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Moving to a city and searching for an apartment. Which not only fulfills your requirements but fits into your budget as well, can be a tricky business. While searching for a rental, you’ll come across apartments that will be listed as “no-fee” quite often. You will find many apartments that don’t even mention a fee at all.
If you are new to these things, you’ll soon understand the difference between “no-fee” apartments and standard apartments and the complications of the rental market as well.
In the rental market, the “fee” is the dollar amount that you pay to the broker who helped you find an apartment. The “fee” is short for broker fees. The brokers earn their living through these fees. The fee motivates the broker to find you an apartment real quick.
The fee can range from 8 percent to 15 percent of the full year’s lease. Which roughly amounts equivalent to one month’s rent. Although, the fee is further divided among the brokerage who were involved in the transaction. For instance, the broker would have to share his fees with the listing agent who represents the apartment.
No-fee apartment does not mean that the broker will not get paid. When a broker helps you find an apartment, they will get paid.
If the apartment or the property is listed as no-fee, then the landlord or the property owner will pay the fees. If the apartment is advertised as requiring a fee, then the landlord won’t pay the fee, you will.
If you find an apartment without the help of a broker and deal with the landlord directly without any intermediator, there will be no fee.
A landlord will only pay the broker fee when they need help finding a tenant quickly. To find a tenant as soon as possible, the landlord collaborates with a broker. It is necessarily a marketing strategy that a landlord uses when they need to fill a unit quickly or to make it more appealing to prospective buyers.
The broker helps the landlord in filling the vacant unit faster and the landlord pays the fee on behalf of the renter. In such a scenario, the apartment will be listed as a “no-fee” apartment.
Sometimes, you might come across a listing with OP which means the owner pays. In such cases, the landlord or the owner will pay the brokers to find them tenants, and you don’t have to pay the broker.
In areas where demand is high for apartments and supply is quite low. The landlord does not list the apartment with any broker and does not pay the fees. The rental markets with high demand and low supply. Landlords have the upper hand and their apartments get rented out hurriedly.
In such rental markets, it can be harder to find a no-fee apartment. Most frequently, the renters will have to pay the fees in such cases and the apartment will be advertised as requiring fees.
Sometimes you might get a broker to show you a no-fee apartment and at end of the hunt, you’ll have to pay the fee. They will not differentiate between a fee or no-fee apartment. Their sole job is to get you an apartment and get paid. So, while looking for a no-fee apartment, don’t make a mistake to getting the help of a broker, otherwise you will have to pay them.
Either way, it is better to work and find an apartment without a broker whether it’s listed as fee or no-fee apartment.