There is a tremendous amount of confusion among people looking to rent apartments in NYC about what kind of properties can be rented without broker fees.
So in order to clear up that confusion, let’s talk about the four classifications of rental property in Manhattan. For three of he four types of property, you’ll pay a broker fee.
Here are the four types of rental apartments in Manhattan:
- Open Listings: No fee, no broker needed–you’ll do the work on your own.
- Limited Listings: Broker protected–you’ll need a broker and you’ll pay a broker fee.
- Exclusive Listings: Broker protected–you’ll need a broker and you’ll pay a broker fee.
- Pocket Listings: Broker protected–you’ll need a broker and you’ll pay a broker fee.
With open listings, the landlord markets directly to the public. Stonehenge is a great example. If you view these buildings without a broker, you will not pay a fee. If you view these buildings with a rental broker, you’ll pay a fee. Sometimes, however, the owner of the building will compensate the broker instead, but this is very rare.
There are six ways to view an open listing:
- There may be an on-site leasing office that gives apartment tours.
- The key may be with the doorman. (Often specified on listings as “KWDM.”)
- The building’s super may show you the apartment.
- You might have to pick up the keys at a management office before going to the building to see the apartment.
- Sometimes there will be an open house.
- You can also view an open listing with a broker, but, of course, you’ll have to pay him his broker fee.
In these types of listings (if you opt not to use a broker), you do all the work yourself, from finding the apartment to signing the lease. If you’d like to view other apartments that are not open listings, however, you’ll need a broker to get access. Let’s go over the three types of listings that always require a broker:
Limited listings are listings by building owners that are not marketed directly to the public. The building owners will choose a limited number of brokers who can market, show, and lease their apartments. This means that you can only view the apartments through the brokers selected by these landlords, which also means that not all brokers have access. With limited listings, there are often multiple brokers from different agencies advertising the same apartment. While other brokers may know of these buildings and the listings, the landlords will not process their rental applications.
Exclusive listings are listings that go through one agent because of an agreement that has been signed between that agent and the building owner. This means that all viewing and applications must go through the exclusive agent. Every agent who is a member of the Real Estate Board of New York has access to these listings, so your broker fee will be split between the exclusive agent and the agent that represents you.
Pocket listings are listings by landlords who have unofficial relationships with a limited number of brokers, but have not signed exclusives with any one agent. There may only be one or two agents that have access to these properties.
So let’s recap:
If you do not want to pay a broker’s fee, then you must conduct your search on your own, and will only have access to open listings.
Limited listings, exclusive listings, and pocket listings are only available by using a rental broker.
No matter what type of listing you’re dealing with, if you use a broker, you are going to end up paying a broker fee.
The only time this is not true is when the owner of the building is compensating the broker. In Manhattan this is rare. Currently only 3 percent of all of the open listings fall into this category.