In many big cities, like New York, it’s common to work with a real estate broker to find an apartment. In fact, many listings are only shown exclusively through brokers. You can still find one on your own but it’s definitely much more difficult.
Unfortunately, when working with a broker to find a place to live, renters have to pay really high fees. A broker fee can cost anywhere from one months rent to 18% of the yearly rent. Lets put that into perspective; for a $2,500 per month apartment that could cost up to $5,400.
If you do decide to work with a broker, it’s important to know what to expect and what to look for. In a perfect world, brokers have your best interest in mind. But we know that’s not always the case.
Let’s take a look at 5 common broker warning signs to watch out for.
Warning Sign #1: Bait and Switch
You find an ad on Craigslist for the perfect apartment. You call the broker and he’s more than happy to show it to you. But when you get there, he tells you it’s already been taken.
However, he has another apartment that is supposedly just like it right around the corner. Unfortunately, this tactic is hard to avoid but if it happens to you, it’s a sign that you need to stop working with this broker — he’s not being honest.
Simply request that you see the original property or that you will have to see a different place once you’ve had time to evaluate it yourself. Additionally, you can seek out a new broker if you don’t feel comfortable.
Warning Sign #2: Asking for an Upfront Fee
When you’re working with a broker, you only pay a fee when you sign an actual lease and the apartment is officially yours. Sometimes, you might have to pay an application fee to apply for the apartment.
However, if the broker is asking you for a fee upfront, walk away. Don’t be fooled, you should never have to pay anything just to view an apartment listing.
Warning Sign #3: Avoiding Your Questions
As you search for an apartment, you’ll probably have a lot of questions — and rightfully so. You’re going to be spending a lot on rent so you want to make sure you know all the facts before you make a decision.
If the broker you’re working with is avoiding your questions, it’s a sign they maybe hiding something. Don’t take your chances. Do your due diligence ahead of time or find someone else to work with.
Warning Sign #4: Being Too Pushy
By nature, most brokers can be a little pushy. After all, they are essentially salesmen. But sometimes, it can cross the line. If you feel that they are being too pushy or making you feel uncomfortable, trust your gut.
Some brokers will try to tell you that you won’t be able to find another apartment if you don’t work with them. That simply isn’t true.
Warning Sign #5: Demanding Too Much
Broker fees can be very steep. That’s why you need to know how much you should be paying before you start working with a broker. It varies from city to city so make sure to do your research. For instance, in NYC, an average broker fee is around 12-15 percent of your yearly rent — 8 percent would be considered low while 18 percent would be high.
There are pros and cons to working with brokers. They can make your apartment hunt much easier but it comes at a price. Always look out for warning signs. If something seems fishy, it probably is.
Have you used a real estate broker to find a new apartment? What was your experience?