New York City is tricky to find desirable, affordable NYC apartments to rent. Many people choose to use a broker. It is common for the renter to pay a broker’s fee in New York City. It differs from many other cities, where an agent is typically not used. If the owner feels the need for one, usually, the landlord pays the broker’s commission fee. The brokerage fees generally are pretty substantial. There are certain instances where it makes sense and others do not.
How Much is The Broker’s Fee in New York City?How Much is The Broker’s Fee in New York City?
The broker’s commission fee usually equals one month’s rent – up to 15% of the first year’s annual rent—this amount, which renters pay upon signing the lease. The 15% figure is essentially the standard. In Manhattan, the median rent for newly signed contracts was approximately $3,500. A 15% fee would amount to $6,300. Of course, rentals are much higher in specific neighborhoods and buildings, meaning you pay a more substantial broker commission. Also, should you require short-term housing, below is an example of a typical broker’s commission?
| Rental Term | Broker's Commission |
|---|---|
| Fewer than 2 months | ½ month’s rent |
| 2 months and up to 6 months | 1 month’s rent |
| 6 months up to 1 year | 15% of the first annual rent |
| 1 year or more | 15% of the first annual rent |
Why Pay a Broker’s Commission Fee?Why Pay a Broker’s Commission Fee?
It is merely a matter of supply and demand. Historically, in New York City, more people are looking for apartment rentals than there are to buy. It gives the building owners more leverage in setting the rent and determining who pays the commission.
Therefore, if you want an apartment, particularly in a desirable neighborhood, you may wish to pay the brokerage fee. Your agent can help weed out undesirable apartments. It can save you a lot of time and frustration.
When You Should Not PayWhen You Should Not Pay
You may not have to pay the brokerage fee in neighborhoods with less intense competition. In these areas, you may find an apartment on your own. Alternatively, the brokerage could list the condo for rent as “No Fee.” In some cases, the building is handling the rental internally. It could also mean the landlord is paying the buyer’s commission.
There are several other reasons the landlord might pay the commission. They might feel this is a way to fill the occupancy quicker. In this case, the brokerage commission may outweigh the lost rent. Alternatively, the apartment may have scared off renters if the owner has had the vacancy for a long time. In this case, you should carefully consider whether you want the apartment.
You should check to make sure the rental amount is not higher than if you paid the commission in a no-fee situation. Many landlords merely bake the broker’s commission fee into the monthly payment, resulting in no savings for the prospective tenant.
If you are going to try to find an apartment on your own, you need to prepare yourself to do a lot of legwork. You can start online, but many listings will have an agent attached to them. If you are comfortable living in one, large apartment buildings may not use an agent.
Is The Broker’s Fee Negotiable?Is The Broker’s Fee Negotiable?
Everything is negotiable when it comes to NYC apartment rentals. You can certainly try to negotiate the commission. Generally, it is an uphill battle, though. Certain things can bolster your case. Agents want the future business, and they might work with you if you can provide it. If you have referred clients, this is a significant point in your favor, and agents might negotiate a lower broker commission fee.
