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How and When Can You Negotiate a Broker Fee?

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Welcome to Ask a Rental Agent..., part of Renters Week 2012 here at Curbed Boston. Nick Warren, president and C.E.O. of Warren Residential Group, is here to answer readers' questions on renting in the Hub. Email us your questions today and get an answer later this week!

What's the standard rental agent commission and is it negotiable? How do I negotiate?

Paying a broker fee is something that comes as a surprise for many renters. Unless you have lived in a major urban market such as New York or San Francisco, you have probably never had to even use a broker to find an apartment.

While legally I can't talk about any kind of industry "standard" (it's considered price fixing if I do!), I can tell you that we charge a broker fee equal to one month's rent here at Warren Residential. This is disclosed to our clients through a form called a "Brokerage Fee Disclosure," which informs our clients that we are owed one month's rent for any apartment we introduce to you that you decide to apply for and are accepted for by the landlord. This fee is due at the time of acceptance and is owed even if you decide not to move forward with a lease. If you are rejected by the landlord, there is no fee charged and your deposit will be refunded. The lesson here is that it's definitely not a smart idea to apply for more than one apartment at a time since you could end up owing more than one brokerage fee if you are accepted to both!

We are often asked if the fee is negotiable. A lot of this depends on simple supply and demand. You will begin to see more and more "No Fee" apartments being listed as supply increases and demand decreases. What "No Fee" really means is that the landlord is choosing to pay the brokerage fee to us, for you, in order to make their listing more attractive. In the current Boston rental market we are not seeing as many "No Fee" rentals as in past years. Vacancy rates in the city are extremely low and landlords can ultimately name their price and terms.

We will often still try to negotiate with a landlord for our clients, but usually recommend against it in a really hot, fast-moving market since another application will likely come in, taking a desired apartment "as advertised." But, if our clients want to take the risk, we inform them that by asking for the landlord to pay part of the fee, they most likely will not budge on their asking price or terms.

Hopefully, the influx of the thousands of apartment units being built over the next 12 to 36 months will create the supply needed to get back to a balanced market. This will most likely result in some landlords having to pay fees or offer months of free rent to create an incentive for renters to choose their apartments.

Want to follow up with Nick further? Email him here.

· Our Latest Rental Heatmap: the Hub's New Apartment Buildings [Curbed Boston]
· Our Renters Week 2012 archive [Curbed Boston]