Are you or tenant paying Broker Fee? Why or Why Not?
Nadiyah MalbonBusiness Member
Realtor · NJ · Member since 2020 · 104 posts · 31 votes
Nadiyah Malbon Group (NMG) 4.941 Reviews
Are you or tenant paying Broker Fee? Why or Why Not?
Most Popular Reply
Real Estate Agent · Princeton, NJ · Member since 2016 · 1k+ posts · 1k+ votes
2y@Nadiyah Malbon - For every rental I've posted in Central New Jersey (Mercer or Burlington County), the landlord or owner has agreed to pay the broker fee (negotiable, often 1st month's rent which is split 1/2 listing agent, 1/2 buyer's agent). The listing agent is responsible for any or all of the following: photos, room measurements, data entry, talking to agents, assisting the owner with reviewing tenant applications, getting the lease completed and signed, collecting the first month's rent and security deposit. (Usually the first month's rent is made payable 1/2 to listing agent brokerage and 1/2 to tenant agent brokerage). The tenant's agent is responsible for any and all of the following: finding or suggesting properties for tenant to rent, driving and opening doors to show the tenant multiple properties, advising tenant on finding a good deal, reviewing lease with tenant, preparing the lease and collecting checks. After the agent's brokerage takes 30-50% of the money, on a $2000 rental, this could amount to $500-700 in the pocket of each agent for 5-20 hours of work each.
If the owner doesn't agree to pay the broker fee, usually agents will not invest the time to list the property. I would not do it because it's very tough to help a tenant secure a place right now. I have not been able to get paid on 95%+ of tenants I've tried to help secure something that wasn't my listing because they often find another property where I can't get paid, tour directly with that apartment building or owner, and sign directly with that apartment building or owner.
At least Central Jersey is not New York City, where buyer brokerage fees may be custom. It seems like perhaps things are changing. However, we have to remind owners that every 1 month vacant is $2000 they didn't receive, so what's the difference if they paid it to me and I found them someone on Day 3?
On about half of my rentals, I have gotten the tenant agency as well (dual agency) because they contact me directly from zillow / realtor / apartments com / yard sign, etc.
5 Replies
- Laveen, AZ · Member since 2016 · 584 posts · 528 votes2yWith the PMs I have that charge one, I pay it. Standard has been anywhere from half, to a full month's rent placing a new tenant. The trade off is usually the ones that charge a broker's fee/leasing fee, charge a lower monthly fee.
Quote from @Nadiyah Malbon:
I am investor/landlord and Real Estate agent so I've been on both sides. As you probably know, that average rents in NJ are $2000-2500. Most tenants are reluctant to pay equal to one months rent, however, I've rented a few where they pay with no problem. I listed 2 newly renovated apartments on behalf of another landlord. They are sitting because of this. What is your experience?
The ones I have who don't charge a leasing fee, charge a higher percentage per month. Typically around 10%
I also see them get extra by charging things like "administrative fees" to one or both, and lease renewal fees.
Now it sounds like you're talking about is just a fee for placing the tenant, and then the landlord or someone else handlea management. In my experience the landlord pays that and frankly should. They stand to benefit financially from you finding them a lease and screening the tenant. The tenant is already coming out first month, deposits, and more depending on location.
I could see in an area that's very high demand, low supply that the tenants may be moved to pay a broker fee if legal. I've heard of places like Tokyo where tenants pay a financial "gift" to the landlord just to sign a lease - Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes2y
With my rentals in the DC area, I as the landlord pay the brokers. In Boston where Im also a landlord, the tenant pays. Every market has their own customs.
District Invest Group545 Reviews - Real Estate Agent · Princeton, NJ · Member since 2016 · 1k+ posts · 1k+ votes2y
@Nadiyah Malbon - For every rental I've posted in Central New Jersey (Mercer or Burlington County), the landlord or owner has agreed to pay the broker fee (negotiable, often 1st month's rent which is split 1/2 listing agent, 1/2 buyer's agent). The listing agent is responsible for any or all of the following: photos, room measurements, data entry, talking to agents, assisting the owner with reviewing tenant applications, getting the lease completed and signed, collecting the first month's rent and security deposit. (Usually the first month's rent is made payable 1/2 to listing agent brokerage and 1/2 to tenant agent brokerage). The tenant's agent is responsible for any and all of the following: finding or suggesting properties for tenant to rent, driving and opening doors to show the tenant multiple properties, advising tenant on finding a good deal, reviewing lease with tenant, preparing the lease and collecting checks. After the agent's brokerage takes 30-50% of the money, on a $2000 rental, this could amount to $500-700 in the pocket of each agent for 5-20 hours of work each.
If the owner doesn't agree to pay the broker fee, usually agents will not invest the time to list the property. I would not do it because it's very tough to help a tenant secure a place right now. I have not been able to get paid on 95%+ of tenants I've tried to help secure something that wasn't my listing because they often find another property where I can't get paid, tour directly with that apartment building or owner, and sign directly with that apartment building or owner.
At least Central Jersey is not New York City, where buyer brokerage fees may be custom. It seems like perhaps things are changing. However, we have to remind owners that every 1 month vacant is $2000 they didn't receive, so what's the difference if they paid it to me and I found them someone on Day 3?
On about half of my rentals, I have gotten the tenant agency as well (dual agency) because they contact me directly from zillow / realtor / apartments com / yard sign, etc.
- 2yDominic RosatoBusiness MemberReal Estate Agent · Jersey City, NJ · Member since 2022 · 82 posts · 61 votes
From my experience in the areas near NYC (like Hoboken, JC, etc.), the tenant is almost always responsible for the fee. In such a competitive market, landlords don't have to make that concession. Plus, it's standard practice in the city, and spills over to NJ. This seems to be a very market-specific thing, though.
Around here, tenants have to put in some work (and get lucky) if they want to avoid the broker fee:
1) Constantly search on Google for no-fee apartments and contact the owner directly
2) With larger apartment buildings, they can usually contact their leasing office directly and sometimes avoid at least some of the broker fee
You may have already done this, but I'd try analyzing the other apartments listed near yours and find out who they're charging the broker fee to. Like I said, this seems to be a very dependent on which market you're in. Good luck!
Dominic Rosato528 Reviews - New York, NY · Member since 2018 · 215 posts · 50 votes2y
desiarable units, rent regardless of broker fees
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