New York City’s rental broker fees are difficult to understand and navigate. There was even a legal challenge to potentially banning NYC broker fees at one point, but they are still around and perfectly legal.
What is a NYC Broker’s Fee?
In NYC, a broker’s fee is the fee a renter will pay to a real estate broker when renting an apartment from them. Broker fees are how your real estate agent gets paid and how brokers get enough money to continue their work.
As a renter, you will have to pay these fees as a part of renting an apartment in one way or another. Broker fees are common in New York City, but you can also find them in most other major cities. However, the landlord typically pays the broker fee in most other cities.
How Much Are Rental Broker Fees in NYC?
Rental broker fees can vary from agency to agency, so it’s best to ask how much the fee is before you work with an agent. For most people, the typical broker fee will be between 8 to 15 percent of the annual rent you would pay.
Most people will pay around one month’s rent to move into a place as a rental broker fee. This is equal to roughly 8 percent of the annual rental price, so it’s on the low side of things. However, 12 to 15 percent is the norm when the rental market is hot.
When Are Broker Fees Due?
Broker fees are due when you sign the lease for a new apartment. In most cases, you will pay them alongside the security deposit and first month’s rent. If you don’t pay them at that point, you may be unable to move in.
Who Pays Rental Broker Fees in NYC?
This is also up to negotiation, but there is a rule of thumb to follow here. You cannot negotiate the fees directly with the landlord. The landlord has the right to determine if they are willing to pay the rental fees to the brokerage, and that’s a discussion they have with the real estate agent.
If the apartment in question says that it has a fee, you have to pay the entirety of the rental broker fees. Most apartments shown by real estate agents have this setup. So, it’s safe to assume that you will have to pay one month of rent for anything you get from a real estate agent.
If a real estate agent offers to show you “fee-free” rentals, then you are not going to be obligated to pay the broker fees. The landlord has already paid them for you as a convenience.
Should You Get an Apartment With a Broker Fee?
If you are using a real estate agent, getting an apartment will often mean you pay a broker fee. Most landlords don’t extend that courtesy anymore. In other words, getting an apartment with a fee is the standard, not the exception.
In many cases, people tend to prefer apartments with a fee for multiple reasons. In most cases, it’s a matter of getting peace of mind.
Why Are No-Fee Apartments Hard to Find?
Most people would love to get a no free apartment, and it’s easy to understand why. But New York City is a landlord’s market, so renters will always line up to get that one chic apartment next door. As a result, most renters are happy to pay a broker’s fee.
Landlords often will pay the fee when they have an apartment they know won’t rent quickly. At times, this is due to a bad layout or a matter of a poor neighborhood. But, sometimes, it could simply be necessary to get the apartment rented as soon as possible.
Do You Have to Pay a Broker Fee in NYC?
You don’t have to pay a broker fee if you don’t want to. You can always ask to view no-fee apartments exclusively, or you can contact a landlord directly. However, if you want to live in a chic market and have specific needs you want met, then a fee makes a lot of sense.
Are Broker Fees Legal in New York City?
This has been a source of contention among renters for a while, and truth be told, several movements have almost banned the practice of charging fees citywide. For a short period in 2019, broker fees were illegal. However, this decision was overturned within a year.
NYC Broker Fees Bottom Line
Broker fees are part of renting an apartment in NYC. Although you can try to avoid them, the majority of rentals in New York City will have a fee. Before you go hunting for an apartment, it’s best to understand what each rental agent will expect for the work they do. That’s why it’s totally fine (and even expected) to ask about the fees each rental brokerage charges.
If you aren’t sure whether you can afford fees, start your search by asking an agent what fees you should expect. This way, you can budget for your move without losing your mind or making major financial mistakes.