dealing with rental agent who wants double commission

9 Replies

Hello everyone, I'm pretty new here and I would like to jump to the story.

I have a property in upper state NY that the old tenant moved out about 1 and a half month ago.

talked with an agent , who really wants me to sell it and telling me I can only rent out for $2700/ month.

happens to know a local friend from the past who is a realtor now and she was telling me that she can rent it out for $3000.

She also says " with that amount, it would be difficult for the tenant to pay 1 month of rent+1 month of deposit+1 month of agent fee

(norms in local is tenant paying agent fee) So she was suggesting me paying her the agent fee instead of the tenant.

I did my math, found that I can still benefit from it. So I signed an agreement with her saying that

"if she is able to rent it out over 2900$ I can pay her the agent fee otherwise she will need to charge the tenant"

She did Put in her work and was able to find a suitable one quickly(who willing to pay $3000/month) .

However, she says "the tenant really wants to secure the place and thus want a two-year lease. And thus she needs to charge two months of rent as an agent fee for me and the tenant to split ."

I actually communicate with the tenant(from the phone number on the application) and he said he is ok with a year lease first. However, the agent chose to not express their will and still tell me that they want a two-year lease.
(she isn't involved in the management of the house, I have my own property manager)

Maybe because I'm an introvert that I didn't bust her lies out but keep telling her"I just want a year lease first."

I talked with multiple local agents asking this question (just finding them randomly on Zillow) while some of them say

"that depends on the contract" most of them saying" never heard about it" with one saying "that might be illegal" 

Did pay an attorney to look at the rental agent contract and he is pretty sure that she shouldn't charge me double. 

eventually, I sent her what lawyer told me to say and she reply basically saying 

" she has put in a lot of effort into helping me. She has a landlord who pays her 4 months of rent for signing a 4-year contract. I shouldn't miss on the two-year deal"

Yes, it is technically none of my business and I just feel it is not justifiable for her to take two months of rent as a fee. I talked with the tenant about it and he was really grateful and want to share the one month fee with me.

With the closing date coming tomorrow for July, I really don't know what to do at this moment beside waiting for the attorney to talk with me tomorrow morning.

I'm thinking about just signing the contract directly with the tenant for a one year lease (with us split the one-month agent fee and pays her)

I don't know if that is legal or not.

Sorry English is not my first language and I thank you all for reading it.

good luck with all of your investment


Updated 4 months ago

Update: talked with the attorney this morning. He says it is completely fine to sign the contract directly with the tenant. So I did and eventually sent her the message saying"thank you for your work I'll sign the one year lease with that tenant and pay you 1 month commission" It's just AMAZING that she pretend nothing happened and congrats me. I also had a selling agent contract with her but I don't think I can trust her anyone.

You are worrying too much.  The answer is in your contract with your agent.  You owe the agent something and only what it says in your contract.  If it says 1 month rent per year of lease, that is what you owe.  If it says 1 month rent per tenant, that is what you owe, even if the tenant lives a lifetime there.  Deals she says she has with other clients are irrelevant.  Decide how long you want your lease with the applicant and pay the stated fee.

thank you for your reply! I'm a rather unexperinced investor so I'm just trying to do everything with caution. Yes, it only says “one commission of 3200 . . . . for the original term of the lease . . . and an additional commission of [na] for any extension of the original lease . . . “

Your agreement was for one month of rent. You didn't hire her to find you a two-year tenant and you didn't offer to pay two months of rent. I would stick to the original agreement with her and I would only sign the tenant for a one-year lease.

What happens if you place the tenant for two years, pay the REALTOR two months of rent, and then the tenant breaks the lease six months later? Your REALTOR is asking you to pay for something she hasn't yet earned.

For future reference, work with agents that charge a commission only for finding the tenant.  A lot of standard contracts will specify you owe another commission every time the tenant extends the lease.  A 20 year tenant would mean you owe 20 commissions.  You found the tenant because of the agent's help.  The tenant stays because the place is nice and you serve them well.  The agent has nothing to do with the tenant staying.

Originally posted by @James Mc Ree :

For future reference, work with agents that charge a commission only for finding the tenant.  A lot of standard contracts will specify you owe another commission every time the tenant extends the lease.  A 20 year tenant would mean you owe 20 commissions.  You found the tenant because of the agent's help.  The tenant stays because the place is nice and you serve them well.  The agent has nothing to do with the tenant staying.

 thanks for the reminder, I'll definitely remember that. the thing is, even in the contract it says “one commission of 3200 . . . . for the original term of the lease . . . and an additional commission of [na] for any extension of the original lease . . . “

I would strike through the additional commission part.  You are probably fine as is because it says "na".  Check to see if "na" is defined in the contract.  It would be reasonable to assume it means "not applicable", but that would be an assumption.  Striking it through makes it clear there is no additional commission so a clever REA doesn't try to claim one.

Originally posted by @Brian Gerlach :

@Felix Wang asking a REA if it’s a great time to buy or sell is often like asking a stylist if you need a haircut.

lol, nice one! It's more of me wanting to rent it out and talked with my old agent and she just starts telling me that the price of the area has gone up quickly recently and try to persuade me to sell it.

 

Originally posted by @Nathan G. :

Your agreement was for one month of rent. You didn't hire her to find you a two-year tenant and you didn't offer to pay two months of rent. I would stick to the original agreement with her and I would only sign the tenant for a one-year lease.

What happens if you place the tenant for two years, pay the REALTOR two months of rent, and then the tenant breaks the lease six months later? Your REALTOR is asking you to pay for something she hasn't yet earned.

thank you for the reply! It totally makes sense. I guess I really did give her an impression of "slowpoke" "carefree" and "dumb" that she just keep lying in front of me without even thinking the possibility that I have contacted with the tenant myself.