Agent hasn't rent out our duplex 3 weeks after closing

Agent hasn't rent out our duplex 3 weeks after closing

Rental Property Investor · Burlington, MA · Member since 2017 · 34 posts · 7 votes

Our buyer’s agent offered to list our duplex for rental with the commission paid by tenants. However, it has been 3 weeks after closing but there has been no deal despite activities of showing and open houses. We are seeking advice on how we should handle this situation.

More details:

The rental was not listed until several days prior to closing as our agent indicated that he didn’t want it to span too long, and it was not convenient to show the property as he had to call/text the seller each time. However, our friends who are also buying rental properties said their agent always started renting activities early on and usually had a lease in place at the time of closing. We were contacted by other agents who offered to lease the property, but we turned them all down as we thought our buyer’s agent has the better access and knowledge than others.

To help with getting the property rented, we listed the property at some other places by ourselves and were directly contacted by many potential tenants contacted us. We told our agent that we were doing this and the plan was we would eventually refer the candidates to him. Most often, when we told the candidates that the lease must be done through an agent and commission needs to be paid to the agent, they shied away.

An Exclusive Rental Listing Agreement has been signed for one of the two units, with a term ending in September 30.

We believe that our agent made efforts on protecting us from bad tenants. An example is that a group of people didn’t bring cashier’s check for upfront payment as they agreed, so he didn’t give keys to them and requested cashier’s check. Those people never came back.

The period for graduate school students' rental has been missed given we are at mid-September. We could have better grasped these opportunities as the P&S was signed in mid-July.

Rent has been reduced by $200 during these 3 weeks.

The first mortgage payment of about $3000 is due on Oct 1.

Some thoughts:

We have to do something to prevent further loss. We now are considering trying to make deals by ourselves without involving the agent. The property will be obvious more attractive without additional fee charged to tenants. My husband wants this to be done in a courteous way without irrigating our agent, but we don’t know how.

Are we obligated to pay some gratuities to him for his efforts in renting? If so, what would be an appropriate amount? (He had received over 10 grands commission acting the buyer’s agent though.)

Though there are improvement could be done to the property (install an additional bathroom, update kitchens, add compressor for A/C), given we bought it at a retail price, probably it’s not an option to make these updates and sell it.

Any advice would be greatly appreciated!

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Ottawa, IL · Member since 2016 · 242 posts · 107 votes
9y

@Shirley X. - I hate to say this, but 9 times out of 10, it's not the agent. Now, this may be an exception, but likely it's not. Usually it's something to do with the place, location, etc. However, your agent should be sharing this with you. (i.e. kitchen too small or busy street or too dated, etc)

Speaking from personal experience, when I have a residential rental, I get emails, calls, and leads up the ***. Like really, you can't even imagine it. However, contacting those back, like 95% don't even get back to me! Of the ones that do, another 95% don't fit the criteria (think: very very unqualified tenants, pets when it clearly says no pets, etc). Then, of the ones you do show it to, most you never hear from again (even ones that say they will rent asap!) It's honestly a really crazy thing!

Now, moving on, I don't understand the making the tenant pay thing, I've never heard of it. In our market (and to my knowledge every market) the seller is responsible for commissions and here it's typically 1 month's rent divided between the 2 agents (him, the listing agent, and the other one that brings it it. So more motivation for him to find the renter). So my thought on this, is he planning on "charging" the tenant that extra amount? That could surely be turning potential renters away! I would ask about this. Also, check the comps, are you competitively priced for what you offer? It might be too much in general and that's what people realize and turn away.

Another few tips, when you guys personally get leads, either explain it better to them (say it's no cost to you, if it isn't, which it shouldn't be!) or just tell them he's your guy who takes care of that department and leave it at that. Most renters are used to that set up, you have to speak their language. They still maybe never to heard from, and that could just be the nature like I explained above, or it could be him. I assume if you're using him and liked him when you worked on buy side it would be the same (unless he just doesn't think he's making enough money off it and it's not worth any work). I think that answer is more personal.

