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First of all, want to make clear that there are states that commission rebates are illegal and other states are not. In my state of FLORIDA, commission rebates are NOT illegal. Please check it out in Department of Business and Professional Regulation Rule: 61J2-10.028 where it says rebates are not illegal. Also check out in the following link of Dept. of Justice where you can see what states rebates are illegal and in what states are not.
That said, here is a fact: All Realtors have access to the same information and the same inventory in properties for rent or sale. All Realtors are going to give you the same information regarding rental properties. Other Fact: is mandatory for every prospective tenant to pay for credit report and criminal background check and this is a fee that is charged as an "application fee". Also, if the rental property is subject to homeowner's association, there is a separately fee for that.
Now, after you knowing this:
If you are a looking to rent a residential property, and see that there are hundreds of Realtors promoting residential rental properties, will you stick with a Realtor that offers you a commission rebate (example) $100? knowing that the 95% of Realtors don't give any rental/tenant commission rebate? $100 commission rebate for residential rentals between $1,500 and $2,000. Rentals over $2,000 would be higher commission rebates.
1) If the answer is yes: Would you fill out an application form for residency and pay the application fee (for credit report and criminal background check) BEFORE that Realtor will show you UNLIMITED rental properties until you find the one you like? if the answer is no, why?
2)If you don't care in getting a commission rebate after you sign a lease contract, what are the qualities you look in a Realtor in order for you to stick with one Realtor in particular?
Thank you SO much for your honest opinion and detailed answers!
Ps: I would prefer the opinions of people different than Realtors. Thank you.
Please vote in my poll above! thanks!
Last edited by Anyelina; 04-20-2011 at 08:32 PM..
Reason: Adding poll
I usually look for properties that aren't listed with a real estate agent because I don't want to pay first, last, AND SECURITY.
For the most part (with the advent of discount MLS, Craigslist, backpage, classified ads) there's no reason to use a real estate agent unless the property you want has an exclusive.
I've only used one twice and that was because I was choosing a home across the country and the agent was a personal friend, while the other time it was in Chicago where they generally don't ask for three times the rent to move in.
If I'm renting out a place I use the said marketing venues aforementioned, criminal background checks are forty bucks online...
IMO unless you're dealing with complex deals that require a third party to buffer the deal or luxury homes over a certain value real estate agents aren't my favorite.
I understand what you mean about the first, last and security. However, in the landlord's perspective, they ask these 3 in advance because there are a lot of people that have poor credit and mostly, because they suddenly can't pay the rent (they lose their jobs for example). Also, there are a lot of tenants that don't take care of the properties and that's why they ask for the security deposit.
The most of the ads you see on Craigslist, Backpage, etc, are from Realtors. Actually, there are a lot of SCAM ads on this section, from people that claim to be a Realtor or a real Homeowner renting as "for rent by owner". I have met in person people that have been scammed through Craigslist.
About the criminal background checks you can pay online, that's true. I personally think is really bad that Realtors (actually their brokers) charges from $100 non-refundable application fee to pay the credit report and background check and they take the rest of the money for "administration fees". I think $25 to $30 the most per adult (for both reports) is the fair price. That's the application fee I'm talking about in the original post of this thread.
So what you are saying is, that you prefer not working with a Realtor who will represent you even though you are NOT going to pay for its services (the landlord is who pays the commission for both agents)? and even you are not paying for its services and actually you are getting money from the commission's agent who is representing you and you still not interested in working with this Realtor? Would like to know your reasons.
If you don't want a Realtor and prefer to deal directly with the landlords, that's respectable. But I think you would be in disadvantage and have to do a lot of work on your own, like making sure the property is not under foreclosure or have any liens, to make sure that you are not going to be thrown out of the property by the bank even though when you sign the lease there was any default by the landlord, you wouldn't know how long that property has been for rent on the market and being able to negotiate the price, among other things. If you don't want to deal with Realtors, then you will be missing a lot of good properties that could be the perfect one you are looking for.
Now, if you are talking as you are the landlord, don't want to pay a commission and want to rent it and show it on your own, that's also respectable. But there are a lot of people that prefer to work with an agent who can represent them because they feel safer, want someone to help them check the title, check if the property is not under foreclosure, etc, fill out properly the lease contract, terms, clauses, on their behalf and be protected in case something happens. And all of this for free.
I understand what you mean about the first, last and security. However, in the landlord's perspective, they ask these 3 in advance because there are a lot of people that have poor credit and mostly, because they suddenly can't pay the rent (they lose their jobs for example). Also, there are a lot of tenants that don't take care of the properties and that's why they ask for the security deposit.
The most of the ads you see on Craigslist, Backpage, etc, are from Realtors. Actually, there are a lot of SCAM ads on this section, from people that claim to be a Realtor or a real Homeowner renting as "for rent by owner". I have met in person people that have been scammed through Craigslist.
