As one of the founders of RentHop, I’ve made it a point to infiltrate the Manhattan apartment broker ranks, inspired by Nickel and Dimed (Barbara Ehrenreich). I spend a few days each month as an undercover broker, tackling the full pipeline of previewing, advertising, showing, and closing deals! In this edition of Undercover Broker, we’re exploring the real estate bait and switch in depth.
What is Bait and Switch?
You contact a broker regarding a particular apartment advertisement but then you never manage to see it. The broker tells you that the unit was just rented, but they have many more apartments available. Usually, these apartments charge a broker fee or have a higher-price rent.
Why is it that ordinary, ethical, and law-abiding humans wind up resorting to these tactics? The answer is, it’s your fault! That’s correct; the legions of Manhattan renters who have come before you act just like you, and the most rational response is for brokers to behave as they do. Please let me explain.
Broker Frustrations
Picture for a moment a savvy and organized apartment hunter who sifts through hundreds of ads, makes dozens of calls, and squeezes in an entire day full of appointments with 12 different brokers, 30 minutes each. This is the absolute worst customer for a broker, and sadly, our savvy renter is likely to have a terrible day full of delays, conflicts, and bait-and-switch attempts.
Contrast this with a clueless renter who calls just one broker and agrees to block off an entire afternoon for showings. Not every broker is good, but I’d easily bet the less prepared renter will have the more productive day.
How Did the Broker Get Here?
Some insight into a broker’s life will shed some light here. Most customers responding to an ad will not transact a deal. Brokers only get paid when a deal closes. Therefore, most customers are a waste of time! How does a broker minimize time wasted? Let me present the top four biggest time wasters:
1.) No show customers.
2.) Customers with poor financial qualifications.
3.) Customer that are not serious about renting.
4.) Customers working with many brokers.
And now, pretend you are a broker and a renter calls asking to see the apartment you advertised. Is there time-efficient, low cost way to avoid all of the four big time wasters above? Indeed there is! And this decade old secret is called, “Sure, come and meet me at my office.”
Meet at the Office
It’s brilliant. The broker doesn’t waste any time until you walk in the door (avoid no-shows). Often they may ask that you bring your financial documents or at least fill a long form asking about your money situation (avoid unqualified people). Finally, if the renter has agreed to come to your office, chances are they have blocked off at least a few hours for tours. And if they didn’t, you can be sure they’ll miss their other appointments (solves problems three and four).
Broker Commission
There are still more bonuses. The forms you fill out protect the broker’s commission should you ever get the slightest idea your broker doesn’t deserve to be paid. While you are carefully reading the fine print, the broker has time to search his database for all of the other good apartments fitting your criteria. They suggests a half dozen other places that are great potential fits, and one of their junior assistants will be happy to take you around to all of them (they’re too busy to be the one following you around with the keys for two hours).
Two hours later, you a suitable apartment and saved a ton of time and hassle. But, because you are human, you feel some last minute buyer’s remorse. You cry foul, accuse the broker of bait-and-switch, leave bad reviews on Yelp, curse all brokers, etc. It’s a shame because the broker was acting in both of your best interests; you just didn’t realize it.
So now that you’ve seen the full story, you know the number one way to avoid getting bait-and-switched.
To Avoid Bait-and-Switch: Do Not Meet the Broker at Their Office.
But if that’s the only take-away you get out of this piece, then brace yourself for a sad and painful apartment hunt. You will end up just like our savvy renter who schedules appointments with a dozen different brokers and wonders why they all treat him so poorly.
My Advice: Suck It Up and Allow Yourself to be Bait and Switched
Do yourself a favor. Pick just one or two decent agents, and give them at least a few hours to show you all of their best apartments. Make an appointment, agree to meet them at their office, and agree that you won’t use another broker for any of the buildings he shows you.
At least then, the broker will appreciate that you are a serious customer and can truly tailor your search based on your initial reactions. Again, if a broker knows you are a solid customer who won’t flake out, you will get superb service. Treat brokers as showing robots and they will return the favor!
That said, I’m all for an option where I pay less for some showing robots, but to make that feasible and worthwhile, a whole lot of other things need to happen. I shall cover it in a future edition of Undercover Broker.
That’s all for now. If you are currently looking for New York City apartments, feel free to check out our website or email us directly.
Editor’s Note: We updated this article to enhance readability.