Which is my final point. There should be no commission unless he finds a tenant, per contract. So you can cancel at any time if you think he's not doing what he should. I would strongly recommend you try to discern that first or communicate these concerns you shared with us with him, and give him a timeline. Again, take in to account this may not be his fault and try to treat him like a human being =) You'd be surprised how many times people take their frustrations out on agents when it's their decisions on pricing or not fixing/updating! So I feel pretty biased in this and feel obligated to say check all the other potential issues off the list before blaming the agent! =)

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  • Rental Property Investor · Edison, NJ · Member since 2016 · 753 posts · 565 votes
    9y
    If you rent it yourself and do not use the agent I would not pay her anything. I would offer words of thanks instead. The reality of work for agents is they spend time showing homes but it does not always result in a rental or purchase agreement. If they do not make the sale or in this case a tenant then they lost out on their commission. Another option could be is to pay the fee instead of passing it on to the tenant. That is what I did with our rental property and it was rented quickly. It appears that this issue has turned away potential tenants at your property.
  • Ottawa, IL · Member since 2016 · 242 posts · 107 votes
    9y

    @Shirley X. - I hate to say this, but 9 times out of 10, it's not the agent. Now, this may be an exception, but likely it's not. Usually it's something to do with the place, location, etc. However, your agent should be sharing this with you. (i.e. kitchen too small or busy street or too dated, etc)

    Speaking from personal experience, when I have a residential rental, I get emails, calls, and leads up the ***. Like really, you can't even imagine it. However, contacting those back, like 95% don't even get back to me! Of the ones that do, another 95% don't fit the criteria (think: very very unqualified tenants, pets when it clearly says no pets, etc). Then, of the ones you do show it to, most you never hear from again (even ones that say they will rent asap!) It's honestly a really crazy thing!

    Now, moving on, I don't understand the making the tenant pay thing, I've never heard of it. In our market (and to my knowledge every market) the seller is responsible for commissions and here it's typically 1 month's rent divided between the 2 agents (him, the listing agent, and the other one that brings it it. So more motivation for him to find the renter). So my thought on this, is he planning on "charging" the tenant that extra amount? That could surely be turning potential renters away! I would ask about this. Also, check the comps, are you competitively priced for what you offer? It might be too much in general and that's what people realize and turn away.

    Another few tips, when you guys personally get leads, either explain it better to them (say it's no cost to you, if it isn't, which it shouldn't be!) or just tell them he's your guy who takes care of that department and leave it at that. Most renters are used to that set up, you have to speak their language. They still maybe never to heard from, and that could just be the nature like I explained above, or it could be him. I assume if you're using him and liked him when you worked on buy side it would be the same (unless he just doesn't think he's making enough money off it and it's not worth any work). I think that answer is more personal.

    Which is my final point. There should be no commission unless he finds a tenant, per contract. So you can cancel at any time if you think he's not doing what he should. I would strongly recommend you try to discern that first or communicate these concerns you shared with us with him, and give him a timeline. Again, take in to account this may not be his fault and try to treat him like a human being =) You'd be surprised how many times people take their frustrations out on agents when it's their decisions on pricing or not fixing/updating! So I feel pretty biased in this and feel obligated to say check all the other potential issues off the list before blaming the agent! =)

  • Shawn AckermanPro Member
    Real Estate Entrepreneur · Mid West, East Coast · Member since 2015 · 3k+ posts · 1k+ votes
    9y

    @Shirley X. how mich experience does the agent have. What metrics  did you use when vetting the agent?

  • Rental Property Investor · Clarkston, GA · Member since 2012 · 2k+ posts · 1k+ votes
    9y

    I self manage 38 rentals spread over the North half of GA, some 20 min away, some 1hr some 1.5 hr.  Its all done via text, little effort per month...   Which leads me to advice new landlords to self manage so you know the business, you learn how to screen tenants, learn how to screen for financially strong tenants who will stay many years.  There's ways to screen such that you follow FAIR Housing laws, yet filter for the best tenants.

    I recomend you put up a parallel effort to market.  Put up your own rental ad on postlets dot com , get a google voice number to bounce to your cell phone, us the google voice number in your ads.  Then use a web based application taking service like rentmarketplace dot com to take applications and do credit check.

