Real estate commission for rental

6 Replies

I've been contacted a couple times by real estate agents calling about properties I have available for rent. They are calling on behalf of their clients, but the first thing they ask is if I offer a real estate commission. I have answered no. I don't see a benefit in this from my prospective as I get majority of my interest from individuals. My question is how others handle this scenario. Do you offer a commission? If so how much? Is it more appropriate to have the prospective tenant provide commission to their agent? Does not offering a commission prevent that agent from telling their client about my property?

Almost certainly if you refuse to pay them a commission they will not present your property to their clients.  I think its relatively rare for tenants to use real estate agents to find rentals.   The one time I used an apartment finder was when we first moved to Houston in 1982 (boom times) and we were told that if we found something we liked to rent it on the spot.

What's it like in your area?  Are you getting plenty of calls?  Ask these agents how much they want for a commission.  Around here, a property manager typically charges 50-100% of one month's rent to place a tenant. However, that include taking all the calls, showing the property, doing the screening and signing the lease.  If they are simply bring you a prospective tenant and you're doing all the work, and your market is slow, I'd think a fee in the range of 5-10% of a months rent might be OK.

Someone who works on a commission will not likely steer their client to see a property that they will not get a commission from filling.

Is it a house/townhouse or Condo/Apartment?

Generally if listed with a real estate agent the comission will be 1 months rent, with generally a 50/50 split between the renter and landlord's agents.  So an agent would typically expect 1/2 rent to bring a renter.

Some apartments co-op with agents.  I am not sure of the details, but I think they generally offer a flat-rate vs. a portion of the monthly rent.  So if you have a condo, you may have the possibility of getting agents interested at a lower rate.

I don't think there would be anything wrong with adding 4% to your rent and co-oping 1/2 on the rental.  If they bring you a good tenant, I would make them the first call when I had my next property available.

IMO on the buyers/renters side the agents are doing a lot of work.  They also have to factor in those who never pull the trigger in their comission rates(more prevelant with potenential buyers).

Ask an agent friend what the prevailing rate is for a cooperating broker who brings a tenant in your area.  In mine, $200 is generous, so it's not that much to pay an agent, and they don't expect much.  If you don't pay, they will not bring their clients to your home.

So to clarify, in my case, I'm not listing with an agent but rather listing/marketing on my own, managing the property, showing to potential clients. Is it typical for the agent to have an arrangement with their client that is helping them find a place? With all the work I'm doing I can't justify paying an agent 1/2 months rent.

So to clarify, in my case, I'm not listing with an agent but rather listing/marketing on my own, managing the property, showing to potential clients. Is it typical for the agent to have an arrangement with their client that is helping them find a place? With all the work I'm doing I can't justify paying an agent 1/2 months rent. And these are SFH.

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