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Doing their best to ensure that poor saps moving to the city continue to pay brokers' fees? Or maybe they are just Pollyannas. Or maybe they are just unaware of the true state of the Manhattan real estate market.
Reading many of the posts on here, it seems pretty much a certainty that a renter has to pay a broker's fee.
Well, according to this NYT article which I am sure many on this site have read, it sounds like the tide is turning in favor of the renters. Perhaps this downturn will once and for all finish off the scam that is the residential real estate brokers' compensation scheme.
This is not to say that brokers are universally lowlifes. It's most likely the old 80/20 rule. Or maybe even 95/5. I know several brokers that do an excellent job and service their clients in a highly effective manner and deserve to be compensated well for their services. However, the current compensation scheme is completely out-of-whack and needs to be modified. Just like in other parts of the country where the number of real estate professionals increased exponentially during the housing boom, there needs to be a contraction in the number of people working as residential real estate professionals in NYC. Perhaps the softening that has taken place over the last 18 months in the rest of the country is finally catching up to Manhattan.
When you purchase a house anywhere in the country, the seller pays the broker his/her fee out of the sales proceeds; this is how NYC rentals should work. Perhaps it's the landlords that need to get a grip on reality as well. According to the article above, it sounds as if many are.
Doing their best to ensure that poor saps moving to the city continue to pay brokers' fees? Or maybe they are just Pollyannas. Or maybe they are just unaware of the true state of the Manhattan real estate market.
Reading many of the posts on here, it seems pretty much a certainty that a renter has to pay a broker's fee.
Well, according to this NYT article which I am sure many on this site have read, it sounds like the tide is turning in favor of the renters. Perhaps this downturn will once and for all finish off the scam that is the residential real estate brokers' compensation scheme.
This is not to say that brokers are universally lowlifes. It's most likely the old 80/20 rule. Or maybe even 95/5. I know several brokers that do an excellent job and service their clients in a highly effective manner and deserve to be compensated well for their services. However, the current compensation scheme is completely out-of-whack and needs to be modified. Just like in other parts of the country where the number of real estate professionals increased exponentially during the housing boom, there needs to be a contraction in the number of people working as residential real estate professionals in NYC. Perhaps the softening that has taken place over the last 18 months in the rest of the country is finally catching up to Manhattan.
When you purchase a house anywhere in the country, the seller pays the broker his/her fee out of the sales proceeds; this is how NYC rentals should work. Perhaps it's the landlords that need to get a grip on reality as well. According to the article above, it sounds as if many are.
I think they are.
I read one thread where somebody wanted to relocate here with his wife and wanted to know a "good" time to apply for work.
Someone told him HONESTLY that there wasn't any jobs for him to apply for because companies weren't hiring. Not only that the mayor said he was going to be LAYING OFF people. For NYC, this means that the economy is in the freakin' toilet. There are thousands of skilled people out of work in NY who can't find jobs. What makes this person thinks he's so special?
But yet, this ONE PERSON tells the guy some Mod cut: language about "following his dream". I had to check to make sure that I was in the NYC forum, because that's the same nonsense I read on the LA boards (where I currently live). LA's economy is at DEFCON ONE, the state government has no money, people are losing their jobs left and right, but there are still posters saying how they need to "make that move" or else they'll end up regretting it later.
They will end up regretting it the day they get off the darn plane.
Last edited by Viralmd; 01-31-2009 at 01:55 PM..
Reason: Language
Ineed, I agree that the broker fee should be the burden of the owner, as it's a cost of doing business, and should not be forced upon the renter to pay several thousand dollars for the privilege of signing a lease. In the current climate, owners are absorbing the fees, but if the practice were to change when the market picks up, the costs would be included in the rent.
If, however, we are speaking of a buyer-broker, then the purchaser/renter should be paying them as they do not have any fiduciary responsibility to the owner, and are solely responsible to represent the interests of the purchaser/renter. It can sometimes be negotiated into a purchase that the buyer-broker gets paid, but not always. However, a good buyer-broker is worth their weight in gold, IMO, since they can really shepherd the process.
Some posts do seem to put a spin on particular neighborhoods, but I don't know that this is much more than people having a certain sense of pride in the areas with which they are familiar. It is difficult to get an objective point of view from one or two responses, since the truth lies in the middle, as it's a matter of perspective.
Doing their best to ensure that poor saps moving to the city continue to pay brokers' fees? Or maybe they are just Pollyannas. Or maybe they are just unaware of the true state of the Manhattan real estate market.
Reading many of the posts on here, it seems pretty much a certainty that a renter has to pay a broker's fee.
Well, according to this NYT article which I am sure many on this site have read, it sounds like the tide is turning in favor of the renters. Perhaps this downturn will once and for all finish off the scam that is the residential real estate brokers' compensation scheme.
Perhaps it's the landlords that need to get a grip on reality as well. According to the article above, it sounds as if many are.
You asked, "are some the posters on here apt brokers?" The answer is probably yes, people from all fields are on here.
You also are citing an article that's supposed to prove to us that article says that the status quo you are generally quoted on this board cannot possibly be true and that "Perhaps it's the landlords that need to get a grip on reality as well. According to the article above, it sounds as if many are."
I'm just wondering if you read the whole artice you are citing. Because while it does say that renters are starting to have more power, it also says that
“Then, in September or October, the whole thing broke loose,” Mr. Frigan said. In a one-month period, from Dec. 23, 2008, to Jan. 23, 2009, some 1,700 of Halstead’s 9,000 total rental listings included owner payment of the broker’s fee.
If you didn't really look at the numbers you might assume because of the tone used that a market that used to be in favor of landlords is now completely in favor of the renters and that renters just aren't paying fees any more - the landlords are.
But then if you look at the numbers cited, you see that this enormous turnaround they are speaking of has only resulted in less than 20% of the apartments in the example being no-fee to the renter. Guess what, that means more than 80% are still renter-pays-fee.
So I guess if you're looking for an apartment now and you don't like the advice of the CD posters who tell you that what's par for the course here is that the renter pays the fee, then you can feel good about your new knowledge that the Times gives an example that says that the landlord now pays the fee on about 1 out of 5 apartments.
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