    Read in the landlording forums on how to screen, write your ad (besure to put your written requirements at the bottom of your ad so applicants know before they call).

    In time you may decide to turn over management to a property manager, or an agent.  My suggestion is that you need to know the business of being a landlord, before you outsource the most important role, screening for tenants to someone who has NO interest in putting top tenants into your place.  Why aren't PMs motivated to pick top tenants?  They get a fee for placement right?  More fees for managing contractors to fix things right?  The PM contract is upside down and not in the landlords best interests!  

    Am I saying PMs (and managing agents) aren't any good, its easy, they don't earn their fees??  Heck NO its hard and thankless being a PM or managing agent placing tenants.  I am saying that landlords need to do this important role themselves for a few years before they start complaining about 3 weeks of vacancy.  LOL

    Plus they may find like I have that self management is not that hard and its best keeping that role within the landlords business and not outsource the MOST important function in a land lording business, selecting and retaining good tenants.

  • Jennifer T.Pro Member
    Investor · New Orleans, LA · Member since 2014 · 1k+ posts · 944 votes
    9y

    Unless it is pretty standard in your all's area for a tenant to pay an agent's commission, I doubt there would be many (if any) people willing to rent the apartment under those conditions.  I've been a renter in three very different parts of the country (San Diego County, Miami, New Orleans) and, if a potential LL had told me I needed to pay a commission to their agent to rent the place, I would have looked at them like they had 3 heads and quickly moved on.

    I have heard of this kind of thing in places like NYC.  Places where there is a severe housing, much less affordable housing, shortage.  But the fact that potential tenants seem to be balking when the subject of paying the agent's fee comes up, leads me to assume that this is not the norm for where this home is located. 

  • JD MartinBusiness Member
    Moderator
    Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
    9y

    If you have plenty of activity but no requests to rent, the cost is too high in perception to what the tenant is getting or giving up. Back when I was a renter in the military I never heard of the renter paying a commission to the agent for the privilege of renting the house. To me, that's a cost of doing business, and if I was having the renter pay it they would never know it because it would somehow be built into the rent costs. One of the rules of successful selling is that the price has to be transparent. Added fees muddy the water and make people uncomfortable. If the fee for the tenant is going to be, say, $1200, just raise the rent by $100/month and pay the agent yourself. 

    Also, if you are in a seasonal market (I am, with our huge season being April-August as this is a university town), you might have to price according to the season. 

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  • Real Estate Broker · Temecula, CA · Member since 2014 · 992 posts · 782 votes
    9y

    Just my opinion here, but you are trying ot get a tenant, but you are asking the tenant to pay the fee.

    The agent is working for you and providing a service to you, you should be paying the fee to get the place rented.

    Most places do not charge a tenant a placement fee (Application fee yes, not a placement fee) so they may wonder what else you are going to be charging them that is not customary.  DOnt charge tenant.  Im sure the 3 weeks of lost rent is way more than the fee you were trying to save.

    Best of luck.

  • Investor · Newington, CT · Member since 2015 · 9 posts · 3 votes
    9y

    If you signed an "exclusive right to ..." document with the realtor, you will have to pay them their fee wither you rent it or they do. Before you rent it, it is in your interest to figure out what contractual obligations you have to the realtor. If you are obligated, you need to either get on them or their managing broker that they are not doing their job, and possibly at that point request the exit of the contract that obligates you to pay their fee.

    Personally, I just posted on Zillow, which also posted on Trulia. that is how I just rented my house. 

  • Property Manager · CT · Member since 2014 · 687 posts · 329 votes
    9y

    There could be a few things going on:

    1. Is your asking rent high for the market? What are other rentals charging for similar properties.

    2. Are you competitive in what you require for security deposit?

    3. Is your criteria too stringent?

    4. If you get lots of showings but no takers then something may be wrong in the apartment.  Is it clean enough? Freshly Painted?

    5. Is your agent lazy?

    In Bridgeport CT we are headed into the slow season fall and winter.  That may be the case for you to. 

    It's important to keep close communication with your agent to get feedback on that prospects are saying. 

