Do you need to use a broker to find a decent place to live? It may seem to many of our readers that if you use a broker to find an apartment, you’re wasting your money, or you’re spoiled and not a “real” apartment hunter. In fact, I felt that way, too – until I used a broker. If you live in a large city with a tight rental market, you may be able to get a far better apartment, much more easily, if you use one. So let’s break down exactly what a broker is, and to whom a broker can be of use.
What Is A Rental Apartment Broker?
A rental apartment broker is someone who helps connect renters and landlords. Ideally, a broker will know the rental market like the back of his or her hand, and so when potential tenants approach a broker wanting a particular type of apartment in a particular area, the broker will be able to direct them to several suitable apartments. The service brokers provide is one of convenience and expediency – the broker cuts through the clutter and knows of more possibilities than the renter possibly could. Plus, depending on your city, the broker may have exclusive access to certain units – ones that you couldn’t approach alone.
How Does The Broker Get Paid?
It depends on the city. In Chicago, for example, brokers are paid directly by landlords – basically, brokers get the first month’s rent of wherever they place a tenant. Which means that in Chicago, brokers are free for apartment hunters. So, naturally enough, almost everyone in Chicago uses a broker – there’s a massive industry built around the practice. If you’re in Chicago, you use a broker.
Now, in New York, on the other hand, the tenant pays the broker. What’s that? you say. Yes, indeed, in New York, be prepared to pay a broker at least 10% of your first year’s rent for the privilege of getting placed in an apartment. Ironically enough, New York brokers’ customer service is far worse than that of Chicago’s brokers. Add this up and you see why there’s an entire culture in NYC that has developed work-arounds to using a broker – think shares and Craigslist.
Other major cities, such as Los Angeles, San Francisco and Boston, also have broker systems in place – and they tend to be a mix of tenant-compensated and landlord-compensated brokers, though with a predominance of New York-style, where the tenants pay the brokers directly. (And, keep in mind, that if you go with a “no fee” broker, who’s getting his or her cut from the landlord, you’re likely paying that fee back in slightly higher monthly rent.) So, yes, unless you’re in Chicago, using a broker can end up being fairly expensive.
Why Would You Use a Broker?
That was exactly what I wondered, until my then-girlfriend (now wife) Alissa and I were looking to move in together in New York. We needed to find a place that was totally empty – which prevented us from searching for shares on Craigslist, one of the primary ways to avoid a broker in NYC. What we found by ourselves was depressing – run down places with landlords who couldn’t even find the key to their own apartment. Buildings where stairs were missing, or where the floor sloped so sharply that you felt like you were going to slide right out the window. It was slim pickings. This is because in many cities brokers choke off access to apartments by non-broker means – the best apartments are only available through the broker system. Particularly in a tight market, there may simply be no way to see the majority of available apartments without one.