top of page

How to negotiate your apartment broker fee

Yes, it is possible to negotiate the broker fee on your next apartment.


Negotiate the broker fee for nyc apartment

You just found your perfect apartment and are getting ready to sign the lease. Then the broker reminds you that you have a $4,000 broker fee you need to pay. Suddenly, you are less excited than you were a few moments ago. Fortunately, it is often possible to negotiate the broker fee to reduce the amount you need to pay.


In this article we go through a quick guide on some tips and tricks to negotiate your broker fee. For more details on what a broker fee is and why they exist, check out this post on broker fees in NYC.


How much is the broker fee?


It is important to start with how much the fee is before determining if you can negotiate. Broker fees typically range from 8-20% or from one month to two and a half month’s rent. If your broker fee is on the lower end of these ranges, it will be much more challenging to reduce. If it is on the higher end, you’ll have much more opportunity to negotiate.


How does a broker make money?


This question might seem out of place, but it is crucial to understand in order to maximize your chances of negotiating a lower fee. A broker’s main job is to rent out as many apartments as they can. Each apartment takes time; they need to list on various sites, screen applications, answer questions and show the apartment. As a result, the way for a broker to increase their income is to try and rent apartments as quickly as they can and move on to the next one. The more apartments they rent, the more money they make.


Important factors for lowering your broker fee


Due to the commission nature of the broker fee, the broker makes more money for more expensive apartments. As a result the fee as a percent will typically be lower as the apartment price gets more expensive. You also have more room to negotiate an expensive apartment since the overall broker fee is higher.


Unfortunately, we don’t all have the luxury of renting expensive apartments, so what can the majority of us do for our normal apartments? The two things you need to balance in a negotiation are the broker’s desire to close quickly and your competition. The first you already know about because you’re a savvy renter and you took the time to educate yourself on how a broker makes money.


The second can be a lot more difficult to determine. Brokers will often tell you how busy they are showing the apartment or how many other people have applied because they are trying to create a sense of fear and urgency from the renter. You don’t want to miss out on this deal just because you want a lower broker fee, right? However, understanding that this is just part of the game that broker’s play can help you feel a lot more confident in these discussions.


With that said, if there is an open house tour and you see multiple other people showing up, you can probably assume that there is enough demand for the apartment that the broker will not be willing to negotiate the fee.


So how do you negotiate the broker fee?


Use the broker’s incentives to your advantage! You know they just want to close and move on and you know that your weakness is competition from other renters.


If you have identified an apartment you love, go ahead and apply. Once you are accepted, this is the perfect time to negotiate your broker fee. At this point the broker wants to just close the deal and move on to the next one. Tell your broker that you are ready to sign the lease but the only thing stopping you is the broker fee. If they can reduce the fee by $200 (you pick the amount) you would be able to sign right now.


This strategy doesn’t always work and be prepared for the broker to refuse your offer. It is up to you to determine how hard you want to push. Jut be aware that if you draw a line in the sand, there is a chance that the broker moves on with a different applicant.


How much can you lower the broker fee?


This goes back to the point above about understanding where your broker fee is in the realistic range. If you are on the lower end of the range, you may not be able to reduce the fee much or at all. If you are on the higher end of the range, try to pick a number that is lower, but still within the range. For example, if your broker fee is 15% and you ask the broker to lower it to 6%, there is a very low chance of the broker agreeing. However, if you ask them to lower it to 13%, they may agree. And for a $3,000 per month apartment, you would have just saved yourself $720. Not too bad!


It never hurts to try


Now that you know the strategies for negotiating your broker fee, remember that it doesn’t hurt to try. The biggest risk is that the broker ignores your request and rents the apartment to another applicant. However, that is an unlikely scenario and more typically, the broker will just refuse your request but still rent you the apartment.


And in some cases, the broker agrees and you just saved yourself some hard earned cash. So get out there and go negotiate your broker fee with confidence!


For more tips and tricks on renting in NYC, check out our other posts here.

962 views

Recent Posts

See All

Comments


bottom of page