New York City is currently inundated with rentals, so if you’re hunting for a new place, you may be in luck. Not only are rents coming down and more landlords willing to offer concessions, these days brokers are more willing to accept a lower fee—taking some of the sting out of renting an apartment here.
Like just about everything else in NYC, the pandemic has upended the rental market, shifting power to renters. A rising vacancy rate has resulted in more than 67,000 available units in July, the highest number recorded since 2010, according to StreetEasy. And some brokers—who are facing increased competition after a very slow spring—are more open than before to negotiating their fee—usually 12 to 15 percent of one year’s rent. Brokers that Brick spoke to say they’ve been willing to shave from 10 to 50 percent off their typical fee in order to seal a deal.
“Everybody is trying to figure out how to get renters into their apartments,” says Robert Khederian, a real estate agent at Compass.
He recently worked with a client who was not able to pay a full broker’s fee, so he agreed to reduce the commission by half, to 7.5 percent to get the deal done, and the landlord agreed to cover half of that, so the client and landlord each paid 3.75 percent of a one-year lease. “It’s all so case-by-case,” he says.
Renters are willing to walk away
For some renters, negotiating the broker fee is a must because of their finances. “We tried to negotiate on the fee because we had to,” says one renter, a city planner who recently moved from Los Angeles to Brooklyn. He and his wife saw an apartment—a two bedroom in Ditmas Park with an asking rent of $2,750 a month—that they decided to take right away.
Originally, the broker quoted a fee of one month’s rent. “There was not enough money to flush almost $3,000 down the drain for a fee on top of the first month and security, and if the broker hadn’t budged, we would have had to walk away,” the renter says. “[The broker] was immediately amenable to negotiating.”
After some back and forth, the couple signed the lease and agreed to a $1,000 broker’s fee. “I'm opposed to brokers fees on principle,” the renter says, “[but] the combo of moving from California during a pandemic and negotiating it to one-third of the asking price made us feel like this one time it was worth it to bite the bullet.”
Where you’ll have the most luck
“Deals are still being made for a full 15 percent fee,” says Becki Danchik, a broker with Warburg Realty. “If I have a listing that’s unique in some way and there’s not much comparable inventory, I may be less flexible on the fee at first.” But if it’s been on the market for a while or doesn’t have that special something, you may have better luck.
One broker accepted a lower fee from a client who moved into a luxury rental building in Williamsburg and says it’s more common to negotiate the fee for apartments that are in the $2,000-$4,000 per month range.
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This agent recently offered a client a reduced fee on an apartment in a new Williamsburg rental building, asking for 7.5 percent of a year-long lease rather than a full month’s rent—which saved his client about $700. The broker had previously helped this renter find an apartment in Manhattan, but when the pandemic hit, the client decided he wanted to move to a larger apartment, where working from home would be more comfortable, and offer better amenities (including spacious, shared workspaces). The fact that they had a previous working relationship made the broker more flexible about his fee.
Renters have the advantage right now
But given the circumstances of the market right now, you may want to ask for a discount just to see if negotiating is possible.
“We saw a lot of places, including the one we got, where people were breaking their leases to move out of the city,” says another renter who negotiated a lower broker’s fee on a two bedroom for $3,250 a month in Prospect Heights. “The landlord wanted the place to sit on the market for as little time as possible, putting us at a slight advantage to negotiate,” she says.
The renter and her boyfriend were originally quoted a fee of 13 percent of one year’s rent (so just over $5,000) by the broker who was showing the apartment. They eventually agreed to pay 10 percent of a year’s rent, plus an additional $100 because the landlord asked them to sign an 18-month lease.
“We were pretty confident that the worst we would hear is, ‘Sorry, no, I can't accept a broker fee that low’ and then we'd either keep negotiating or press on and find a different place,” the renter says.