Rent in NYC without paying broker fees(reny-webapp.herokuapp.com)
reny-webapp.herokuapp.com
Rent in NYC without paying broker fees
https://reny-webapp.herokuapp.com/
45 comments
When you see anti-consumer stuff like requiring a mostly value capturing middle man, your mind should immediately go to supply/demand imbalance. If the suppliers are structurally advantaged by having limited supply in light of demand(e.g. by zoning or high building costs driven [frequently driven by regulations and minimums]), then you're going to see the supply side try to extract as much value from transactions as possible. They can get away with this because they have no competition. You can build all the alternative, consumer friendly marketplaces you want but supply will not use them because why would they? The only solution is to build more housing. You might say that New York is one of the densest places in the world already, but this is a clear signal that they haven't built enough.
Interestingly, last couple of times I tried to move from my current apartment, the agent declared that the entire fee is paid by the landlord, not me.
Maybe it's because in late 2020 and early 2021 the market was heavily tilted in favor of renters, and rents plummeted so much I seriously eyed pretty elite areas of Manhattan like UES.
Now, of course, the pendulum has swung to the opposite extreme.
Maybe it's because in late 2020 and early 2021 the market was heavily tilted in favor of renters, and rents plummeted so much I seriously eyed pretty elite areas of Manhattan like UES.
Now, of course, the pendulum has swung to the opposite extreme.
Agree, but I provide incentives to the supply (landlords/property mgrs) to use my app/accept my leads. I will not mention more details because it the “secret sauce”
I think this will be better as a Web App than mobile App given that people don’t expect to be moving that often. Why download an App that will be used only for maybe a month?
Making it a web App also increases the chance that people will use it. E.g. I might not be thinking of moving now but based on your show HN, I could try it and if I like it, will bookmark for future use. Being a mobile App, people will probably not install it just to try it out if they don’t have an immediate use for it.
Making it a web App also increases the chance that people will use it. E.g. I might not be thinking of moving now but based on your show HN, I could try it and if I like it, will bookmark for future use. Being a mobile App, people will probably not install it just to try it out if they don’t have an immediate use for it.
This is good feedback, I code faster in swift so i decided to build the mvp there, also apartment hunters like me to tend to scroll through listings to see if there is something better out there.
also webapp means us android plebs can use it. kinda sick of apple getting priority and better apps tbh.
After both living in NYC for almost a decade and being a landlord for more than that, there have been some things I always wondered about:
1. "Broker only apartments"
I had read at one point that up to 60% of apartments in NYC were broker only meaning that you couldn't just walk up to the building and ask to see a unit. I think this may have been the case in the past since it was a "win/win" for both the landlord and the broker. For the landlord, they knew that the brokers could act as a filter on "lookey loos" and for the tenants, they knew that the brokers weren't going to show them bait and switch apartments.
I wonder how true any of the above is today given that Street Easy etc has become the defacto centralized listing agency and all of the meta data about an apartment is now public.
2. The function of brokers now
I do still see the need for brokers given the incredibly hot NYC real estate market if only as someone who can go to open houses on behalf of the tenants. It's not uncommon to have open houses with upwards of 20 - 30 people show up and at least half of them be real tenants who are actively looking. If that open house is in the middle of the day, only a broker could go otherwise the prospective tenants would have to take off work
3. Why is the rent so high this year
Couple reasons (I imagine):
- Lots of people locked up 2 year leases in the middle of COVID
- Lots of people spent a year in mom's basement and are now thinking "NEVER AGAIN!"
- Higher interest rates mean people who would be buying may now rent. I think this group is small given the VAST majority of renters skew younger.
- Inflation has led to more cash being around in general
1. "Broker only apartments"
I had read at one point that up to 60% of apartments in NYC were broker only meaning that you couldn't just walk up to the building and ask to see a unit. I think this may have been the case in the past since it was a "win/win" for both the landlord and the broker. For the landlord, they knew that the brokers could act as a filter on "lookey loos" and for the tenants, they knew that the brokers weren't going to show them bait and switch apartments.
I wonder how true any of the above is today given that Street Easy etc has become the defacto centralized listing agency and all of the meta data about an apartment is now public.