About the criminal background checks you can pay online, that's true. I personally think is really bad that Realtors (actually their brokers) charges from $100 non-refundable application fee to pay the credit report and background check and they take the rest of the money for "administration fees". I think $25 to $30 the most per adult (for both reports) is the fair price. That's the application fee I'm talking about in the original post of this thread.
So what you are saying is, that you prefer not working with a Realtor who will represent you even though you are NOT going to pay for its services (the landlord is who pays the commission for both agents)? and even you are not paying for its services and actually you are getting money from the commission's agent who is representing you and you still not interested in working with this Realtor? Would like to know your reasons.
If you don't want a Realtor and prefer to deal directly with the landlords, that's respectable. But I think you would be in disadvantage and have to do a lot of work on your own, like making sure the property is not under foreclosure or have any liens, to make sure that you are not going to be thrown out of the property by the bank even though when you sign the lease there was any default by the landlord, you wouldn't know how long that property has been for rent on the market and being able to negotiate the price, among other things. If you don't want to deal with Realtors, then you will be missing a lot of good properties that could be the perfect one you are looking for.
Now, if you are talking as you are the landlord, don't want to pay a commission and want to rent it and show it on your own, that's also respectable. But there are a lot of people that prefer to work with an agent who can represent them because they feel safer, want someone to help them check the title, check if the property is not under foreclosure, etc, fill out properly the lease contract, terms, clauses, on their behalf and be protected in case something happens. And all of this for free.
Thanks for giving your opinion!
Now you see, when I'm looking on Craigslist I avoid the real estate agent ones, plus most are just agents spamming properties they don't represent as the owner's agent.
Plus first, last, and security isn't all going to the landlord. First and last is, that security is for the agent to post an ad on Craigslist and say "here's the bathroom", then run your credit. So saying that I'm not paying for it is dishonest I am, I'm paying an extra month's rent for it.
It took me ten minutes to draft the lease I have right now. Only paid two months rent to move in.
I think the Internet is making agents less relevant. Again, just my opinion. I've been known to call rental agents "relitters". Find a home isn't that complicated.
EDIT: It also only took one day to drive in between all of the houses, give my credit report, make the lease, and give the cashier's check. I pay for experts when needed, I pay people to delegate many things in my life... Yet, renting a house is no harder than purchasing a used car. Private party transactions are easy.
Last edited by carrypositive; 04-20-2011 at 10:33 PM..
Now you see, when I'm looking on Craigslist I avoid the real estate agent ones, plus most are just agents spamming properties they don't represent as the owner's agent.
Plus first, last, and security isn't all going to the landlord. First and last is, that security is for the agent to post an ad on Craigslist and say "here's the bathroom", then run your credit.
It took me ten minutes to draft the lease I have right now. Only paid two months rent to move in.
First of all, agents don't "spam" properties. They are legally allowed and permitted to advertised properties because when the owner signed the listing agreement, they agreed to pay the agent who brings the tenant and therefore the owner agreed his/her property to be advertised.
Second: Not all of the properties listed with Realtors ask for first, last and security. That depends on the landlord if s/he wants the 3 or just 2 or even just the first month.
Third: If the security (actually its not the security, is the first month's rent) goes to the Realtor or not, why you care? you are not paying any Realtor's service and you are not losing any money here. Is the landlord who is paying for this, not you. You pay to the landlord for what you have to pay. If the landlord wants to pay to a Realtor, is his/her money and is his/her problem, not yours. If you pay for the first, last and security, then you are liable for the 3 of them. On your last month of the lease, you don't have to pay the rent because you already paid for it when you sign the contract. If you leave the property without any damages, you will get the full money of security deposit back. So you are not "wasting" money here and paying any Realtor. Is the landlord that actually is paying not only the agent who is representing her/him but also the agent who is representing YOU.
Last: Maybe you know the contracts, addendum and legal issues well enough that you can stay out of trouble, but very of the non-agent general public does. There have been a lot of law suits between tenants/landlords just because they find out that one has agreed to something they didn't think they agreed to and/or they don't know their legal responsibilities. That's why Real estate companies by law have to file at least for 5 years lease contracts in case these incidents happen, the agent or broker will support the client in court.
First of all, agents don't "spam" properties. They are legally allowed and permitted to advertised properties because when the owner signed the listing agreement, they agreed to pay the agent who brings the tenant and therefore the owner agreed their property to be advertised.
Second: Not all of the properties listed with Realtors ask for first, last and security. That depends on the landlord if s/he wants the 3 or just 2 or even just the first month.
Third: If the security (actually its not the security, is the first month's rent) goes to the Realtor or not, why you care? you are not paying any Realtor's service and you are not losing any money here. Is the landlord who is paying for this, not you. You pay to the landlord for what you have to pay. If the landlord wants to pay to a Realtor, is his/her money and is his/her problem, not yours. If you pay for the first, last and security, then you are liable for the 3 of them. On your last month of the lease, you don't have to pay the rent because you already paid for it when you sign the contract. If you leave the property without any damages, you will get the full money of security deposit back. So you are not "wasting" money here and paying any Realtor. Is the landlord that actually is paying not only the agent who is representing her/him but also the agent who is representing YOU.
