[HN Gopher] Rent in NYC without paying broker fees
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Rent in NYC without paying broker fees
Author : naticio
Score : 15 points
Date : 2022-07-20 17:22 UTC (5 hours ago)
(HTM) web link (reny-webapp.herokuapp.com)
(TXT) w3m dump (reny-webapp.herokuapp.com)
| tschwimmer wrote:
| When you see anti-consumer stuff like requiring a mostly value
| capturing middle man, your mind should immediately go to
| supply/demand imbalance. If the suppliers are structurally
| advantaged by having limited supply in light of demand(e.g. by
| zoning or high building costs driven [frequently driven by
| regulations and minimums]), then you're going to see the supply
| side try to extract as much value from transactions as possible.
| They can get away with this because they have no competition. You
| can build all the alternative, consumer friendly marketplaces you
| want but supply will not use them because why would they? The
| only solution is to build more housing. You might say that New
| York is one of the densest places in the world already, but this
| is a clear signal that they haven't built enough.
| naticio wrote:
| Agree, but I provide incentives to the supply
| (landlords/property mgrs) to use my app/accept my leads. I will
| not mention more details because it the "secret sauce"
| gbronner wrote:
| I've met with several prospective entrepreneurs regarding this
| basic idea. It has been tried multiple times in the last 20
| years, and has never caught on.
|
| If you can't figure out why the market still has brokers, you are
| destined to make the same mistakes that everyone who sunk time
| and money into this before has made.
| digianarchist wrote:
| Quebec got rid of brokers for sales. Not sure what makes them
| different than the rest of Canada.
| yunohn wrote:
| > If you can't figure out why the market still has brokers, you
| are destined to make the same mistakes that everyone who sunk
| time and money into this before has made.
|
| 100%, this is a societal (political or otherwise) problem to
| solve - it's not for lack of an app to facilitate the tx.
| stevehawk wrote:
| for those of us rural folk, why do big cities need brokers?
| d_watt wrote:
| One thought is good apartments get dozens of applications
| that need sorting through, and facilitation of apartment
| viewings. That's a lot of work, and brokers allow that cost
| to be externalized to the renter. Now, whether or not it
| should be externalized is a different question, but brokers
| serve the supply side.
| spread_love wrote:
| Sometimes the renter pays, although sometimes the broker is
| hired and paid by the owner
| ls612 wrote:
| I think this is a purely New York problem because NYC has
| been captured by an alliance of property owners and leftist
| activists who both oppose new development (albeit for
| differing reasons)
|
| The result is that there is a shortage of housing in NYC and
| this system pops up to try and extract economic rents from
| the situation.
| blueboo wrote:
| Need is a strong word. Consider it a sustainable niche born
| of misaligned incentives and a stunted marketplace. Renting
| is so profitable that landlords paying a broker to mitigate
| risk is an obvious choice. Craigslist and other free website
| options have been seething cesspools of scams, stale data,
| and disinforming SEO. So brokers are a useful filter for
| renters too, as the other sources are poisoned.
|
| Also know that the oft-shared window we get on it from
| individual newcomers to NYC isn't one the market particularly
| cares about. Brokers hustling 3br in Sunset Park to quartets
| of Oberlin grads are the starving underclass of New York real
| estate industry. They know it and, in their overworked
| misery, condescend to their market.
|
| Avoiding a brokers fee is a popular tip given to new
| renters...but it's availability is largely a function of
| privilege. If you have the right background and connect with
| a landlord who appreciates that, you have a fighting chance.
| (Finding a building you like and asking existing tenants if
| they know of anything opening is the recommended path to
| this.) It's still a low probability event without
| connections.
| naticio wrote:
| In cities like NYC is common for a landlord to own 8-9
| buildings with multiple units, they tend to be older and
| don't want to deal with tenants, so they hire property
| management offices, their work is simply to rent the place
| and maintain the place. To maintain the place they hire a
| super and to rent the place they get brokers that "volunteer"
| to bring them quality leads. They get paid by the tenants an
| unofficial broker fee that amounts to 10-15% the total annual
| rent. It has worked so far for the landlords and the demand
| mostly pay the price
| geoffjentry wrote:
| In Boston we have brokers but it's not this reason (EDIT:
| See end). The realtors are really only there as the front
| door to get the lease signed. The landlord does the rest of
| the landlording. The claim is that the value add the
| brokers provide is vetting potential tenants - credit
| checks, etc as well as the time investment of showing the
| unit.
