I don't usually do rentals I prefer to sell. However every once in a while a client will call that needs a rental usually a short term rental during a renovation or as an interim until they buy something. Often they will say "I don't want to pay a Broker Fee. I'm a broker, broker's get a fee. I tell them to look on Craigslist.
In the past I have had exclusive rental listings when the rental market was not as tight as it is now. I would have the owners pay the broker fee so I legitimately could advertise "No Fee".
Scroll through rental advertisements on Craigslist, you will notice many "NO FEE" alerts with asterisks and exclamation points for maximum visibility.
Unfortunately most of these postings are not for real they are bogus. A city council report released last week warned that about a third of brokers who list no-fee properties are lying.
In September, the City Committee on Oversights and Investigations called 223 real estate agents who had advertised no-fee apartments on craigslist.org and backpage.com, two popular websites that list classified ads. When asked if they charged a broker's fee, 31% said they did, despite their ad. Another 4% said the cost was actually noted on the posting, in miniature print at the bottom. Of those fees, 87% charged one month's rent or 10 to 15% of the annual rent.
Another activity that many of these agents are doing that was not in the City Council report but I discovered last week when a client and friend called me about a listing in Craigslist that sounded like it was in my building is that these agents are advertising other agents exclusive listings. They don't give the exact address and only have a cell phone number in the ad. When they tell the caller about the fee they tell them there is another agent involved.
You can not put an ad in a newspaper that is dishonest. Newspapers ads are expensive and every Tom Dick and Harry agent does not have an account or would not be authorized to put an ad in The New York Times. Craigslist is free and it takes 1 minute to post an ad and you can post anonymously.
The committee suggested that the department increase its fines for violations, which range from $50 to $500, and that it relay any findings to the state Department of state, which can revoke an agent's licence.
Craigslist founder and owner Craig Newmark said they kick repeat offenders off the site. They currently rely on the community and other brokers to report the bad apples.
RENTER'S BEWARE!
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I am not sure I understand. Who receives the fee? And who usually pays it when it is done right?
Real estate is local. We don't have this issue in Metro Detroit...