Thursday, May 3, 2007

The Special: Real Estate: A Former Rental Agent Comes Clean

Six Things to Know Before You Begin Your Search


A student checking out possible apartments in Union Square. Photographed by Sam Lewis.

By Liz Garber-Paul


I used to be a Manhattan real estate agent. It’s a hard thing to admit if you live in New York. People look at you with shock and disgust, like they’d look at someone who just admitted they enjoy opening car doors on bicyclists or have a thirst for infant blood. My supervising brokers taught me the real tricks of the trade, like how to get the landlord and the renter to pay the fee. But I’ve changed, I promise. No longer do I dream of vacant lofts and the dimwitted clients who’d spend $4,000 a month on them and pay my full fee. However, the experience wasn’t in vain. Though I never made much money, I did learn how to use agents and agencies in the most effective way. So, because I’m such a sweetheart, I’ll reveal what they’re good at and what you’re better off doing on your own.

Know what their job really is.

An agent's job is to match the renter up with the apartment they like and can afford. They cultivate relationships with management companies in order to have exclusive rights over a building or a group of buildings. They also share their listings with brokers all over the city, so most brokers are going to have a lot of similar listings.

They meet with clients to figure out the clients needs and match them up with a reasonable apartment. In exchange, they ask for a commission of around 15% of one year’s rent, which is about two months rent—quite a sizable fee given the average price of a Manhattan one bedroom is $1,750.

Do your homework.

It’s always better to do research before you go talk to a salesman, especially when their commission will be in the thousands. A few months before you move, start looking around the internet. Check out sites like NYC.gov and the New York City Rent Guidelines Board (at Housingnyc.com) to understand your legal rights, like which fees they can charge you and what is illegal.

Keep an eye on rental message boards, like Craigslist, to get an idea of what kind of space you can get in each neighborhood for your price range. When you start to see a favorable trend, go check out the neighborhoods to see if you could handle living there. Try the restaurants, peek into the laundromats, see if they have your brand of iced tea at the deli—these are the things that will make you feel comfortable if you end up there. Also, look around for signs put up by owners or managers. It may seem simple, but calling them directly is still the easiest way to find a place on your own.

Decide what’s most important to you.

Price, location or space: you can only choose two out of three. First, figure out what you can qualify for. If you want an apartment between $1,000 and $1,250, you need to have proof of a salary of at least $50,000, which is 40-50 times your rent. But if, like some New Yorkers, your income is made up of part-time hours and under-the-table babysitting, you’ll have to get a guarantor that makes at least 80 times the monthly rent. Each application can only have one guarantor. If you and your friend are going in on a $2,400 apartment, that means one of you needs to have a friend or relative, usually in the tri-state area, that pulls in $192,000 a year and can prove it.

When you’re ready, find someone you can trust.

Not everyone needs to use an agent. For some, a quick look through the online classifieds will yield the apartment of their dreams. But for others, a months-long search can leave them empty handed. If you end up in that second category, using an agent might be the answer.

A good agent can find you a place in less than a week. Prepare yourself by gathering last year’s W2s, a pay stub, a letter of employment and a recent bank statement to bring with you. If you’re relying on a guarantor, take their documentation and, if possible, the guarantor themselves. There’s nothing worse than falling in love with a place and losing it while you’re waiting for your mother’s fax machine to start working again. Believe me.

At your first meeting, be as specific as possible. Go in with a few location options and know what your price range is, and what your minimum square footage is. They should be able to take you out to see three or four locations that day that meet some, if not all, of your requirements. If they don’t meet your standards, ditch the agent. All they’ll do is waste your time and theirs.

Realize that most times, they can get you a better deal.

Agencies spend years cozying up to Manhattan’s most prominent owners. That means management companies will let agencies do all the advertising and applicant screening for them, and not post any ads themselves.

Ngoc Cong of Best Apartments Inc. says that it’s her job as listings manager to build and maintain exclusive relationships with these accounts. “These landlords have problems marketing their apartments to the public,” she says. “All they have to do is just receive paperwork, get a glimpse of what they’re being presented with and do the approval process.” That cuts their job in half, so many don’t even bother working with the public.

Understand that it’s in their best interest to find you the right place.

Miracles in Manhattan are few and far between. “I’ve seen great deals that are posted by individual landlords who have maybe one or two buildings or a brownstone,” says Cong. “The only thing is, that it’s very competitive.” A beautiful two bedroom on the Upper East Side can be legitimately listed at $1,500, but chances of you winning over the landlord are slim. Landlords, like many professionals, are predictable. They will always choose a single or a married couple over a roommate situation, and they definitely prefer the renter to have an acceptable income instead of dealing with a guarantor. (Some don’t even accept guarantors.)

If your plan is to live with a few friends to drive down cost, it may be harder than you think to get the manager or landlord to call you back. The thought of three people living in their one bedroom may make some ill. But a good agent knows which landlord will let you in. After all, they get nothing for showing you out-of-reach apartments; they only make money if you sign a lease on an apartment they show you.

The agent will make you sign a form before they’re allowed to show you anything. All it should say is that if you decide to take an apartment they show you or an apartment in the building they show you, you owe them the fee. If you’ve already seen a place with one agent, don’t take it with another. You might end up paying the broker’s fee twice.

Like with all major transactions, trust your gut. If you emerge from a meeting feeling slimy, chances are you should find another agent. While the vacancy rate is at 1%, an all-time low, there is never a shortage of agents who are willing to work hard for you—for a price.

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