New York City Real Estate… It’s completely different from wherever you are from.
You’ve started your searching looking for a place to live and you see NO FEE apartments and apartments with a BROKERS FEE. You’re probably wondering what this means and why you need a broker.
A broker will help you find a place to live. Yes, there’s Streeteasy, Naked Apartments, Zumper and other sites to help you with your search. Those advertisements on there, are usually all listed by brokers (and sometimes the leasing offices of the building). So really, you’re only seeing places that brokers are advertising. There are a lot of buildings that don’t allow advertising, so what you are seeing on these sites are just a handful of what’s out there. So when you work with a broker, they have access to just about everything!
Ok, so what is a brokers fee? A brokers fee is the fee for the service of the broker you are using. Typically is is about 15% of the year. And in most cases, it can be negotiated to a certain degree.
So then what is going on when a broker says its a no fee apartment? With a No Fee apartment, the building is paying the broker the fee when you sign the lease.
You’re probably asking yourself- so shouldn’t I just go for a no fee apartment?
Well the answer depends on how long you plan to live there.
Yes, on a No Fee apartment, the building is paying the broker. But the money the building is paying the broker from is your rent! What you’ll notice is that No Fee apartments are a bit higher in rent then an apartment with a fee.
No you’re probably wondering when it’s better to get a no fee apartment vs an apartment with a fee.
If you plan on staying in your new apartment for more than a year, I would recommend paying the brokers fee. Because you only pay the fee 1 time based on a 1 year lease. So even though you pay more upfront, in the long run you will not be spending as much.
I would suggest going with a No fee building if you only plan on staying there for a year. Because any longer than that, then you are over paying for your place. It is like you are paying for a broker every year, even though your broker only gets paid from the building that 1 time.
If you don’t have the upfront money to pay the broker fee, then you should probably go with the no fee apartment.
And then there is an exception when the building is no fee and also doesn’t offer the broker a fee. These places are a little bit harder to find as they are not really advertised and you just kind of have to know about it. And a broker can take you there, but then you would need to pay the broker a fee.
I hope this blog entry was at least a little bit helpful and gives you a little bit more information on what No Fee apartments and what a brokers fee is.
Feel free to ask any questions in the comments box as I would love to answer any questions!