  • Real Estate Agent · Stoneham, MA · Member since 2016 · 20 posts · 26 votes
    9y

    @Shirley X. What town/city is the building in? Depending where exactly the house is the reality is most Graduate Students/Young Pro's are looking even earlier than late July or early August. Timing, pricing and location will be the biggest factors in getting your apartment rented and unfortunately now you can't change two of those. If you could give specifics of the building (layout, e.g. 5 room 2 bed) and pricing desired I might be able to provide you with more constructive opinions. 

  • Developer · New Orleans, LA · Member since 2015 · 1k+ posts · 898 votes
    9y

    @Shirley X.  I believe it is a huge mistake to ask the tenant to pay the commission. Your agent is likely looking for a one (1) month commission.  That would mean your new tenant would have to come up with at least 3 times the rent to move (1 month deposit, 1st months rent and 1 month commission).  That is why you have not applicants.

    Some of your comments about the agent alarms me.  For example, why would any tenant go thru the entire process only to walk when your agent demanded cashiers check.  That makes no sense, and I would suspect that never happened. 

    Unless you are prepared to pay the commission, you are stuck with the listing agreement you signed. If you can get our of the listing agreement, I would do that ASAP.  I would seriously consider managing this one yourself.

  • Amy KendallBusiness Member
    Real Estate Broker · Lehi, UT · Member since 2016 · 397 posts · 318 votes
    9y

    Since you only have the rental listing agreement on one of the two units, I would suggest you start by listing the other unit and managing it yourself if you are willing to do so.  If you are up for doing the screening and management by yourself, you will be able to learn much more about your rental market.  In addition, by talking with potential tenants directly, it will help you quickly determine what exactly is preventing the unit from being rented.  If you can get the one unit rented quickly, it will help with your upcoming mortgage payment.  If you receive a lot of interest, you could also possibly fill your other vacancy as well by waiting until after Sept. 30 when your agreement expires. 

    I manage all of my rental properties and a few for other investors as well.  I usually start advertising for tenants well before we close on our loan.  On our last rental property, I was able to bring a signed lease to the bank two weeks before our closing date.  There are many reasons to manage your own rental properties, but being able to fill vacancies when and how I choose is definitely one of the greatest benefits to me.

  • Investor · United States · Member since 2015 · 415 posts · 487 votes
    9y

    Is it normal for tenants to pay a placement fee in your area?

    If I did that, I would stay vacant even through the zombie apocalypse. 

  • Investor · Plymouth, MI · Member since 2016 · 48 posts · 70 votes
    9y

    It's not me, it's you!    

    It's the famous blame game.  Is it the broker or the owner?  

    In this day of technology, it is unlikely that the best use of a broker's time is to go cold call clients.  Instead it is having tight systems and processes to produce a predictable outcome just doing the things they are supposed to.  Easy to say.  Hard to do.  

    Questions for your Property Manager.

    1)  Are the pictures professional - Take a look... if they are not shot with a 35 mm, edited and virtually staged... they didn't put a lot of effort in.  This is the number 1 driver of leads.  Period! 

    2)  Copy - Does that first sentence have a compelling unique selling position?  Does the copy draw emotional involvement?  Is there a call to action in the last sentence that creates urgency?  If the copy is 2 sentences, all caps or speaking to why a tenant should NOT rent there... it's no good.  (like... no dogs, no cats, must have credit app, must have great job, must be handsome etc etc)

    3)  Process to Answer Calls - What percent of calls are picked up in 60 seconds or less (needs to be 90% of the time or better... we are at 93% in 30 seconds).   Shop your listings.  Call 3 or 4 times in one day and see  how fast your call is picked up.  Did you leave a message?  Ehhh ohhhh!  If they had to leave a message they just rented your competitors home.  We get TONS of tenants just because the home they liked better didn't call them back and they have to move fast.     

    4)  How many times are potential tenants called back to set up a showing?  We call 5 times at staggered times through out the day if they don't pick up the first time, then drop it.  We found that after 5 it's a pretty low conversion.  In addition, we text each time to.  We can give you recordings of the calls and copy of the text message, can your broker?  

