Property Grunt

Monday, December 20, 2004

Rental Hazing!

Below is an article from the New York Times that profiles people trying to find apartments in the city simply titled "The Hunt". I read this column every Sunday because of the knowledge and entertainment that it presents. Anyone who is considering moving to NYC should read this column since it will save you a ton of money and heartache.

I rarely do this however this couple that was profiled made a series of mistakes that I feel need to be addressed. And they should consider themselves lucky that they have a home.

A Fresh Start Loses Its Freshness

FOR Sara Antunovich and her boyfriend, Orion Montoya, moving from Chicago to New York was an experience so arduous that, had they known, they would have done everything differently.

Ms. Antunovich, 24, and Mr. Montoya, 25, University of Chicago graduates, shared a one-bedroom apartment in the Hyde Park neighborhood of Chicago for $890 a month. But they wished to upend their lives.

"I felt a nagging need to move - if I didn't leave, I never would," Mr. Montoya said. "A friend said: 'You are moving without a plan - that's great. I love when people do that.' I thought she was making fun of me."

Her friend wasn't making of fun of her she was expressing pity for her. Wherever you move to especially if you are coming to New York. You have to figure out how much you want to spend. Where you are going to live and what you need to live. e.g. light, kitchen, bathroom

Last spring, they decided to look for a one-bedroom rental for up to $1,300 in Brooklyn, where they hoped they would find greenery and the "neighborhood conviviality" of Chicago. During two trips to New York, they acquainted themselves with the market.

On the Web, they encountered "a lot of tricks," Ms. Antunovich said. They waited for brokers to show up. "I got a lot of reading done," Mr. Montoya said. One $1,350 "hellhole" was an eye-opener, with "a rotting staircase and some kind of plastic sheeting on the floors," he said. "We immediately upped our price range."

They did two smart things.

1. They went to New York and learned about the market and apartment inventory.
2. After some horrible experiences with brokers and learning about tricks and seeing what they could get they realized that they needed to raise their budget. RULE OF THUMB IN RENTALS. THE HIGHER THE BUDGET THE BETTER APARTMENT YOU WILL GET!

They didn't, however, realize how much a spotty credit history could work against them. "We saw some places that were possibilities," Ms. Antunovich said, "but they didn't see us as possibilities because of my credit."

In this NYC credit is king. Landlords use credit as a tool to determine if you will be able to pay the bills. Moral of the story. Don't want to have spotty credit. Pay your bills on time. And if you do have spotty credit, make a lot of money. Landlords will forgive the credit if you are willing to put down extra security or a year rent up front. But all of the complaining in the world won't change a thing. Want to know what happens when a landlord doesn't check credit. Click onto this link.

Arriving for a job interview in early September, Mr. Montoya took the bus and subway in from La Guardia Airport. From the No. 7 train, Queens looked nice. And so did a $1,450 one-bedroom on 72nd Avenue in Forest Hills, listed by Harari Realty. He sent digital photographs to his girlfriend, wrote checks for a month's rent and security deposit, and flew back to Chicago, he said, with assurances the two could move in on Sept. 15.

Mr. Montoya did everything correctly except for one thing. He did not sign a lease. It doesn't matter if he wrote the checks, it doesn't matter if the broker gave his or her word and assured that the apartment would be available when they arrived. Unless both parties sign a lease that apartment is up for grabs.

As they were loading a rented van, their broker called. That date wouldn't work, she said, because of a delay caused by the city's new lead-testing requirement. "I was furious," Ms. Antunovich said. "We had no lease and no key. We had no claim to this place other than the broker's promise. I said: 'We need to move in tomorrow - if this apartment isn't ready, you need to tell us. Should we start driving or stay here and wait to see what happens on your end?' She said: 'Definitely come, get on the road.' "

See what happened? Now he figures out that since he does not have a lease he has no stake in the apartment. What he should have done was stayed in the broker's office and waited for his application to be accepted or rejected. If it was accepted than he should have demanded that leases be presented and signed by both parties and that they include a guaranteed move in date. Sounds impossible? Actually closing a rental deal can take 15 minutes. The broker can take care of all of the paperwork in their office and anything they need from the landlord in terms of documentation can be sent via fax or email. It all depends on how motivated all of the parties are. He should also put in an application for a second apartment in case the first one fell through. It would have cost him another 50 or 60 bucks but even if he were accepted to both apartments he would not be legally bound to them. An application is not a contract and whether they are accepted or rejected applicants have the freedom to walk away. Likewise for landlords and property managers. If a client is taking too long to make a decision, the landlord or property manager has the right to give it to someone else.

