use the term ‘broker.’
Benefits of Using a Real Estate Broker
A real estate broker is a licensed, qualified professional who acts as an intermediary between landlords and renters. In NYC, it’s commonplace (and sometimes necessary) for both renters and apartment owners to be represented by a real estate broker.
Good brokers are experts in the notoriously difficult NYC real estate market and can help set realistic expectations to ease the sometimes-frustrating, sometimes-exhausting process of finding a rental in the city. Their time is spent searching for apartment options based on clients’ preferences of neighborhood, square footage, price, and amenities – a real time-saver compared to if you were to search independently. They also schedule appointments and accompany you on all apartment visits. Most importantly, a good broker should represent your best interests.
Brokers can also have beneficial landlord relationships or access to apartments not yet listed on the market, increasing the number of potential matches. With a quick-moving market like NYC, it’s beneficial to have an arsenal of back-ups in case an apartment is leased before getting the chance to view it.
Another crucial part of a broker’s job is making sure your required paperwork is in order prior to applying for and signing a lease. Having everything in order before finding the right apartment is imperative. Not completing and compiling the proper paperwork beforehand can result in a delay in the leasing process, giving others the opportunity to possibly steal the apartment.
Brokers can even negotiate lease terms to make sure their clients get the best possible deal and are experts at spotting possible rental scams. The amount of time, hassle, and money saved by working with a good broker can be invaluable.
Cons of Using a Broker
One of the main reasons people choose not to use a broker during their rental search is the infamous broker fees you’re required to pay once your broker finds you a place to live. Broker fees can vary slightly, but a typical amount in NYC is 15% of your annual rent. No matter the budget, this adds up to a decent chunk of change. At a 15% broker fee, a $2,000/month apartment would end up costing an additional $3,600 in broker fees, to be paid when the lease is signed.
Renters should also be cognizant of the occasional “bad” broker. Finding a new home is one of the most significant decisions a person can make when relocating to a new city, so it makes sense to want the help of someone trustworthy. It’s important to be mindful of brokers who don’t seem to have your best interests at heart. A general rule of thumb: go with your gut. If something seems too good to be true, it probably is. And no reputable broker will ever ask for payment for an apartment sight-unseen.
Is it Possible to ‘Go It Alone'?
The short answer is yes – it is possible to rent an apartment in NYC without using a broker. In fact, there are plenty of websites out there that list available rentals (think StreetEasy, Craigslist, etc.) However, expect to run into some roadblocks. One possible disadvantage of apartment searching independently could be lack of inventory. Some landlords will only give brokers access to the properties they manage, which can severely limit the amount of available properties in a market where demand greatly exceeds supply.
Other potential roadblocks can include things like dishonest listings, shady landlords, or confusing rules and regulations. While it’s possible to find an NYC rental without a broker, working with a local expert can greatly cut down on time, stress, and potential for disaster.
What About Owner’s Payment?
You may have heard about something called an Owner’s Payment or O.P. listings. When you come across a listing that has an O.P., it means that the landlord of the building is offering to pay a special fee to a broker who brings them qualified renters. Think of it as a bit like a ‘bonus’ to the broker – not necessarily in lieu of a commission. In fact, the amount is usually much less than what a typical broker fee would be.
You’ll want to make sure to see properties that have an O.P. and those that don’t. Don’t make the mistake of thinking that properties with an O.P. are just properties that a landlord is trying to unload (although sometimes that is true – that’s why they are offering it). A good broker will show you all possible properties on the market that fit you needs… not just the ones that pay the most.
Note: If Dwellworks Property Advisors identifies a possible O.P. in your transaction, we’ll do our best to negotiate with the landlord to give you some sort of benefit instead of paying us a bonus. Every situation is different, so it doesn’t always work out, but it’s our goal to give our clients the best absolute service and experience possible.
Are you moving to NYC and want support finding and securing a place to live? Dwellworks Property Advisors specializes in people just like you. We’ll focus on your apartment hunt, so you have more time to focus on life.