Entrepreneurs know that the key to most great innovation isn’t an incremental improvement on the status quo, or a slightly more efficient and optimized implementation of an old spec. As Christensen writes in the infamous Innovators’ Dilemma, the real game-changers in the world are disruptive inventions. When we began creating RentHop.com, the first truly free collection of no-fee apartment rentals, we suspected we were in the midst of crafting one such disruptive technology. By finally breaking up the monopoly on landlord and building information, we naively thought we were disrupting a system filled with inefficiency, dishonestly, and dead weight.
But we were wrong.
Brokers Are Not Evil
Contrary to what many apartment finders believe, most brokers earn their fee. In fact, there is a strange catch-22 that applies to any good apartment broker: Renters are more likely to despise the harder working and more competent apartment brokers! Remember, a great apartment broker makes something that is very hard a lot easier.
Imagine a renter who meets his apartment broker (who shows up early to ensure he is punctual), seamlessly views a half a dozen suitable candidate vacancies (and the doormen all welcome you eagerly), and signs a lease that afternoon (the broker brought the application form). That renter will believe finding an apartment in Manhattan is painless and possibly even enjoyable. It won’t be obvious the broker added much value, since the process seemed so easy, and because finding that $2,000 studio only took 4 hours all in, the broker certainly didn’t add $900 an hour of value!
Or did she?
Good Brokers Add Lots of Value
Before the apartment hunting day began, the broker carefully spent weeks previewing dozens of apartments in her neighborhood of choice. She would personally visit and photograph each unit, then confirm the amenity offerings with the super and doorman. On the morning of the hunt, the broker called the management for each building, obtained unit keys, and called each doorman to confirm the apartment was vacant and available for viewing that day. She searches her company database for the application PDF forms and prints out copies for each apartment. Finally, she maps out an itinerary and includes a few optional nodes should the renter be an above-average speedy browser.
Circumventing Renters Simply Did Not Have a Good Alternative
At last apartment hunting begins. The renter shows up 30 minutes late, apologizing that the previous broker meeting went overtime. They spent 4 hours searching, and finally the renter says complains that the broker fee is too high. The renter ends up finding a sublet with a college roommate (or worse, figures out a way to circumvent the broker and rent one of the apartments). This process can go on for days or weeks until finally a qualified, able, and willing renter comes along to compensate our poor broker!
RentHop.com Offers True No-Fee Manhattan Apartments
Rent Hop offers free, no-fee apartment rentals in the New York City metro area. By providing this information, we hope to accomplish three important goals. First, hunters who insist on a do-it-yourself approach have everything they need in order to succeed in their rental search… but they will have to do all the broker legwork that too many people take for granted. Second, the renters who are determined to circumvent fees will no longer need to abuse honest brokers by utilizing their labor with no intention of ever paying any compensation. Best of all, we offer a full-service broker option, only the broker will not charge you any fees at all!
We work exclusively with no-fee apartment listings, and most of our landlords have agreed to waive your broker fees as well. By using a RentHop.com referred broker, visitors can confidently search for no-fee rentals, and that they will receive outstanding service from a New York licensed real estate agent.
Clearly this concept qualified as a disruptive technology, but contrary to popular belief, we do not believe we are taking any customers away from the standard Citi-Habitats or other traditional brokerages… if anything, we are reducing the number of abusive renters from circumventing their brokers! We’d like to view ourselves as a specialized version of Craigslist, only without the dishonest listings, the bait-and-switch ploys, and the frustrating lack of transparent apartment information.
Editor’s Note: This article was originally published in February 2009, and has been edited to enhance readability.