So they did, driving through Hurricane Ivan. Their cat, Cola, paced and panted. But the situation didn't sit well. They had no clear destination. Increasingly worried, they called their broker.

Several conversations ensued on the drive through Indiana and Ohio. They were told several things, Ms. Antunovich said: that they could move in at a later date, that Ms. Antunovich needed a separate application, that the owner was holding the apartment for someone else, that they could have a different apartment.

"We couldn't get a straight answer about anything," she said. "The emotional cost of dealing with these people was extreme." They decided to cut their losses. They hung up the phone and stopped payment on the checks.

"I would rather have anything than an extension of the uncertainty," Mr. Montoya said.

Dan Harari, owner of Harari Realty, denied that his company had strung them along. The checks for rent and security merely started the application process, he said. "We didn't sign any contract that guaranteed" a move-in date, he said, adding that the results of the lead tests were late. What's more, Ms. Antunovich had a "bad attitude and bad credit," he said. "I made this decision to reject them.".

The broker in this situation did not do anything illegal. Ethically, that's another story. Ideally the broker should have informed them that another client was in the running for the same apartment and that a separate application was required for Ms. Antunovich and when the lead test would be completed.

What I suspect what happened was that the broker was putting a set of clients head to head and played them against each other. Whoever was willing to pay a bigger fee, higher rent or had better credit would be the one to get the apartment. Was there a lead test? Perhaps, did the landlord promise this apartment to someone else? Maybe. It doesn't matter because as the broker put it there was no contract that guaranteed a move in date leaving this lovely couple at the whim of the broker.

Bad attitude or no attitude, a rental broker's objective is to close a deal. Very rarely do they care what their clients think of them unless the clients are really, really annoying. The broker took advantage of the situation because he knew there was no signed lease and that the clients were on a deadline therefore they had very few options and they had to rely on him.

The two considered driving back to Chicago, but decided to press on. When they arrived in New York, they drove around until they found a wireless Internet signal, setting up shop next to Starbucks in Cobble Hill in order to find a pet-friendly hotel.

They found the Extended Stay America in Melville, on Long Island, put their belongings into storage, returned the van and realized just how far the hotel was from the city (50 minutes) and the train station (too far to walk).

If they had simply compared the map on the MTA and a map of the Extended Stay America they would figured out it was too far away. In fact all they had to do was make a phone call. In the audio slide show they picked this hotel because of their cat. Pets especially dogs can be a huge liability in renting an apartment since clients can be rejected on just having a pet even if they have impeccable credit.

"The credit check is absurd since I'm not asking for credit but for a place to live, which would take priority over other financial obligations," Ms. Antunovich said. "People pay their credit card late because they have to pay their rent. In terms of bills, rent comes first."

It sounds like she has a brilliant argument, however it’s completely wrong. If you can't pay your credit cards on time, how will you pay your rent on time? The landlord doesn't know you from Adam and needs some type of proof that you can pay for housing.

Issac Matyas of Central Brokerage showed them a loft in East Williamsburg. Ms. Antunovich thought, "This is O.K." It had no walls and no closets. But it had big windows, and the owner was willing to take an out-of-state guarantor, Ms. Antunovich's father.

They moved in late September, at a rent of $1,700. On the way from the hotel, in a car they had rented for the move, they hit a van. Nobody was injured; everybody was shaken. "It was impossible that it was this hard to move to New York," Ms. Antunovich said.

Now, three months later, they have furnished their new place and "managed to make it homey," Mr. Montoya said. "I like it more than I expected to."

Though his job prospect didn't pan out, he is working on other computer projects. Ms. Antunovich, who studied theater and anthropology, is doing temporary work. "We had such upheaval," she said. "We wanted our life back. We were so tired, so drained. Only since Thanksgiving have I felt any measure of settledness."

These people were very, very lucky. They probably got a better deal in the end and were able to find an apartment.

Maybe it was bad luck or bad planning, too much optimism or too little skepticism. They lowered their expectations and raised their price range. They wiped out their savings. "I want to forget it ever happened," Ms. Antunovich said. "I have found nothing productive, nothing to learn from the experience."

This is an understandable attitude however it’s the wrong one to have especially when dealing with real estate. I pray that she makes an attitude adjustment because when she wants to buy it’s just going to get worse.