Sotheby's International Realty Donna Stockman

To Use a Broker or Not?

Manhattan does not have a Multiple Listing Service and brokers don’t share a common database of available rental listings. Landlords fall into a few distinct categories. There are landlords that own large buildings and have their own leasing offices where you can rent without paying a broker fee, there are both large and small landlords who will only rent through a broker who they rely on to pre-qualify tenants, and there are other landlords, typically the higher priced rentals over $5,000 per month, that are subject to exclusive listings.

This can make finding the right rental unit a frustrating and annoying process. Having an agent saves you time, and often allows you to rent an apartment you might not otherwise have been able to find. A good broker can help get you approved by a difficult landlord or coop board, negotiating financial terms, preparing the lease and processing all of the paperwork accurately and quickly. If you hire a real estate agent, the typical brokerage fee is 15% of the first year’s rent, and while that fee is generally paid by you, sometimes during a soft rental market, the landlord will pay the fee. While the fee can be costly, amortized over the total amount of time you live in the apartment, it may not add much to the monthly rent.

The majority of high-rise apartment buildings are owned by a handful of landlords. These are the buildings that typically have leasing agents on the premises who do not charge a fee if you view their apartments on your own. You should identify these buildings before you begin working with a real estate agent. You should also instruct your agent not to show you no-fee buildings if you plan to view these properties on your own. However, you should know these apartments come with a price premium. If you do see a property in a “no-fee” building, do not try to rent the apartment behind the agent’s back. Leasing agents maintain records and will notify the broker if you try to rent without him. It is important to be clear and honest with your agent at the start.

It is harder to find the charming non-doorman apartment without an agent. Many of these buildings are owned by small landlords who own one or a small number of buildings. Some of these apartments are rent stabilized which means that you may be able to rent the apartment for less than market rent for the property. These landlords typically have a relationship with a real estate agent or firm that they trust to find suitable tenants. This is also the case with some landlords who have many buildings. They simply prefer to rely on the real estate community to locate and pre-qualify tenants. There will always be a fee attached to those units.

If you are planning to spend in excess of $5,000 per month, or you want to rent in a condo or coop, you will likely see “exclusive” listings. These properties are typically listed by the larger brokerage firms who “co-broke” these listings. This means that they share their listings with other brokers and will split the commission with the broker who brings the tenant. At the very least, you should make sure that your broker is willing to co-broke in order to show you the widest range of apartments in the neighborhoods that fit your needs. You should confirm that your broker is showing you all listings, including those from other brokers.

Before you sign a lease on an apartment, stand outside the building at different times of the day and observe. Is it excessively noisy at certain times of the day or night? Is there a fire station nearby with sirens blaring? Feel free to ask tenants exiting the building if they like the building, if there are any problems you should know about and if the landlord and super are responsive. When you tour an apartment you like, be sure to make sure everything works.