Help with Negotiating Renting Apartment in NYC

8 Replies | New York City, New York

I need your help/inputs!

I am shopping for an apartment in Harlem area around 150th and Bradhurst, and I need your opinion in where I can negotiate in terms of monthly rent and commission fee charged by an agent.

Below are the facts:

-The 1 bed room apartment is listed on for 80 days

-Original asking price was $1850 and recently reduced down to $1750.

-We are offering $1650 for the rent.

-Based on the rent, the commission fee is $2475, which is 12.5% of Annual rent (The agent already told me that it is reduced from 15%) . He also said that previous fee reduction offer was rejected.

What would you recommend in terms of approaching an offer that is beneficial to all three parties?

I would like to know offer example such as offer to pay full 15% of commission, but lower rent or offer asking rent price with lower commission (such as 10%).

Just a quick math, if I paid 12.5% in fee and $1650, then the equivalent rent would be $1856.25 = ($1650 x 12 + $2475)/12

Another example would be, 15% in fee and $1550 is $1705 = ($1550 x 12 + $1860)/12

10% in fee and $1750 in rent is $1925 = $1750 x 12 + $2100)/12 (this would be higher than the current offer...)

So I guess the math says, lowering the rent will help over all cost for me...?

Any input will be appreciated!

I've rented in NYC and Brooklyn over the past 6 years and have successfully negotiated down rent in almost every instance.  There really isn't a secret to what I've done, much of it is spelling out to them why you're a great candidate (your clean, you have a steady job, you take care of the unit as if it's your own home, your a good neighbor, etc).  I do however usually start my search for NO FEE apartments so therefore I don't have much experience negitiating rates with agents.  Perhaps another tactic would be to remind them (and the landlord) that hitting the 90 day mark is 3 months without a tenant paying rent, ouch!

Also, try to negotiate for a multi year lease - that way you only pay one broker fee but spread out over 24+ months wouldn't be such a hard hit.

@Steve Genna , than you for your quick reply!  I didn't know that rent is negotiable until now...  For past 4 years in New York, I was always paying full asking price.  Well, now I know that it can be negotiated!

That's a good idea about telling them about being a great candidate.  We have a very steady income and usually fix things in apartments if it's a small issue.

In the past, I always managed to find a place without an agent fee, but this time I couldn't find much on craigslist so I tried to use Trulia.  I even thought I ask the agent for the fee and I suppose we had a miscommunication somehow about the fee.  (I was under the impression that the management company pays for the commission).

Doing 24+ months lease is another good idea!  However, we are not sure how long we are staying in NYC (possibly considering to move away in next summer).

Also, crime rate in the area is not ideal according to Trulia either.  I will be fine at night but I am not sure for my fiance...  She usually come home late from DAMBO (home by 8:30 or 9:30pm).  Another variable to consider!

You're negotiating with two separate entities and while, in the end, you have a net cost, those negotiations aren't necessarily linked like you've assumed they are. The owner has turned down your lower offer. He's just lowered the price, has it available during the best season to have a lease signed, and has it at a low price point. He's probably not too worried about getting it rented. If this landlord only has a few units he might be motivated but more likely he's got a few hundred and could care less. Is this a single unit in a co-op or condo, or in a larger rental building?

Your offering more broker fee to the broker isn't going to change the owners mind. The broker wants to get a deal done and if the owner told him no to your lower offer, then the answer is no. If you're a great candidate with high income, then that was most likely relayed to the owner already.

If there's any wiggle room it's on the broker's part. If you had your own broker representing you, then the commission would be split, so at best 7.5% for each broker. You don't have your own broker so the listing broker could collect the entire amount... which is why he's negotiable.

I would try coming up on price and try to get the fee down to 1 month.

As for the area, I have actually sold in the neighborhood (on the corner of Bradhurst and 150th). It's a lot of younger couples and singles in the condos and condo conversions. The area has improved quite a bit over the past several years but not as much or as quickly as west of the park or a little further south near 145th. 

Certainly check out renthop and streeteasy before you do too much more on this unit.  You might end up finding a better option in the area for no fee at all (make sure to use that filter when searching).  

@Jason Lee , Thank you for the perspective.  I didn't think that the management company (owner) has hundreds of units and not renting out of it is not an issue.  I am not sure if it is considered co-op, condo, or larger rental building.  I don't think it is a co-op since the agent hasn't mentioned about any co-op interview and rules.  It could be a condo, but could be a larger rental building...?  The unit is in an appartment building, which is 6 floors and probably 6-8 units in each floor.

After thinking about the fee, the way the agent was so quick about reducing the fee now kind of make sense.  This was for another place, but the broker was asking for 15% of annual rent.  The rent was $1895 and the fee was $3411 and he was so "kind" to make an easy number and offered me $3000 in fee.  If he expects a month worth as a fee then it is $1105 more than what he would normally get.  7.5% would be $1705.50 and he would have gained almost $1300 from my ignorance... haha

Where is this 15% come from?  Is this dictated by law or just the industry standard??  Would I have any leverage to bring out that the agency should only get 7.5% since I am representing myself as if I am paying myself the agency fee and the split the 15% with him.

Originally posted by @Steve Genna :

Certainly check out renthop and streeteasy before you do too much more on this unit.  You might end up finding a better option in the area for no fee at all (make sure to use that filter when searching).  

 I think that's a good idea.  I will try to look for more with "no fee".

15% is customary. It's not law and it is negotiable. Some brokers will negotiate, others will not. I suggested you try to negotiate, not that the broker expects just one month and is trying to get more. They expect 15%. Dont assume you'll be successful negotiating down to one month just because you don't have your own broker. No, you can't represent yourself and ask for the 7.5% fee unless you hold an NY real estate license.

FYI streeteasy began charging brokers to list rentals last year and so the number of listings there has drop pretty significantly, particularly at lower price points. I would try nybits, and even the nytimes (which no longer charges brokers).

Thanks for the input. I will try to negotiate with the broker as you suggest. If I don’t try swinging at it, I have 100% of missing it.

Also, thanks for your suggestion about Nybits. With a quick search, I found some places that I might be interested in. I like the site because it has average listing price and also you can sort the results by neighborhood. This is useful for me to understand the name of neighborhood I am looking.