Residential rentals F.A.Q.

Q: Why do I have to pay the broker fee?

A: You don’t have to. It’s much like fixing your car at a legitimate mechanic shop versus paying the guy down the street 1/3 of the price. You will save money right now, but in the long run, you’re looking at lots of headache. When you rent directly through Craigslist, you’re signing the lease with someone who, not only you don’t know, but you can’t even be sure they’re giving you their real name. What kind of protection do you have later on if something goes wrong? When you rent through a licensed real estate professional, you know their name, office address, and broker. You also know that the real estate office deals with the landlords, which means that they have their names, addresses, and, in many instances, history of work performed together. And everybody’s aware of that. So the chances of you being taken advantage of are slim. No real estate broker will risk their license over making a $1000. That being said, please make sure the person you’re dealing with is a legitimate agent by checking their Real Estate salesperson photo ID.

Q: Why are you asking me all these questions over the phone before we even discussed available apartment?

A: It’s very important that we screen the potential clients well. The landlords are very particular about requirements. If the tenant has pets and the landlord is not accepting pets, there’s no point in showing the vacancy. Also, if the tenant has 2 small children, we want to make sure to ask them if they want to see the apartment on the 6th floor of a walk up building.

Q: Why can’t we go see the apartments if I’m moving in more than a month from now?

A: It’s because the apartments we see now are not gonna be available a month from now.

Q: But I just want to screen apartments and see what’s out there.

A: We understand, but whatever you see now might not even be similar to what’s going to be available next month. Even the prices might change.

Q: Why do I have to sign the disclosure form right after I met you, before you even showed me anything?

A: We’re required to explain the relationship we have with tenants and landlords.

Q: Why can’t you give me the address of the apartment you’re renting?

A: We only give intersections, because sometimes prospective tenants think that they can go directly to the landlord and bypass the broker, thus eliminating the broker fee. Then the landlord calls us to complain about tens of phone calls they’re receiving about the property. That’s something they want to avoid, which is why they let us advertise and show the vacancies in the first place.

Beware!

There are many things a new apartment hunter needs to look out for. Most of them have to do with money and the speed it can develop when leaving your unsuspecting hands.

Fees

Please be aware of all the fees associated with the apartment. Ask the agent/landlord directly to list all the fees. Usually, people expect a broker fee, an application fee and maybe pet deposit (for the list of the fees and what to expect, please see my previous post). Some real estate professionals, and I use that term very loosely, make lots of money gathering application fees (which, of course, are not refundable) for apartments they know are unavailable, and then keeping them. So, before you put down any money, ask if the place is still available, even if you just saw it. (Yes, it is stupid and yes, it should go without saying, but you know….).

Also, real estate offices will expect you to put down a good faith deposit, usually 1 month’s rent which will go towards your total closing costs. Make sure this deposit is fully refundable in an event of the landlord rejecting your application (in this case, your deposit is refundable and your application is not, because they had to run your credit and background checks) or in an event another candidate just beat you to it (in this case, both deposit and application fee are refundable, because they never had to run your credit and background checks). As a rule, if you put down any money to hold an apartment and then you decide to back out, that money is not refundable, but this goes on a case to case basis. My broker, for example, always refunds the money, going by the old “more flies with honey” but don’t assume that everyone will do that.

Speaking of assuming, don’t!

Because if you do, you’re making….. well, you know the rest. Do not think that the landlord will buff the floors just because the real estate agent or the landlord him/herself told you so. Whatever you want fixed/done/changed in the apartment, make sure it is put in the lease before you sign it.

And last, but not least, a word or two about my kind, a real estate agent. We might have a reputation out there that is less than desirable, and a lot of it has to do with the fact that we all work on commission, therefore it might make a person let’s say less inclined to speak the truth, the whole truth, and nothing but the truth. Now, I’ve meet honest agents and I’ve met some that are not really that. It’s very difficult to generalize and shove all those different personalities in the same hat. That being said, we’re all big boys and girls, and we’ve all seen at least half a dozen apartments in our lifetime, even if we haven’t even moved out of our parents’ house. So, if you see an ad describing an apartment like it’s a Beverly Hills mansion, beware! There ARE beautiful, gorgeous, to-die-for, apartments all over the city, but we don’t need an agent or landlord to tell us that. The only correct way to determine the beauty and the value of an apartment is to look at the price tag. The price never lies. An agent who’s, after all, a person, can misrepresent an apartment. The landlord can try to raise the price to maximize the profits, a camera, even, can make something look much, much better with proper lighting and a proper choosing of the angles. The only thing that doesn’t lie is the price tag. Because in a city as big as this one, all the apartments have been rented thousands of times over. From small studios in not desirable neighborhoods to 5-floor brownstones on the Upper East Side. From barely legal basement apartments in houses over a 100 years old to penthouses in brand new buildings. And when you see an ad for a 1 bedroom for $1000 in an area where 1 bedrooms are $1500+, you know something’s wrong. Now imagine seeing that ad with words: “Beautiful, renovated, spacious 1 bedroom in a new building.” It hurts, right? It physically hurts. So please be careful and remember, the price tag doesn’t lie.

