{"id":1577,"date":"2024-11-13T17:26:48","date_gmt":"2024-11-13T22:26:48","guid":{"rendered":"https:\/\/blog.openigloo.com\/?p=1577"},"modified":"2025-02-13T15:24:59","modified_gmt":"2025-02-13T20:24:59","slug":"broker-fees-in-nyc-how-does-it-work-and-who-pays","status":"publish","type":"post","link":"https:\/\/blog.openigloo.com\/broker-fees-in-nyc-how-does-it-work-and-who-pays\/","title":{"rendered":"Broker Fees in NYC: How Does It Work? And Who Pays?"},"content":{"rendered":"\n

Broker fees are almost always a cause of confusion and frustration for New York City renters. So, what is a broker fee? It\u2019s a fee you pay to the agent or broker who is managing the listing. In New York City, renters are responsible for paying this fee, even if they did not explicitly choose or hire a broker. However, a new policy called the FARE Act passed in NYC<\/a> on November 13, 2024. This law states that whoever hires the broker, needs to pay the fee. This is expected to go into effect in May 2025. So until then, renters are still on the hook for broker fees! (Note that agent and broker are interchangeable terms in NYC.) So here are 9 FAQs about NYC broker fees:<\/p>\n\n\n\n

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1. How much is a broker fee in NYC?<\/h2>\n\n\n\n

A typical fee is up to 15% of the annual rent (or roughly 2 months rent). So if your apartment is $3,000 a month, your fee would be $5,400. [$3,000 x 12 months x 15% = $5,400.] You pay this fee to the listing agent at signing. It\u2019s usually a separate fee that you make to them.<\/p>\n\n\n\n

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2. Can I negotiate a broker fee?<\/h2>\n\n\n\n

Broker fees are negotiable, and it doesn\u2019t hurt to try. If the market isn\u2019t super competitive, you can always try and negotiate the fee lower. If you are hiring your own broker you can set the terms with them. If the apartment is popular and many people want it, negotiating the fee is probably not the best idea. The broker will go with the applicant who is willing to pay the highest fee.<\/p>\n\n\n\n

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3. Is there a limit on how much a broker can charge?<\/h2>\n\n\n\n

There\u2019s no legal cap on how much a broker can charge. While the typical fee is 8-15% of the annual rent, brokers can charge more or less. If there is a lot of demand for an apartment, brokers may try to up the fee. There was an example of a broker charging $20,000 as a fee<\/a> for a rent-stabilized apartment on the Upper West Side.<\/p>\n\n\n\n

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4. Who pays the broker fee in NYC?<\/h2>\n\n\n\n

The current law<\/a> says that renters are on the hook to pay the broker fee. However, a new City Council proposal called The FARE Act<\/a> just passed in November 2024. This is a piece of legislation that states that the person who hires the broker pays the broker. This law is expected to go into effect in May 2025. Until then, renters still need to pay the fee.<\/p>\n\n\n\n

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Learn more about rental laws<\/a><\/div>\n<\/div>\n\n\n\n
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5. Are there no-fee apartments in NYC? How does it work?<\/h2>\n\n\n\n

There are No-Fee apartments in NYC. These are apartments where either the landlord is paying the broker fee or hasn\u2019t enlisted a brokerage for support. Filtering your search to no-fee apartments is a good way to save money, but it does limit your option pool of apartments. Only about 20% of availability in NYC is \u201cno-fee\u201d. However, you may find more no-fee apartments during the low rental season (typically in Winter). Additionally, many “fee” apartments are rent-stabilized. So filtering out “fee” listings could also eliminate a lot of these apartments from your search results.

Keep in mind, the above notes will not be applicable when the FARE Act goes into effect – because essentially all advertised listings will be “no-fee”. <\/p>\n\n\n\n

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Read More About Rent-Stabilization<\/a><\/div>\n<\/div>\n\n\n\n
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6. What happens if I have a broker and the landlord has a broker? Who pays?<\/h2>\n\n\n\n

In this case, the brokers will negotiate amongst themselves on splitting the fee. You should NOT pay a full fee to both your broker and the landlord\u2019s broker.<\/p>\n\n\n\n

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7. What are the benefits of using a broker to rent an apartment in NYC?<\/h2>\n\n\n\n

Agents and brokers are licensed professionals. That means they understand the market and regulations of renting in NYC. In many cases, they also know what apartments are available before they are broadly posted online. If you’re new to the city or have never rented before, enlisting the help of your own broker may be wise. If you hire a broker, you can expect them to send you available listings you may like, schedule showings, help you put your application together, and follow up with landlords about applications and approvals. They can also help you avoid rental scams<\/a>, which are rampant in NYC. If you hire a broker to help you, you should pay them for their time and services. To make the process smooth and transparent, have a discussion with them before working together. Ask them what their services are and what their fee is. <\/p>\n\n\n\n

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8. What are the cons to using a broker to rent an apartment in NYC?<\/h2>\n\n\n\n

The biggest con is the price, especially when you feel the broker is not helpful. 15% is a hefty fee to pay. If you are confident that you know what you\u2019re doing, and you\u2019re an experienced renter, you may be able to avoid using a broker and connect directly with a landlord or building.<\/p>\n\n\n\n

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9. The broker didn\u2019t do anything or help me. Why do I still have to pay?<\/h2>\n\n\n\n

This is a frustrating reality of renting in New York. Even if you feel that the broker didn\u2019t help in any way with your leasing process, you still have to pay. This is a big reason why the FARE Act was passed – to address this dynamic and allow renters to apartment hunt without having to pay a broker fee to someone they did not explicitly hire. <\/p>\n\n\n\n

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Read and share reviews<\/a><\/div>\n<\/div>\n\n\n\n

Did you use a broker to find your last apartment? How was the application process and experience? Share an anonymous review on openigloo, and help the next renter that considers your building and landlord. <\/p>\n\n\n\n

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Google Reviews<\/h2>\n\n\n

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