Property Grunt

Monday, June 22, 2009

Live Fee or Diehard

I know it is the wrong Diehard but I think it is the best of all 4.

As everyone knows the rental market is Manhattan is about as flat as Kate Bosworth's abs. A lot of renters are taking advantage of the situation.

Why Are These Renters Smiling?

Besides the rent, what should not be surprising is that the rental fee has become an endangered species. It comes down to the another unsurprising fact that no one has any money. A lot of agents are accepting the fact that 15% is no longer part of the new reality.

I heard some chatter that particular brokerage known for its Starbucks like growth strongly suggested that their agents take a one month fee and abandon any prospects of getting 15%.

The irony is that a lot of their agents responded with an exodus to other companies taking their exclusives with them. Why I find this ironic is that back in the day, negotiating the rental fee was usually verboten and only done on very special occasions. Managers wanted their agents to get their 15% because those managers would get a bigger cut of the pie. It appears that management realizes they can get no blood from these stones.

What has happened is this brokerage and perhaps many others have applied the "Chinatown model" which is to sell cheap but move high volume. In this market this makes sense. If you can't make the money on the big deals, then you make it up by closing as many as possible.

This is welcome news for all you new renters out there. If you can't get a no-fee rental, see if the fee is negotiable. But be ready for a fight. A lot of agents are going to fight tooth and nail for that 15%.

As for all you rental agents out there, do what you feel is best. Just close.