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New York City Council Votes to End Broker Fees Squeezing Renters

(www.bloomberg.com)
258 points JumpCrisscross | 5 comments | 13 Nov 24 21:38 UTC | HN request time: 0s | source
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GenerWork ◴[13 Nov 24 22:31 UTC] No.42130920[source]▶
While I do agree with the spirit of this, doesn't this mean that any fees that brokers require will be included in the rent?
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mikeocool ◴[13 Nov 24 23:21 UTC] No.42131323[source]▶
Landlords who have many apartments to rent every year have a lot more leverage over brokers than renters who are generally renting at the very most once a year. So when landlords are forced to pay the fee that have more optionality to negotiate the fee down.

Even now, when a landlord has a lot of available apartments they need to move or when the market is soft (for example during peak COVID), they’ll typically offer a “1 month OP.” Meaning the landlord pays the broker a 1 month’s rent fee, and the broker markets the apartment to renters as no fee. Even if the landlord just roles that into the rent, it’s a savings over the 12-15% fee standard today.

Also, landlords with larger buildings or geographic density are already figuring out that they can rent apartments cheaper with a few salaried leasing agents, instead of paying brokers. If more of them are forced to internalize the broker fee, more of them will figure that out.

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xp84 ◴[14 Nov 24 00:51 UTC] No.42131950[source]▶
Not a New Yorker here, can someone ELI5 (briefly, I don't want to waste your time) what function brokers serve other than extracting money from people? I know a real estate agent at least takes care of a great deal of paperwork that must be done correctly in the transfer of title, and shows properties to buyers. But in terms of rentals, I've never needed a third party to do any of that, and I lived in 5 rental apartments in about 8 years. Landlords 'just' list their properties on the Internet, people find said properties and submit applications or go see them at a predefined time. I'm aware of property managers and have dealt with them in cases where the landlord doesn't want to bother interviewing tenants and stuff -- is a broker a subset of these functions? I think of a property manager though as also serving the function of arranging repairs and handling the whole tenant relationship. In my experience, a property manager does charge a percentage of the rent to handle all this, which kind of means it's passed on, but in terms of how the broader market contains competitors who aren't paying a property manager constrains how much it can be fully passed onto the tenant.
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ics ◴[14 Nov 24 01:23 UTC] No.42132175[source]▶
In the past, there was some informational benefit for average Joe/Jane. Without internet, finding apartments, knowing which neighborhoods, buildings, or landlords were good or not was quite difficult. Whether the average broker helped with that I don't know, but those I know from that generation (pre-90s apartment seekers) the ones who used a broker did so for those reasons and were mostly satisfied. These days, most people I know exclusively look at direct listings and don't pay broker fees. The exception is usually when you are either more picky or in more of a rush. At my last apartment I paid a broker and it was indeed a place where the landlord simply didn't want to deal with vetting tenants and left it up to the brokers to get the info to impress them.
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1. nobody9999 ◴[14 Nov 24 08:03 UTC] No.42134036{3}[source]▶
>In the past, there was some informational benefit for average Joe/Jane. Without internet, finding apartments, knowing which neighborhoods, buildings, or landlords were good or not was quite difficult.

Actually, we had these arcane things called "newspapers" that were filled with hundreds and hundreds of ads for apartment/house rentals, sales and even shares.

You figured out what you could afford and went through these arcane things and marked the ones that interested you. Then you gasp made a phone call to find out:

1. If the place is still available;

2. When can you come to look at it;

3. If you like it, snap it up (by writing a check[0]) before someone else does.

As for brokers, the ads generally noted that it was 'no fee' if the rental was direct with the landlord. Apartment shares were generally 'no fee' as well, since you were just moving in with roommates you didn't know.

I had some really weird experiences looking for both shares and apartments back in the 1980s and 90s. But it wasn't all that difficult or that much more time consuming than using the real estate websites these days. They're essentially the same thing, except with more photos.

[0] https://www.investopedia.com/terms/c/check.asp

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2. ics ◴[14 Nov 24 18:03 UTC] No.42139107[source]▶
I don't think I need to refute the overall glibness here, but in case you're looking for a place in the coming months/years: brokers are often the only ones who take checks these days. The last landlord I had who took a check was 15 years ago, since then it's been cash, bank transfer, or Zelle only.
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3. nobody9999 ◴[14 Nov 24 21:50 UTC] No.42141611[source]▶
>I don't think I need to refute the overall glibness here, but in case you're looking for a place in the coming months/years: brokers are often the only ones who take checks these days. The last landlord I had who took a check was 15 years ago, since then it's been cash, bank transfer, or Zelle only.

Firstly, I was talking about goings on 30-40 years ago, and GP's (incorrect) assertion that "In the past, there was some informational benefit for average Joe/Jane. Without internet, finding apartments, knowing which neighborhoods, buildings, or landlords were good or not was quite difficult." It was not.

As far as checks are concerned, I've been paying by check. The last time was for this month's rent.

Regardless, and I'll say it a second time in this message as you, apparently, missed it in the first message, my previous message was replying to the assertion that back in the 1980s/90s, it was much harder to find/get an apartment than now. It ain't true. I was there. I did it repeatedly.

The only real difference is that I don't have to go out and get the Village Voice or Sunday papers for the expanded classified ad pages. Oh, and more photos on the websites.

Edit: I went and checked and you, ics, were the GP to whom I referred. Please re-read my initial reply to you -- you obviously misunderstood.

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4. ics ◴[14 Nov 24 22:17 UTC] No.42141795{3}[source]▶
I did not say it was much harder. I called your response glib because you appear to be reading much more into my response than was actually written and speaking on many assumptions. If you want a summary of my first post which was to an outsider asking why brokers exist in the NY marketplace, it is that there was some marginal benefit which now is even less in my opinion.
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5. nobody9999 ◴[14 Nov 24 22:31 UTC] No.42141899{4}[source]▶
I was replying to this and only this:

"In the past, there was some informational benefit for average Joe/Jane. Without internet, finding apartments, knowing which neighborhoods, buildings, or landlords were good or not was quite difficult."

Which I helpfully quoted at the beginning of my reply. I then (at the end of my comment) clarified that I was talking about 30-40 years ago.

I suppose if GGP has just as poor reading comprehension as you appear to have, they might have gotten confused. Which would be a shame.

That said, I assume at least a modicum of English proficiency and reading comprehension skills when posting here. Perhaps I should reevaluate that assumption.