Last: Maybe you know the contracts, addendum and legal issues well enough that you can stay out of trouble, but very of the non-agent general public does. There have been a lot of law suits between tenants/landlords just because they find out that one has agreed to something they didn't think they agreed to and/or they don't know their legal responsibilities. That's why Real estate companies by law have to file at least for 5 years lease contracts in case these incidents happen, the agent or broker will support the client in court.
Last response then I got to get off, but your argument that it's the landlord paying it and not you is moot.
If they have to pay it, they're passing it off to the tenant.
If you schedule to move out after 30 days notice on the first while leaving the property in broom swept condition you'll get back your security without having to pay an extra month (your last month).
Also by spam I mean the literal definition of spam: I don't need to see 10 ads all saying the same thing-a title describing the property then when you click it every ad is the same which is just a link to the website. Some of the agents just post a fake title then the ad says view properties on my website, then when you get to the website it's just a contact form.
I expect you to defend your profession, but you're not going to convince me to use a real estate agent EVER (unless I'm absentee or don't understand the market--in that case I probably have no business getting involved until I am).
Now, would someone who's never dabbled in real estate, doesn't understand probate, or the tax implications of structuring transactions a certain way need an agent? Probably.
But, I've dealt with MANY agents that know far less about structuring a deal than most savvy investors.
Rant End
Getting back to the original question.
If I was an absentee landlord and needed an agent I wouldn't look for an agent that rebates their commission. It makes them look desperate and not worth their fee. I'd also expect to maintain an existing relationship with them as a property manager (if it's commercial or on the high-end).
Good luck with your endeavors though, you'll probably be just fine job security wise anyways.
Apparently there are people out there who didn't even know what type of mortgages they were giving the banks.
The landlord is paying the Realtor, not the tenant. Unless the tenant have signed a tenant's agreement contract with the Realtor to pay the Realtor directly. But that's almost never the case. So please, stop saying that is the tenant paying the Realtor with the "security deposit" because that's incorrect. Actually by law, Realtors cannot get the commission from the security deposit. The security deposit is mostly deposited in a non-bearing interest account and the landlord CANNOT commingle that money or use that money different for what is supposed to. The escrow account can only give the first month's rent that is held in escrow to the landlord, and the landlord then has to pay the commission to the brokers, unless s/he has given permission to pay the commission from the 1s month's rent. But NOT from the security deposit.
"If you schedule to move out after 30 days notice on the first while leaving the property in broom swept condition you'll get back your security without having to pay an extra month (your last month)". You are getting the security back precisely because you are leaving the property without any damages and in a "broom swept condition", that's what a "security deposit" is about. And about the last month: if you have paid in advance for the last month when you signed the contract, then of course you don't have to pay it again in your last month. If you don't want to live the last month on the property, then its up to you but you have already paid that month. If you just pay first and security when you signed the contract (without the last month), and you decided to not pay the last month's rent in the last month, OF COURSE the landlord is going to claim the security deposit to pay that last month's rent. And you better leave the property in a "broom swept condition" without damages, otherwise the landlord can sue you for damages in the property. This is the reason why the most of the landlords ask the security deposit.
About the spam: that kind of ads are not spam. ARE SCAM. They are scammers that claim to be "Realtors" and they just want to get your personal information, (not helping you in renting out a property) or just want to convince you in buying rather than renting ("bait and switch"). If you don't like too many ads,then don't use Craigslist.
I'm not trying to convince you in using a Realtor. Actually after reading all your negative comments and hate toward Realtors, its better you don't work with any Realtor.
I am not quite sure where this thread is going but the landlord does have to build the cost of the management company/realtor into the cost of rent. Renting directly through the owner is indeed less expensive and my preferred method as well.
When you say that the landlord build the cost of the Realtor into the cost of the rent, you are talking about the amount of rent he is asking? or the money to move in? The amount of rent has nothing to do with the commission, the market establishes that.
I think that there is a confusion here regarding about these 3 (first, last and security) and people are associating that without a Realtor, a landlord is not going to ask for these 3, and working with a Realtor, a landlord is going to ask for these 3 in order to cover the commission. That's incorrect. Why? because a landlord can ask for these 3 regardless if its working with a Realtor or not. And also, there are landlords that hire a Realtor and just ask for 2 of them, not the 3. So please don't generalize. It depends on each landlord or developer.
If Realtors added no value and there was no demand for their services then they wouldn't exist. But the fact is, there are large numbers of them and lots of landlords hire them because they find their services useful. Working with an agent or don't, it's entirely up to you but when things falls apart and you need professional help, like an attorney, people see the value and finally they understand that saving a commission its not worth it. Just because nothing seems to ever go wrong doesn't mean never could happen.
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Thanks
