Over the past month, we’ve had a lot of users come to us looking for only “no-fee” apartments. However, after speaking with them, we realized there was a misconception of the whole fee/no-fee concept. Today, I’m going to write about the different apartment/listing types you’ll encounter, what exactly no-fee means, and why paying a fee may actually be better if you’re looking for a bargain.
What exactly is a no-fee apartment?
First, remember that you can only end up paying a fee if you work with a broker. There are two ways you can find a no-fee apartment.
1) If you’re going through a broker, you may encounter a no-fee unit if the owner offers to pay the broker’s fee. This phenomenon is relatively new. Before the recession of 2008, most owners didn’t pay the fee.
2) If you go to an owner directly, you won’t pay the fee anyway (because you’re obviously not paying a broker fee if you’re not using a broker).
Then what is a fee apartment?
Well, if that just described no-fee apartments? What are fee apartments?
3) Just like in category 2), if you went to a non-exclusive apartment (called an open listing) through a broker, you’ll have to pay a fee.
4) Sometimes, you can only go through an exclusive broker who works with a certain landlord. Some of these landlords have chosen not to pay for the broker’s fee-shifting the burden onto the renters. If you want these apartments, there is no way around the fee. Why doesn’t the landlord offer to cover the fee? Because if the broker’s fee is a % of the first year’s lease, it may encourage only long-term tenants.
What is the better option?
When most renters think of paying a fee, they cringe in disgust. It turns out this causes the fee apartment market to be less efficient – where you can find decent bargains. Also, when most people think of a “fee”, they only think of 2) and 3) – not apartments in category 4). In short, keep an open mind when looking for an apartment. Don’t be turned off by a fee – after all, a $1,500 apartment with a 1-month fee ($1,500 * 12 months + $1,500 fee over the lease) costs the same as an apartment for $1,625. If you’re looking for an apartments, we have listings from all the categories, so check it out.
Editor’s Note: We updated this article to enhance readability.