    5)  Who is doing the showings?  We believe great people sell more.  Do you have a closer that is speaking with the tenants?   How many did they rent last month?  If it's below 10 homes rented last month run.  They are want to be sales people.  Our top person did 30 last month.  Don't you want her?  

    6)  Is there a simple electronic process for the tenant to apply?  The next step is clear after they express interest in the home.  If they are trying to get manual signatures and paper checks then tenants will be turned off just by a bad process.   

    If your property manager is CRUSHING the things listed above, then they have the right to look at a pricing strategy.  But if your manager is falling short on even one of the issues above, it is them not you.

    However, if your manager is doing everything above (I mean really doing it) then the pricing strategy may need to be considered.  Take a little less now, get er rented and increase rates later.     

  • Real Estate Investor · Encinitas, CA · Member since 2016 · 3k+ posts · 3k+ votes
    9y

    @Shirley X. I think my feedback would be the same as most of the others, you could be stubbing your toe around the "commission paid by the tenants".  Again, in some cases like NYC you get some form of this.  However, in most geographies that I'm aware of, it just doesn't exist.  You also have to ask yourself (on the pragmatic side) about the financial impact of making the the renter pay the commission.  It's effectively increasing the rent by 8% but you're making me (the renter) pay it all up front.  So even if I like your unit at $1,100 per month, once I find out that I'm paying a commission it basically makes it feel like it's going to run me $1,200 per month.  Why wouldn't I go out and rent a (potentially) better place for $1,200 and not pay a commission?

    Worse, unless it's disclosed in the rental advertisement, your potential tenant is getting "surprised" by this additional fee during the application process.  Nobody, and I mean nobody, like to find out about "surprise fees" during any purchase.  Again, application fees are generally "normal" but unless renter-paid commissions are "normal" in your market it might explain a few things.

  • Real Estate Agent · Stoneham, MA · Member since 2016 · 20 posts · 26 votes
    9y

    @Jim D. without saying what is "normal" it is a huge part of the rental market in this area. The reality though is it does sway applicants decisions, especially in the non-peak seasons. If directly in Cambridge (Harvard, MIT, Tech booming area) or similar "hot" areas and in the prime season any tenant would be hard pressed to find an apartment by owner without the fee. Even if they did find the one diamond in the rough apartment they would be one of a pile of applicants and still have slim chances of being the lucky person. That being said come August/September landlords facing vacancy are forced in between a rock and a hard place. Many have grown accustomed to having a completely free showing/screening/leasing service at their disposal and still value using Brokerages at which point many are willing to pay half the fee or the entire fee to get the apartment rented. The reality is that most tenants are not stupid. If your apartment is $2,000 and requires a full fee it in theory is more expensive than a similar apartment listed for $2,150 without a fee. This is with the assumption that they move out after the first lease, which not many do but seems to be the logic they use.  

    I agree with @Amy Kendall do whatever you can to get the other unit rented and do it personally so you can gauge peoples reactions. If you need help screening most Brokerages will do the paperwork portion of the deal for a flat fee closer to $200-$300 as opposed to an entire months rent. Often times when people purchase an investment property in this area in the off-season you take a bit of a bath the first year with the understanding that the leases will end back on the correct cycle and you will be able to substantially raise rents back to market. I would make sure you have a renewal clause in your lease of either 90 or 120 days prior to the expiration. 

  • Property Manager · Dalla, TX · Member since 2015 · 8 posts · 1 vote
    9y

    @Shirley X. A $3000 payment does not sound good! Sorry! My advice if you need an immediate fix is try listing the duplex on a site like Airbnb or HomeAway until you find permanent tenants. It will certainly reduce your losses. The Airbnb market is HUGE! 

    I Airbnb one of my rooms (Dallas, TX) for $50/day and it is booked 20 days out of the month. 

    Thats $1000/month for ONE room.

    It does require a furnished home but you eliminate the chances of long term bad tenants and can get paid more than what you intend your rent to be. Where is your duplex? You can research the current rate of houses in that area.

    As for your buyers agent, If he did not deliver he should not get paid. Thats how business works. The conversation should be brief and to the point. "We appreciate your efforts, however you did not deliver. We will take it from here. Thank you." 

    Hope this helps!