2. The function of brokers now
I do still see the need for brokers given the incredibly hot NYC real estate market if only as someone who can go to open houses on behalf of the tenants. It's not uncommon to have open houses with upwards of 20 - 30 people show up and at least half of them be real tenants who are actively looking. If that open house is in the middle of the day, only a broker could go otherwise the prospective tenants would have to take off work
3. Why is the rent so high this year
Couple reasons (I imagine):
- Lots of people locked up 2 year leases in the middle of COVID
- Lots of people spent a year in mom's basement and are now thinking "NEVER AGAIN!"
- Higher interest rates mean people who would be buying may now rent. I think this group is small given the VAST majority of renters skew younger.
- Inflation has led to more cash being around in general
brokers are still a win for landlords because it allows them to actually do nothing.
They don't need to post on streeteasy.
They don't need to host an open house.
They don't need to answer any questions on email or over the phone.
They just have to pick a couple brokers and hire a super and they're done. They don't even need to pay them because they have the tenant for that. They just wait around until the broker calls to let them know there's an approved tenant and wait for the checks to show up.
The only effort they have to engage in is when it's time to evict someone.
A tenant in NYC might want a broker if they're going to be stuck paying a broker fee anyway. You might as well have half of that fee going to someone who represents you and might help you avoid getting completely fleeced. Then they have a broker on their side coordinating viewings and dealing with emails/phone calls.
They don't need to post on streeteasy.
They don't need to host an open house.
They don't need to answer any questions on email or over the phone.
They just have to pick a couple brokers and hire a super and they're done. They don't even need to pay them because they have the tenant for that. They just wait around until the broker calls to let them know there's an approved tenant and wait for the checks to show up.
The only effort they have to engage in is when it's time to evict someone.
A tenant in NYC might want a broker if they're going to be stuck paying a broker fee anyway. You might as well have half of that fee going to someone who represents you and might help you avoid getting completely fleeced. Then they have a broker on their side coordinating viewings and dealing with emails/phone calls.
I recently launched an app to rent in NYC without paying silly broker fees. Just find a listing, apply, we validate your financials, create the contract and send the lead to the lanlord/property manager.
If you’re looking to rent in NYC give it a try and give me some feedback.
I’m also looking for a cofounder, either technical (so I can focus more on sales/ops) or sales (so I can focus in tech)
I’m also looking for a cofounder, either technical (so I can focus more on sales/ops) or sales (so I can focus in tech)
> looking for a cofounder, either technical (so I can focus more on sales/ops) or sales (so I can focus in tech)
You'll want an in-house lawyer, too. New York's real estate laws have teeth, and they enable significant private enforcement. Best luck--this market needs disruption.
You'll want an in-house lawyer, too. New York's real estate laws have teeth, and they enable significant private enforcement. Best luck--this market needs disruption.
Correct, there is a “Mafia”. I talked to REBNY, agents etc.
I've met with several prospective entrepreneurs regarding this basic idea. It has been tried multiple times in the last 20 years, and has never caught on.
If you can't figure out why the market still has brokers, you are destined to make the same mistakes that everyone who sunk time and money into this before has made.
If you can't figure out why the market still has brokers, you are destined to make the same mistakes that everyone who sunk time and money into this before has made.
> If you can't figure out why the market still has brokers, you are destined to make the same mistakes that everyone who sunk time and money into this before has made.
100%, this is a societal (political or otherwise) problem to solve - it’s not for lack of an app to facilitate the tx.
100%, this is a societal (political or otherwise) problem to solve - it’s not for lack of an app to facilitate the tx.
for those of us rural folk, why do big cities need brokers?
I think this is a purely New York problem because NYC has been captured by an alliance of property owners and leftist activists who both oppose new development (albeit for differing reasons)
The result is that there is a shortage of housing in NYC and this system pops up to try and extract economic rents from the situation.
The result is that there is a shortage of housing in NYC and this system pops up to try and extract economic rents from the situation.
Can you provide any examples of "leftist activists" opposing building non-luxury housing?
Not the original commenter but, from past articles I've read the most effective way to create affordable housing is to let developers build new luxury housing. That has the ripple effect of directing the old luxury housing to become more affordable, since it's no longer the new thing.
Unfortunately, the economics of building new housing on extremely expensive real estate, targeting an "affordable" price point just don't incentivize as much construction as the city needs.
Unfortunately, the economics of building new housing on extremely expensive real estate, targeting an "affordable" price point just don't incentivize as much construction as the city needs.