That’s it for now. Stay worm in this awful weather.

Srdjan Trofi

About the broker fee structure

There seems to be a lot of confusion regarding the fees the tenant will be paying before moving into a new apartment, the biggest fee of course being the broker fee. Besides this one, there is usually an application fee, and a debit card fee (some of our offices accept debit payments, and that fee is very small).

Broker fee

Here’s the truth: every apartment has a fee, but the tenant is not always the one paying it. Sometimes, the landlord will pay us a fee to rent the apartment faster. In this case, all the tenant needs to move is 1st month’s rent, security deposit and the application fee. This is what we refer to as “No Fee Apartments”. Unfortunately, many of the hottest listings carry a fee payable by the tenant. In these cases the landlord knows that they will rent the apartment fast with or without the fee. Our policy is to always inform the client whether the apartment has a fee or not.

Sometimes the prospective tenants get caught up in the idea of not paying the fee if not necessary (we’re all Newyorkers, after all), failing to realize that they should take everything into the account. For example, if a person can choose between a $1400 apartment with a 1 month broker fee and a $1500 with no fee, sometimes they go for the $1500 one because they’re trying to save money. The problem is, the $1400 apartment will cost them $18,200 in the first year ($1400X12 months + $1400 broker fee). The $1500 will cost them $18,000 in the first year ($1500X12 months). See? Almost the same. $200 difference. But then when their 2nd year starts, $1500 apartment will cost $100 more EVERY SINGLE MONTH and that adds up to $1200 a year you’re losing multiplied by how many years you’re staying in 1 apartment? What’s the average? 7 years? Always remember, the broker fee you only pay once, the rent you pay every month.

Application fee

This fee covers the application processing, credit and background check. In a great majority of cases it’s $50, some management companies charge $75 or as much as a $100, but those are very rare. You should always check with your real estate agent and ask them to disclose all the fees associated with the process. Even if you checked your own credit recently, we still have to do it. We’re presenting you to the landlord and we need to make sure all the info is as thorough and accurate as possible. Don’t worry, you’re in good hands.

Pet deposits

These are technically not fees (fees are non-refundable, deposits are refundable), but they can turn into fees. Most of the time, the landlord will ask for $200-$300 pet deposit. It can go as high as $1000 for pet deposit, but again, the small print is crucial. Usually, small pet deposits are non-refundable no matter how much or how little damage your [insert dog/cat/other name] causes, so they’re technically fees, while large deposits are fully refundable at the end of your lease. Again, ask your agent.

That’s it for now, I hope I helped a little bit. The next time we’ll go over what to watch out for when hunting for a new place and submitting the application.

by Srdjan Trofi

A thing or 2 about the renting process

Finding a new place to live can obviously be very stressful. Many things need to be taken into consideration, from the budget to the future neighborhood to the time of year when you’ll move. The process itself can take weeks and it’s very important that we are properly prepared for it. Below I will summarize the steps we’ll take to make this stress-less and successful.

During the initial conversation I will ask you some questions to see what exactly you are looking for (size, price, neighborhood, likes and dislikes, etc.). That way, when we go see the apartment you have in mind, I have a couple other ones lined up, just in case you are not perfectly happy with the first one.

There are several things you will need to bring to the showing. As a rule of thumb, it’s the last year’s tax returns, last 2 pay stubs, most recent bank statement, current apartment lease and the proof of rent payment for the last 3 months. Not originals, copies are fine. If it sounds a bit much to bring to the showing, please have in mind that other agents will probably ask the same thing. The reason is that the landlords and management companies won’t even accept the applications without all the paperwork. And if you’re thinking:” Well, if I do like the place, I’ll just fax the documents the next day.”, please don’t. Way too many deals die before the closing because people were hesitant and someone else snatched the place.

So, once you see the place you want, we’ll go to the office and put the deposit down so they can take it off the market. A huge majority of available apartments are being shown by more than one agent and more than one real estate office, so, as a rule, we try to wrap it up ASAP.

When you put the deposit down (usually 1 month’s rent which goes towards your total moving costs), we submit the application and then we wait. It usually takes the landlord between 24 and 48 hours to decide. Once you’re accepted, we’ll schedule the closing and that’s it!

Next week, I’ll write about fees and no-fees; what to expect and what to look out for.

Thanks guys! Please feel free to send it to anyone who might be looking, it will save them some headache and hopefully earn me some money so it’s a win-win.

by Srdjan Trofi