    Best of luck!

  • Frisco, TX · Member since 2017 · 201 posts · 95 votes
    9y

    I didn't read the whole thread but here's my advice. Cancel the contract with the agent. If s/he gives you static, talk to their broker. There is no reason your property should be empty so long.

    As someone who has been an agent in the past and has rented now 3 different properties here in TX (for my personal use), I am extremely surprised that your agent thinks the tenant is going to pay the commission. Personally, I would never rent a place where I had to pay the commission. That's akin to listing a house for sale and thinking the buyer is going to pay your agent's commission.

  • Investor · Winter Park, FL · Member since 2017 · 171 posts · 165 votes
    9y

    As others have said, why on earth would a tenant agree to pay YOUR agent?  If I'm a potential tenant, unless it's an area w/ a severe housing shortage no way am I paying your agent, no way would I even entertain your property after hearing that, it would be an immediate deal breaker.

    IMO if you want to use an agent, you pay them.  But if you live in the area and are able to I think you should strongly consider listing it yourself, as @Curt Smith said you will gain valuable experience and you are motivated to get a good tenant, an agent is incentivised to get the place filled and get his fee.  Read the ultimate tenant screening and how to rent your home guides stickied at the top of this forum.

  • Frisco, TX · Member since 2017 · 201 posts · 95 votes
    9y

    @Shirley X.  _ I sent you a colleague request

  • Joel OwensBusiness Member
    Moderator
    Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
    9y

    I read some of this.

    Point number 1: Unless the agent is a principal broker they likely DID NOT get all of that 10k commissions. After business costs, paying a cut to their broker, and paying taxes they received very little. Usually it's the same thing with a rental fee as well they are giving some to the brokerage.

    Point number 2: Unless it specifically says in the purchase and sale agreement that you were allowed to market the property for rent while under contract then you are not generally allowed to do so.

    Point number 3: If the property needs to be rented right away to make it a viable investment then the property should not have been purchased. When people do residential type investing they need many months of reserves after the purchase. When investors get desperate and need cash now is when big mistakes happen that plunge them further down a hole and very hard to recover from.

    Point number 4: WHO had the idea that the tenant pay the leasing commission? That is crazy. With residential tenants decisions are usually emotion based. It's not if you are getting more money out of them or not it is the PERCEPTION if you are or not. The tenants perception is THEIR reality no matter what is actually real or not. Right from the start when you say the tenants pay a commission the perception is you then are deceiving them and taking advantage right out of the gate. Even if they like the location and property they do not trust you the landlord before they even get to a lease application stage. Lot's of renters tend to have rough life experiences so are ultra sensitive to anything that is perceived as taking advantage of them. It's all in how you position something to make the future tenant  feel like they are getting a great value.

    Point number 5: One poster mentioned they self manage many properties. They are also located in a state that is very landlord friendly. The tenant doesn't pay rent you can often get people out in GA within 30 days time and sometimes takes 60 total. In a place like Massachusetts that is very tenant friendly state for residential land lording. You put the wrong tenant in and can have many,many months of lost rent and legal fees.

    Point number 6: You could still have the external leasing agents bring tenants. They could just split the fee with your agent. Hopefully your agent did not talk you into buying this property because they needed the check. They might just not have the experience for investment properties to analyze them for clients and help get rented out. If both parties the buyer and the agent are newer with limited experience even if they try their best that might be a recipe for disaster. At this juncture it can be easy to point fingers at other parties and lay the blame there as people do not want to face their own possible short falls and areas that might need improvement.  The focus should be on getting the investment stabilized instead and performing.

    Point 7: You need to go tour some other rentals and look at comps for rent rates to see what your competition is. Are they asking 800 a month for instance and location is same, superior, or inferior? Do they have granite counter tops when you have laminate? Better design and layout? If your property is old and dated compared to other properties and location is the same then you either have to put lot's of money in to update the unit or you need to reduce the rent rate toward bottom of the market so someone will rent it. An exception would be in a strong rental market where limited inventory exists. Renters might be less picky just to get something. 

    Having a leasing broker bring a long time quality tenant to the table can be like finding Gold. I would focus less on the commission and  more on getting the best tenants for your property.