In cities like NYC is common for a landlord to own 8-9 buildings with multiple units, they tend to be older and don’t want to deal with tenants, so they hire property management offices, their work is simply to rent the place and maintain the place. To maintain the place they hire a super and to rent the place they get brokers that “volunteer” to bring them quality leads. They get paid by the tenants an unofficial broker fee that amounts to 10-15% the total annual rent. It has worked so far for the landlords and the demand mostly pay the price
In Boston we have brokers but it's not this reason (EDIT: See end). The realtors are really only there as the front door to get the lease signed. The landlord does the rest of the landlording. The claim is that the value add the brokers provide is vetting potential tenants - credit checks, etc as well as the time investment of showing the unit.
The standard fee is 1 months rent and this is almost always paid by the tenant.
The arguments here tend to cluster into two groups: 1) Laws should be passed that the landlord needs to pay the realtor's fee and not the tenant. 2) It doesn't matter if #1 happens as the landlord would just bake it into the rent anyways.
EDIT: I should say it's not just this reason as what you cite does happen. But it's just de rigueur here regardless of if you're renting the upstairs unit of a homeowner or going through a property management company.
The standard fee is 1 months rent and this is almost always paid by the tenant.
The arguments here tend to cluster into two groups: 1) Laws should be passed that the landlord needs to pay the realtor's fee and not the tenant. 2) It doesn't matter if #1 happens as the landlord would just bake it into the rent anyways.
EDIT: I should say it's not just this reason as what you cite does happen. But it's just de rigueur here regardless of if you're renting the upstairs unit of a homeowner or going through a property management company.
The difference is that if it's baked into the rent you would be free to move around more often. Instead, every move costs one month's rent.
One thought is good apartments get dozens of applications that need sorting through, and facilitation of apartment viewings. That's a lot of work, and brokers allow that cost to be externalized to the renter. Now, whether or not it should be externalized is a different question, but brokers serve the supply side.
Sometimes the renter pays, although sometimes the broker is hired and paid by the owner
Need is a strong word. Consider it a sustainable niche born of misaligned incentives and a stunted marketplace. Renting is so profitable that landlords paying a broker to mitigate risk is an obvious choice. Craigslist and other free website options have been seething cesspools of scams, stale data, and disinforming SEO. So brokers are a useful filter for renters too, as the other sources are poisoned.
Also know that the oft-shared window we get on it from individual newcomers to NYC isn’t one the market particularly cares about. Brokers hustling 3br in Sunset Park to quartets of Oberlin grads are the starving underclass of New York real estate industry. They know it and, in their overworked misery, condescend to their market.
Avoiding a brokers fee is a popular tip given to new renters…but it’s availability is largely a function of privilege. If you have the right background and connect with a landlord who appreciates that, you have a fighting chance. (Finding a building you like and asking existing tenants if they know of anything opening is the recommended path to this.) It’s still a low probability event without connections.
Also know that the oft-shared window we get on it from individual newcomers to NYC isn’t one the market particularly cares about. Brokers hustling 3br in Sunset Park to quartets of Oberlin grads are the starving underclass of New York real estate industry. They know it and, in their overworked misery, condescend to their market.
Avoiding a brokers fee is a popular tip given to new renters…but it’s availability is largely a function of privilege. If you have the right background and connect with a landlord who appreciates that, you have a fighting chance. (Finding a building you like and asking existing tenants if they know of anything opening is the recommended path to this.) It’s still a low probability event without connections.
They don't. I live in Houston, it's the nation's 4th largest city (almost tied with Chicago for 3rd). We don't have brokers.
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Quebec got rid of brokers for sales. Not sure what makes them different than the rest of Canada.
What does this offer that StreetEasy + their "No Fee" filter does not?
One neat thing I recently encountered is that people are listing apartments with fees as "no-fee" on StreetEasy.
That is, I inquired about a no-fee listing and was met with "actually, there is a 15% on this listing is that ok?".
To address a sibling comment, there are still bait-and-switch listings as well. Many of these are listed as having been on the market for 50+ days. You can spot these placeholder listings with practice. They're especially common with larger, managed [airquotes]luxury[/airquotes] apartments.
That is, I inquired about a no-fee listing and was met with "actually, there is a 15% on this listing is that ok?".
To address a sibling comment, there are still bait-and-switch listings as well. Many of these are listed as having been on the market for 50+ days. You can spot these placeholder listings with practice. They're especially common with larger, managed [airquotes]luxury[/airquotes] apartments.
