Searching for an apartment in New York could not be more of a pain in the ass. After deciding I was not going to renew my current lease in the middle of July, I first notified my management and immediately began to look for a new apartment for a 9/1 move-in. Turns out the September inventory does not get released until partway through August. This makes sense for listings where the tenant is unsure if they will renew until the last minute (30 days) but why are there not listings any sooner? My current apartment, for example, has now technically been “on the market” for almost a month and its not posted online and has not been shown once. In most cities, management companies pay brokers as an incentive to fill vacancies but in NYC broker fees are most often paid for by the tenant and in some cases they are even paid to brokers who have done NOTHING at all. My building uses an exclusive broker, which means that even if I told my friend there was an opening for a 3-bedroom, showed him the building and he were to then apply, my friend would still have to pay a broker.
I had spent a few months working on an idea with a buddy of mine which I can most easily compare to new site Renthackr which allows users to post listings of their soon to be available apartments. While Renthackr does not solve the problem of brokers in NYC, it is a step in the right direction. Another idea we had come across during our research was JumpPost, which would pay tenants $500 to post their upcoming vacancy. While the founders of JumpPost ended up taking the company in a different direction, they claimed to have early success and decent traction. Sites like these are pioneers for a necessary change and in the meantime there are plenty of apartment listings which dont require paying a broker fee. What Ive discovered however, is that the rent essentially factors in a broker fee. For example, an apartment that would go for $3,500/month using a 15% broker fee would cost $4,025 pro rata; the same apartment listed without a broker would likely rent for around $4K as well. The whole process is a crap shoot but if you’re like me and are morally opposed to paying unnecessary broker fees, here are a few management companies and articles to check out.