“Get Real!” with Mildred Wong
MYTH: Always insist that your agent show you NO FEE apartments only. That way you won’t get stuck with paying a broker fee.
FACT: It is important to view ALL available apartments that fit your needs. EVERY apartment rented through a real estate broker agency comes with a fee equal to one month’s rent.
Fee and no fee apartments are simply apartments. For a no fee apartment, the landlord pays 100% of the fee. For a full fee apartment, you pay 100% of the fee. For a “split” fee apartment, the landlord pays 50% and you pay 50% of the fee. There are also listings that are ¼ fee and ¾ fee. Whatever portion is not paid for on your behalf, you are then responsible for.
If I don’t use a broker, I can save on the fee, right? GET REAL! In Boston, you really do need a broker in order to gain access to most listings. The fee structure will vary from listing to listing; your agent will let you know what the fee is for each apartment. The current economic climate and the number of vacancies will dictate whether landlords will pay the fee. As mentioned in last week’s article, Boston’s rental market remains tight with unprecedented vacancy rates, so expect to pay the full fee.
When landlords put their apartments on the market, they need to cover their expenses, and will often incorporate variables such as heat, hot water, taxes, maintenance, and fees into the rent.
Paying a fee can actually work in your favor! If you do not plan to move for the next two or more years, paying the lower rent with full fee will make sense financially. For example, for $1500 the tenant pays the full broker fee; for $1550 the fee is split – tenant pays half the fee and landlord pays half the fee; or for $1600 the landlord pays the full broker fee. It is the same apartment, just three different rents with three different fee structures. By paying the lower rent of $1500 with the $1500 fee spread out over three years, you will be paying $1541 a month, less than the other two fee structures!
When apartment hunting, working with multiple agents from different neighborhoods will give me the most options. GET REAL! Working with more than one agent will actually dilute the process and place you at a competitive disadvantage versus other apartment hunters. Real estate offices may claim to have “the best” or “the most” listings, but most have access to the same list of landlords. With increased electronic and online advances in real estate software and databases, an agent can view listings in all neighborhoods … even throughout the state! An efficient agent will show you a range of apartments, allowing you to see ALL available listings that fit your needs and budget in one productive block of time so you can make an informed decision.
Your home should be a place you look forward to returning to every day. When apartment hunting, put broker fees aside and instead, focus on the cost of rent, included utilities, amenities, and location. You will more likely find a place you love, and remain in, saving you time and money hopping from apartment to apartment every year.
CALL TO READERS: In the process of apartment hunting and have questions? Call or email and your topic could be the next discussion. Mildred Wong is a Licensed Real Estate Agent at City Central Realty, LLC. She can be reached at 617-236-2020 or firstname.lastname@example.org. Follow her on Twitter: @GetRealwMildred.