The fee is always paid. No Fee = paid by landlord. Usually those no fees are non desirable units (lack of light, etc). In my case tenants pay a transaction fee (3%), lower compared to 15% that brokers charge. I just provide financial validation, a non bias system (software is unbiased, brokers are biased), a digital contract and I provide the lead to the landlord
Please, someone do this successfully in Boston, for the benefit of renters.
As a renter in Boston, I'm motivated to avoid broker cost and the headaches of finding a non-sketchy broker, so it'd be easy to get me to use a reputable service that avoids those problems. But you also have to figure out how to get landlords to use the service, to have properties listed for the renters to rent. The convention in Boston is that the renter pays the broker fee, so landlords decide they might as well use a broker and hopefully reduce headaches, at no cost to them.
(Quick notes: There's lots of turnover in Boston, due to all the universities. Standard practice is the renter is required to pay a broker fee equivalent to one month of rent. Good advice for over a decade is to show up at a showing with your checkbook, and be prepared to pay an application fee within 5 minutes, because it'll probably disappear quickly, and broker might've even scheduled multiple people to see it at essentially the same time. IIUC, rents are currently similar to SFO and NYC. There's also some sketchiness, like rampant bait&switch listings on CL, to generate leads for brokers, since they make thousands of dollars per signed lease. Besides non-broker scams on CL. I haven't seen competing brokers trying to undercut on fee; they seem to compete by having a property they're allowed to show, and somehow getting renters to talk with them instead of another broker.)
As a renter in Boston, I'm motivated to avoid broker cost and the headaches of finding a non-sketchy broker, so it'd be easy to get me to use a reputable service that avoids those problems. But you also have to figure out how to get landlords to use the service, to have properties listed for the renters to rent. The convention in Boston is that the renter pays the broker fee, so landlords decide they might as well use a broker and hopefully reduce headaches, at no cost to them.
(Quick notes: There's lots of turnover in Boston, due to all the universities. Standard practice is the renter is required to pay a broker fee equivalent to one month of rent. Good advice for over a decade is to show up at a showing with your checkbook, and be prepared to pay an application fee within 5 minutes, because it'll probably disappear quickly, and broker might've even scheduled multiple people to see it at essentially the same time. IIUC, rents are currently similar to SFO and NYC. There's also some sketchiness, like rampant bait&switch listings on CL, to generate leads for brokers, since they make thousands of dollars per signed lease. Besides non-broker scams on CL. I haven't seen competing brokers trying to undercut on fee; they seem to compete by having a property they're allowed to show, and somehow getting renters to talk with them instead of another broker.)
The last time I had to rent in Boston I just hired my own broker to do the search - While I still paid the fee, the landlord's agent only got half of it (primary goal) and I didn't have to filter through Craigslist scams
Doesn't one have to pay a broker fee if the listing requires it regardless of how it was actually found?
I would def need more info before attempting to use this.
Also, I don't have an iPhone--and there isn't a web app. I know that's common, but I personally hate things that only operate via mobile app. I think web apps should be primary for most tasks, and mobile apps second. But that's probably an idiosyncratic gripe of mine that you can safely ignore.
I would def need more info before attempting to use this.
Also, I don't have an iPhone--and there isn't a web app. I know that's common, but I personally hate things that only operate via mobile app. I think web apps should be primary for most tasks, and mobile apps second. But that's probably an idiosyncratic gripe of mine that you can safely ignore.
The landlords in NYC don’t like to do anything so they hire property managers, and those are approached by brokers/agents that work for “free” and bring leads to them. In reality whoever brings a solid lead to the property manager wins. I have rented all my apts without paying broker fees by finding who’s the property manager, called them directly, and sign a contract at their offices. Of course I have good credit/finances. I just automated that manual process in software
Cool, thanks.
I think a more formal explanation of the situation would be helpful to put on your site.
I think a more formal explanation of the situation would be helpful to put on your site.
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During normal market conditions (as if there is such a thing in Manhattan), it's been my experience that broker apartments are cheaper than broker-less apartments. Of course, the converse is true if you only amortize the brokerage fees over a term less than 24 months.
In my experience the price is always the same, the house never loses. If the landlord paid the broker fee then they put that amount amortized in the rent, if not then the tenant pays the broker fee but the monthly rent is “cheaper”
FYI: The broker fee situation in NYC is substantially related to rent controls. No reason to show the apartment yourself if you can't get more money from the tenant by doing that.