    Hope it works out well for you. I have heard hundreds of these same stories over the years and many times it does not end well but I hope this is the exception. 

    No legal advice given. 

  • China, ME · Member since 2014 · 3k+ posts · 4k+ votes
    9y

    @Shirley X. I just checked MLS for rentals in Burlington. Of the 10 I looked at, 9 paid nothing to the renter's agent, meaning that the tenant pays at least that part of the commission, most often 1/2 month. It's possible, but not specified in the listing, that the tenant pays both sides.

    That means that the tenant pays first, last, security plus another month's rent as commission.  That's 4 months, up front.

    In the other one I looked at, the landlord's agent is offering $1,000 to the renter's agent on a $2200 monthly rent.

    These things vary by area in MA.  In my limited rental experience, the landlord pays both agents in a minority of cases.  Most often, the landlord and tenant each pay their own agent.  In a large minority of cases, the tenant pays both agents.

    There's no strict guideline and the commission arrangements are certainly not governed by law, except that any commissions paid by the tenant must be disclosed in writing and have the tenant's signature approving it.

    If you rent it yourself and have signed an "Exclusive Right To Rent" agreement with your agent, you will still owe the commission.

    As an aside, I try very hard to stay away from rentals.  They're a LOT of work for very little compensation, which might explain why you're not getting the attention you deserve from your agent, if in fact, that really is the case.  

    It could also be that there are things like pricing, features and location that are making it hard to find a tenant.

  • China, ME · Member since 2014 · 3k+ posts · 4k+ votes
    9y

    @Shirley X. One other point - many of the commenters here are telling you to cancel your listing contract.  That is potentially bad advice.

    Contracts are between two or more parties.  Valid, enforceable contracts cannot be unilaterally cancelled by one party without the consent of the others, unless there's a breach of the terms.

    In other words, your agent is under no obligation to cancel the listing contract, unless they either consent to it, or there are terms governing cancellation in the contract language itself - normally an expiration date of the contract.

    Another poster suggested that the contract may prohibit you from marketing the rental on your own.  That could be true, but is highly unlikely.

    Much more likely is that you've signed and "exclusive right to rent", which doesn't prohibit you from marketing your own rental, but does mean that a commission is due to your agent regardless of who brings the tenant.

    Finally, many have commented that they think that asking the tenant to pay the real estate commission is silly and may be damaging your chances of finding a renter.

    This is a case where different markets have different practices.  In the Boston area, it is FAR more common for the tenant to pay one or both agents than for the landlord to pay both.  

    In fact, of the 10 rentals I just checked on MLS in your town, only one offered any compensation from the landlord to the renter's agent.

  • Rich N.Pro Member
    Investor · Haverhill, MA · Member since 2015 · 761 posts · 328 votes
    9y

    @Shirley X.

    Where is your property located?

    For a lot of folks posting here, believe it or not in Boston central with a tight market... the tenant pays the full month commission or at least half.   Because they want a good/great apartment and most of those are owned by the big investors and that is how they do business through the realtors. 

    Other posters thought the $3K rent was outrageous, not in downtown locations.  On average its 800-1100 a bedroom (easily). Even bedrooms in not so great suburbs are getting 500 a bedroom.

  • Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
    9y

    Some things you just have to do yourself.  For beginners especially, the 'work ON your business not IN it' rhetoric is a good way to go broke and be perpetually frustrated.    Most of the time you end up stroking big checks and wait and lose control and have to go back and fix it anyway.

    No way I'd wait on somebody (who has no skin in this and doesn't really give a rip) to do this for me while taking forever and getting a month of rent for the privilege. Not this. This is your purpose for this business.  Your primary income source.  Your reward for all your work. You've got to be kidding me!  Outsource anything but this.

    You can splice and dice the buyer's agent commission all you want on the purchase, Joel. He got this, the broker got that... In the end, Shirley didn't receive a $10,000 reduction in price or other concessions because of the layers of agency.   While the commission each extra mouth in the middle got may have been little, the savings principal buyers can realize by being educated and doing a little themselves can be significant.  In this case, at least $2500 per hour.

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