|
| The standard fee is 1 months rent and this is almost always
| paid by the tenant.
|
| The arguments here tend to cluster into two groups: 1) Laws
| should be passed that the landlord needs to pay the
| realtor's fee and not the tenant. 2) It doesn't matter if
| #1 happens as the landlord would just bake it into the rent
| anyways.
|
| EDIT: I should say it's not just this reason as what you
| cite does happen. But it's just de rigueur here regardless
| of if you're renting the upstairs unit of a homeowner or
| going through a property management company.
| runnerup wrote:
| They don't. I live in Houston, it's the nation's 4th largest
| city (almost tied with Chicago for 3rd). We don't have
| brokers.
| [deleted]
| [deleted]
| your_username wrote:
| nocommandline wrote:
| I think this will be better as a Web App than mobile App given
| that people don't expect to be moving that often. Why download an
| App that will be used only for maybe a month?
|
| Making it a web App also increases the chance that people will
| use it. E.g. I might not be thinking of moving now but based on
| your show HN, I could try it and if I like it, will bookmark for
| future use. Being a mobile App, people will probably not install
| it just to try it out if they don't have an immediate use for it.
| naticio wrote:
| This is good feedback, I code faster in swift so i decided to
| build the mvp there, also apartment hunters like me to tend to
| scroll through listings to see if there is something better out
| there.
| collegeburner wrote:
| also webapp means us android plebs can use it. kinda sick of
| apple getting priority and better apps tbh.
| ss108 wrote:
| Doesn't one have to pay a broker fee if the listing requires it
| regardless of how it was actually found?
|
| I would def need more info before attempting to use this.
|
| Also, I don't have an iPhone--and there isn't a web app. I know
| that's common, but I personally hate things that only operate via
| mobile app. I think web apps should be primary for most tasks,
| and mobile apps second. But that's probably an idiosyncratic
| gripe of mine that you can safely ignore.
| naticio wrote:
| The landlords in NYC don't like to do anything so they hire
| property managers, and those are approached by brokers/agents
| that work for "free" and bring leads to them. In reality
| whoever brings a solid lead to the property manager wins. I
| have rented all my apts without paying broker fees by finding
| who's the property manager, called them directly, and sign a
| contract at their offices. Of course I have good
| credit/finances. I just automated that manual process in
| software
| ss108 wrote:
| Cool, thanks.
|
| I think a more formal explanation of the situation would be
| helpful to put on your site.
| [deleted]
| Shindi wrote:
| What does this offer that StreetEasy + their "No Fee" filter does
| not?
| naticio wrote:
| The fee is always paid. No Fee = paid by landlord. Usually
| those no fees are non desirable units (lack of light, etc). In
| my case tenants pay a transaction fee (3%), lower compared to
| 15% that brokers charge. I just provide financial validation, a
| non bias system (software is unbiased, brokers are biased), a
| digital contract and I provide the lead to the landlord
| huehehue wrote:
| One neat thing I recently encountered is that people are
| listing apartments with fees as "no-fee" on StreetEasy.
|
| That is, I inquired about a no-fee listing and was met with
| "actually, there is a 15% on this listing is that ok?".
|
| To address a sibling comment, there are still bait-and-switch
| listings as well. Many of these are listed as having been on
| the market for 50+ days. You can spot these placeholder
| listings with practice. They're especially common with larger,
| managed [airquotes]luxury[/airquotes] apartments.
| naticio wrote:
| I recently launched an app to rent in NYC without paying silly
| broker fees. Just find a listing, apply, we validate your
| financials, create the contract and send the lead to the
| lanlord/property manager. If you're looking to rent in NYC give
| it a try and give me some feedback.
|
| I'm also looking for a cofounder, either technical (so I can
| focus more on sales/ops) or sales (so I can focus in tech)
| JumpCrisscross wrote:
| > _looking for a cofounder, either technical (so I can focus
| more on sales /ops) or sales (so I can focus in tech)_
|
| You'll want an in-house lawyer, too. New York's real estate
| laws have teeth, and they enable significant private
| enforcement. Best luck--this market needs disruption.
| naticio wrote:
| Correct, there is a "Mafia". I talked to REBNY, agents etc.
| uberman wrote:
| You want me to provide your random herokuapp app with my
| financial information to "validate"?
