Having asked dozens if not hundreds of New Yorkers about their apartment hunting experience, one interesting topic is whether you can rip off your own apartment broker. There are various tactics and ploys that have been contemplated, attempted, and executed which we discuss below, but the one common theme in all of them is that you utilize a Manhattan apartment broker’s services and then avoid paying the 10-15% broker fee.
Let us clearly state that RentHop does NOT endorse or recommend such behavior. Cheating your broker is unethical and often results in a breach of contract, which will put you on the losing end of a small claims lawsuit. Broker dodging is also immoral and actually perpetuates the inefficiencies of the real estate market. RentHop recommends and enables apartment hunters to find no-fee listings in the New York City area. However, we also firmly believe that if you choose to use a broker and find your future home as a result, then your broker deserves to be paid. One of the reasons broker fees are so high is precisely because they waste their time with apartment hunters who have no intention of paying fees, leaving honest hunters picking up the tab.
That said, we will discuss a few of the more creative tactics we’ve heard, and hope to convince you not to try any of them.
Broker Dodging Tactics
One out-of-town apartment hunter took a new job in Midtown, and his company offered a three-day house hunting trip. Our hero spent the previous week researching lots of neighborhoods near work and booked a full day of apartment viewings with brokers and owners. Sadly, one owner turned out to be a bait-and-switch broker, and even worse, that broker happened to show the best apartment of the day. Feeling that the broker didn’t deserve a fee, this creative apartment hunter excused himself. He met with his other appointments of the day, only to circle back to the apartment and slip the doorman $60 in exchange for the landlord’s phone number (and a promise to stay quiet about the broker).
That particular story has a happy ending for the renter, but for each of those we have just as many stories about brokers who perform due diligence with their clients. All it took was a quick phone call from the broker to the building manager to confirm that the apartment hunter attempted a broker dodge. Most apartment leases contain a clause specifically requiring the tenant to pay broker fees if a broker has a legitimate claim to said fees.
In one extreme case, our apartment hunter agreed he used a broker, but disputed the broker had any claims to a fee because his friend had already shown him the building prior to his broker’s introduction. The broker fought back in small claims court, which quickly led to an arbitration settlement. The settlement was 100% in favor of the broker! Unfortunately, most broker agreements are precise in their language and cover just about all the bases for boundary cases. The bottom line is, either use a broker or don’t; the half and half approach can be dangerous.
Going Around Their Back
One creative class of broker rip-offs deserves some attention. Some hunters use an accomplice to rip off the broker, namely, your future roommate! In this scheme, two roommates agree to live together, but only one goes apartment hunting with the broker. Afterwards, the one that did not hunt with the broker approaches the management company and signs the lease. That way, the two roommates use the broker’s expertise and listings, yet the only name the broker knows never appears on the lease and allows for an almost foolproof fee dodge.
Unfortunately, the most brilliant part about the tactic is exactly its biggest downfall…. one roommate’s name never appears on the lease! That means the one person signing the lease for the presumably two-bedroom apartment is now solely responsible for the rent. Therefore, they are also the only one who can officially handle tenant matters regarding the apartment. That’s a dangerous situation for both tenants. Should the two have a falling out or need to change their housing arrangements in a jam, many problems can crop up. Think of all the risk being taken, just to save on a broker fee!
Conclusion
RentHop hopes to provide the moral, ethical, and lawsuit-free alternative to broker fee dodging to find your no-fee NYC apartment. Before you question if you would rip off your broker, learn about what you’re lookin for in your apartment search, and review some negotiating tips. Please feel free to try our service, rather than go around ripping off hard-working brokers.
Editor’s Note: This article was originally published in November 2008, and has been updated to enhance the user reading experience.
