NYC apartment hunters look to unorthodox methods to dodge brokers' fees
New Yorkers — experts at adapting to difficult environments — are using a variety of innovative techniques to avoid paying brokerage fees when looking for apartments.
Jason Yoon, 34, who moved back to New York City from Rhode Island in December, created a Facebook event in March with a May 31 target date. The “event“ invited many of his 800-plus Facebook friends to help him in his quest to find a great apartment for about $1,000 a month — a find that’s unlikely as a diamond on a sidewalk.
A Facebook event, as opposed to a Facebook group, “becomes like a list serve, and gets on people’s radar more. … It gets the conversation going,” explained Yoon, the director of arts education at the Queens Museum.
Indeed, it did. Yoon ultimately found a fee-free $1,075-a-month co-op sublet in Jackson Heights via Craigslist by using a “no broker” filter, but his Facebook event “generated a lot of good leads,” he said.
Yoon was determined not to use a broker or to pay broker fees, which are typically equal to a full month’s rent, 15% of the year’s total, or in some cases even more.
“The agency fees are crazy, but you don’t need to go to agencies,” said East Village resident Sara Moreno, 28. “You can do it on your own.”
Moreno, a financial analyst, found her $2,000 two-bedroom in the East Village in December by approaching the landlord as the keys were being surrendered outside by a departing tenant.
“We really got a deal,” Moreno happily recalled.
The Manhattan vacancy rate is even tighter this year - a gaspingly small 1.6% - than last year (2.51%), according to May’s Douglas Elliman Report. And “median rental price gains have been robust” for the last two years, according to the research, meaning that rents continue to gallop heavenward.
The median Manhattan rent, for example, is now $3,200, and the overall average is a honey-clutch-the-pearls $3,951. The Brooklyn average is $2,969 a month, according to Elliman.
Some renters kvetch that it’s almost impossible to score a great apartment without a broker because more landlords are delegating the filling of their apartments to middle men. The Real Estate Board of New York (REBNY) does not keep statistics on what percentage of apartments for rent are only available through brokers, but apartment hunters complain that brokers are often the doorkeepers to much of the city’s superior housing stock.
Using a broker is a win-win for the landlord, who is spared the hassle, time and expense of finding and screening suitable tenants while renters are saddled with the obligation to pay.
Lawrence Lewitinn, 40, a licensed real estate broker and ex-hedge-fund trader who now works as a television producer, was so disgusted by the travails of his less affluent artist friends searching for apartments, he started a social networking site, socialisting.com, so they could post leads and needs about rentals, sales, shares and sublets, and avoid brokerage fees.“The way you find places at the lower end is through social connections,” said Lewitinn.
“Dozens” of people have found apartments through socialisting.com since he launched it in 2011, said Lewitinn, who collects no fees for the site.
Socialisting.com has since evolved and expanded into a transactional Craigslist/Angie’s List-style site that also allows users to post job listings, situations and recommendations, and items for sale and for free.
Despite having a broker’s license, Lewitinn said many NYC rental brokers — in addition to charging exorbitant rates — are reluctant to co-broke because they don’t want to split fees. They withhold critical information, care little about the financial difficulties facing their clients and often lie, Lewitinn said.
“They bring shame to the profession,” he said.
In a statement, Michael Slattery, the senior vice president for REBNY, countered that “buyers and renters who use REBNY brokers are working with individuals who have the most accurate and comprehensive knowledge of the real estate market and the local neighborhood, and are bound by a code of conduct that will ensure they receive the highest quality professional service.”
Still, a lot of enterprising renters prefer investing some time and perhaps shoe leather to find an apartment on their own rather than delegating the task in exchange for a hefty fee.
“We saved close to $6,000” by targeting a neighborhood, jotting down numbers and negotiating with owners directly a few years ago, said Greg O’Brien, a software salesman who lives in Midtown East. “My wife and I will be looking for an apartment again in November, and we’ll be walking around neighborhoods” and doing the same thing, he said.
“I’m so glad we kept looking instead of settling,” said Valentina Galindo, 22, a quality assurance worker who recently found a bedroom apartment she splits with her sister in Flatbush. Like Yoon, Galindo lucked out using the “no broker” filter on Craigslist.
Of course, people can also encounter cons in the caveat emptor universe of Craigslist. Before signing anything, apartment hunters should Google the landlord and the address of the building they are considering to see what complaints have popped up in the past and how they've been handled, Lewitinn advised. Networking on foot in neighborhoods, buildings and chatting up doormen and supers is also smart, he said.
The truly savvy and endlessly patient target the neighborhoods and buildings in which they wish to live “and go through the New York City property records. Find the owners through public records. It’s a lot of work, and they may have an exclusive agreement with a broker, but maybe they don’t,” said Lewitinn.