Fees Explained – What Is No Fee?
Fees Explained – Real Estate Broker Fees
The real estate industry often involves an array of fees for different purposes. Broker fees are notorious for being nebulous and puzzling. Fees Explained – What Is No Fee? is part of a series that will help you understand how broker fees are established so that you are better prepared and informed in your quest to rent an apartment or secure a tenant. This article is on No Fee.
Fees Explained – What Is NO FEE?
NO FEE apartments are becoming increasingly popular and are often perceived by renters as offering better value because of lower total move-in costs. Fees Explained – What Is No Fee? will answer the questions of what is no fee, who pays the broker’s fee, and how to find a true no fee apartment.
No Fee means that a renter does not pay an agent for guiding them through the apartment search and application process. A typical fee for the luxury of an agent’s service is 1 month of rent or 15% of the annualized rent. There are 2 basic ways for tenants to secure a “NO FEE” property:
- Renters seek “NO FEE” listings solely via their own efforts without the assistance of an agent
- In scenarios where a landlord is offering a concession such as a free month or an OP commission (continue reading), an agent may be compensated by such a concession while the renter foregoes the concession in favor of not paying a fee.
Renters should be cognizant of NO FEE apartments whose higher pricing reflects a baked-in fee. The Cunard Team refers to this as “The Myth of No Fee” (see more detail here). Sometimes, landlords offer incentives such as a free month of rent offered directly to the tenant or the equivalent of 1 month’s rent paid as commission to the broker, which is referred to as an owner-paid (OP) commission. Renters should be aware that apartments are sometimes advertised on a net-effective basis where the advertised rent reflects the number of free months being offered.
Thanks for reading FEES EXPLAINED – WHAT IS NO FEE?. For more definitions or “How To” articles please read through our blog. If you have a specific real estate question or would like to share your NYC real estate experience with us please contact us directly via phone or email. We look forward to connecting with you!