|
| What user is going to be willing to do that?
|
| You create the contract?
|
| What landlord is going to accept that?
| naticio wrote:
| Thanks for the feedback, I'll work more in the landing page,
| regards
| neilv wrote:
| Please, someone do this successfully in Boston, for the benefit
| of renters.
|
| As a renter in Boston, I'm motivated to avoid broker cost and the
| headaches of finding a non-sketchy broker, so it'd be easy to get
| me to use a reputable service that avoids those problems. But you
| also have to figure out how to get landlords to use the service,
| to have properties listed for the renters to rent. The convention
| in Boston is that the renter pays the broker fee, so landlords
| decide they might as well use a broker and hopefully reduce
| headaches, at no cost to them.
|
| (Quick notes: There's lots of turnover in Boston, due to all the
| universities. Standard practice is the renter is required to pay
| a broker fee equivalent to one month of rent. Good advice for
| over a decade is to show up at a showing with your checkbook, and
| be prepared to pay an application fee within 5 minutes, because
| it'll probably disappear quickly, and broker might've even
| scheduled multiple people to see it at essentially the same time.
| IIUC, rents are currently similar to SFO and NYC. There's also
| some sketchiness, like rampant bait&switch listings on CL, to
| generate leads for brokers, since they make thousands of dollars
| per signed lease. Besides non-broker scams on CL. I haven't seen
| competing brokers trying to undercut on fee; they seem to compete
| by having a property they're allowed to show, and somehow getting
| renters to talk with them instead of another broker.)
| alexpotato wrote:
| After both living in NYC for almost a decade and being a landlord
| for more than that, there have been some things I always wondered
| about:
|
| 1. "Broker only apartments"
|
| I had read at one point that up to 60% of apartments in NYC were
| broker only meaning that you couldn't just walk up to the
| building and ask to see a unit. I think this may have been the
| case in the past since it was a "win/win" for both the landlord
| and the broker. For the landlord, they knew that the brokers
| could act as a filter on "lookey loos" and for the tenants, they
| knew that the brokers weren't going to show them bait and switch
| apartments.
|
| I wonder how true any of the above is today given that Street
| Easy etc has become the defacto centralized listing agency and
| all of the meta data about an apartment is now public.
|
| 2. The function of brokers now
|
| I do still see the need for brokers given the incredibly hot NYC
| real estate market if only as someone who can go to open houses
| on behalf of the tenants. It's not uncommon to have open houses
| with upwards of 20 - 30 people show up and at least half of them
| be real tenants who are actively looking. If that open house is
| in the middle of the day, only a broker could go otherwise the
| prospective tenants would have to take off work
|
| 3. Why is the rent so high this year
|
| Couple reasons (I imagine):
|
| - Lots of people locked up 2 year leases in the middle of COVID
|
| - Lots of people spent a year in mom's basement and are now
| thinking "NEVER AGAIN!"
|
| - Higher interest rates mean people who would be buying may now
| rent. I think this group is small given the VAST majority of
| renters skew younger.
|
| - Inflation has led to more cash being around in general
| wollsmoth wrote:
| brokers are still a win for landlords because it allows them to
| actually do nothing.
|
| They don't need to post on streeteasy.
|
| They don't need to host an open house.
|
| They don't need to answer any questions on email or over the
| phone.
|
| They just have to pick a couple brokers and hire a super and
| they're done. They don't even need to pay them because they
| have the tenant for that. They just wait around until the
| broker calls to let them know there's an approved tenant and
| wait for the checks to show up.
|
| The only effort they have to engage in is when it's time to
| evict someone.
|
| A tenant in NYC might want a broker if they're going to be
| stuck paying a broker fee anyway. You might as well have half
| of that fee going to someone who represents you and might help
| you avoid getting completely fleeced. Then they have a broker
| on their side coordinating viewings and dealing with
| emails/phone calls.
| jgalt212 wrote:
| During normal market conditions (as if there is such a thing in
| Manhattan), it's been my experience that broker apartments are
| cheaper than broker-less apartments. Of course, the converse is
| true if you only amortize the brokerage fees over a term less
| than 24 months.
| naticio wrote:
| In my experience the price is always the same, the house never
| loses. If the landlord paid the broker fee then they put that
| amount amortized in the rent, if not then the tenant pays the
| broker fee but the monthly rent is "cheaper"
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