Bohemia Blog by Agent Kevin Christopher Martinez
It's the age-old question - Can I make it in the Big Apple where the way is paved and all the best of the best move to chase their dreams? And, will I pay a fee or not to find the apartment that will house me while I pursue my passions?
Here at Bohemia, we have written about this a number of times, but it is always worth a few reminders and a refresher as we head into the busiest and most expensive time of the year, SUMMER.
So here is some info you may or may not know about NO FEE and FEE apartments.
Let's start with Fee apartments.
MYTH: A common misconception is the fee goes directly to the agent that you are paying it to.
TRUTH: The fee is like a pie, and everyone takes their piece. Rarely is the agent showing you an apartment not represented by a larger firm. So if they are part of a larger company, like myself in being represented by Bohemia Realty Group, my firm takes a piece of the pie. Then you have listing managers, the people who personally manage and notify agents when an apartment is ready - they take their slice too. Then sometimes management or third parties are involved in the deal, ranging from processing fees to referral fees for a deal. So your agents could be taking home as little as 30% of the fee. Then you factor in that the agent pays to advertise on Naked Apartments, Zillow, StreetEasy and the like, which is the way you saw the apartment and would not have known about it otherwise. So that's why the fee fluctuates depending how many hungry pie eaters arrive to the table. In the end, as you make a salary, the agent has to be able to make a living off the transaction, and hence the fee to you.
Don't get me wrong - most don’t want to pay a fee. We all want free things. But in New York, you get what you pay for, and if you want the good things, you sometimes have to pay for it.
That leads me into NO FEE Apartments.
What does No Fee really mean?
This means that the management company has agreed to pay the agent and its firm the fee in order to move the apartment faster.
Think of No Fees like the sale rack in a department store. Why is a shirt on the sale rack?
1) It’s out of style - in apartment terms, its not updated or renovated.
2) There is a defect - in apartment terms, it's on the 6th floor of a walkup or in the basement. It has a small kitchen, or one room doesn't have a closet. It could be a multitude of things, but they aren't the ideal things everyone wants.
3) There are too many - this is the best scenario, and it includes management companies that maybe had a lot of units come open at once, or they renovated a lot at once and just need to move them off the market because they sat off the market so long during renovations.
The final thing to remember about no fees is that management companies work that amount they are paying the agent into your rent. No Fee apartments are generally $200-$300 more than a fee of the same caliber, meaning you already start paying a higher rent from the get go. You know your rent will rise each year, so you essentially are paying that fee every year you live there rather than just once in a fee apartment.
Now I understand you might not have the means to pay all that money upfront, which then a no fee is your only option. But if you have the means, in the long run, a no fee will cost you more if you plan on living anywhere longer than 1 year.
So as we head into the busy season, and it's time to move, here are the facts about Fees and No Fees.
Don't forget to call a Bohemia agent once your ready to search. Whether it's a fee or no fee, Bohemia has the most exclusive listings in Upper Manhattan of any firm, so we will be happy to help you find your new home.