How to avoid broker fees in NYC real estate?
Go Back To Previous PageHow can you avoid paying broker fees in NYC? That is the question. Looking for a home can be overwhelming, especially for those new to NYC. NestApple is here to help explain what “broker’s fee” and “no-fee” listings mean. We will make your apartment hunting more relaxing.
NYC Real Estate Market
NYC’s real estate market started booming during the 1870s, around the time of an explosion in housing needs and office space
demand in Manhattan.
This process was a sizeable shift from the farmland-filled land to apartment buildings and skyscraper offices.
Since then, the market has continued to grow, along with property sales and rent price hikes.
The biggest reason for the high demand for real estate in New York City is its land size. Since NYC is made up of islands, it has limited space for new construction. Instead, buildings need to go up. It depends on zoning and the developers’ budgets.
Due to the scarce supply and thousands of new tenants moving to NYC daily, NYC’s real estate value and demand continue to increase yearly.
Are you moving to New York City? Read our rent vs. buying blog post.
The New York City Broker Fee Regulations
If you’ve looked for a rental apartment in NYC, you know it can sometimes be stressful to find the perfect home. 
How will the new broker fee law in NYC affect your home-hunting process?
A broker’s fee occurs when the building’s landlord does not directly lease an apartment. Instead, a broker is recruited to represent the property. This Broker helps the landlord market the space to rent and select a tenant. This broker fee ranges from 8% to 15% of the tenant’s entire year’s rent.
The new broker fee regulation in NYC, passed in February 2020, limits a renter’s fee. The landlord pays these broker fees unless the tenant has hired a broker to find space.
This ban is great news for tenants, as they no longer need to pay thousands of fees. However, a week after this regulation took place, a judge ruled that it was blocked, at least temporarily. This decision means that while both sides of this regulation work to present their cases and a final judgment is determined, brokers can continue to collect their rental commission from tenants.
Why Do You Need a Broker? Avoid broker fees in NYC!
Since a broker’s fee can be high, you may wonder, ” Do I need to pay a broker fee? And why do renters pay this broker fee?”
If this fee is so high, why do people still use a broker to help them? This is because working with a real estate broker who allows you to view apartments can be more comfortable for those who don’t have time. Brokers are helpful because they can help you navigate the confusing parts of NYC real estate. Brokers assess the best units and most convenient neighborhoods for somebody’s particular needs.
Nevertheless, tenants often pay a broker’s fee because the apartment they want to rent is represented by a real estate agent hired by the landlord. The Broker’s fee falls upon the tenant. Even if the tenant found the apartment independently, if the landlord has a contract with a broker, the tenant will still have to pay the fees.
No-fee Apartments in New York City or how to avoid broker fees in NYC
You wonder: what is a “no-fee apartment” and “how to find apartments by yourself in NYC?” Well, we’re here to answer all 
your apartment browsing questions!
A no-fee apartment is rented directly from the landlord and includes apartments where the landlord pays the Broker’s fee.
A great way to find those deals without a broker fee is to search and filter for “no-fee units” online on Streeteasy. Listings will directly state if they are a no-fee apartment. NestApple monitors thousands of apartments and houses in New York City, ensuring you will find what you are looking for—without the broker fees.
Is It Okay to rent a unit with no agent?
While we understand you want to avoid the expensive fee, is renting safe without one?
There are potential cons in looking without an agent.
1. Landlords sometimes choose to pay the Broker’s fee at first. Then, a year later, they raise the rent to compensate for the difference. This can be costly for the tenant in the long term if they stay past the yearly lease compared to paying the commission.
2. Landlords will choose to pay the fee if they need a tenant to fill the space quickly. This sometimes means something could be wrong with the apartment, like a red flag, or even the area. Be sure to research the condo, the building, and the area beforehand. This way, you don’t end up with nasty surprises after you move in!
Have you decided to rent without a broker? NestApple can quickly help you find the truth about any apartment or house you are looking at. Don’t wait for last-minute surprises; check out all the data before signing a lease. Get insights about construction, school districts, transportation, dining, sunlight, etc.
Find your next no-fee apartment on NestApple right now.
Georges has been working in Wall Street for the last 16 years trading derivatives with hedge funds. He has been an active real estate investor for over a decade. Georges graduated from HEC Business School in Paris and holds a master in Finance from ESADE Barcelona.
