For many first time renters in New York City, the fees may often be seen as ridiculous. Often, when a renter first hears "broker’s fee", they are turned off. However, in today’s highly competitive NYC Real Estate market, to go it alone can sometimes be treacherous. What are all those upfront fees that you’ll be paying? Do you really have to pay them?
When applying for a rental, often there are two initial fees. The first is an application fee. This is an amount of money that the rental office, owner or management company may ask for the potential renter to put down while they review your paperwork and credit check (often, you’ll be asked to pay for the credit check as well).
Once you have been approved for the rental, the landlord may ask you for any amount of move-in costs. Often this is the rent for the first and last month. On top of this, they may ask for a one month's security deposit.
Three months of rent up front may seem daunting, but, in New York City, where there is such a low vacancy rate, landlords want to make sure they are getting top quality tenants. Also, those renting the apartment may ask for a key deposit, if they have a special front door, or any number of other smaller monetary fees.
Finally, there is the broker’s fee. This is a number that many tenants balk at. But, honestly, the agents are the people who have connections with landlords and management companies, know the neighborhoods and ensure that you have a smooth approval process.
The average cost put towards a broker's fee may be anything from another month’s rent to 20% of the total yearly rent. Remember, the total amount does not go directly into the pocket of the agent. It gets split with the broker, the company, and the franchise location owner.
Renting in New York can be expensive. It behooves a smart renter to understand where their money goes and how the fees are broken out, including that of their real estate agent.
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