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Broker fees are the biggest scam. I’m surprised that StreetEasy or another player like compass hasn’t been able to disrupt on this more. As a renter you basical

Broker fees are the biggest scam. I’m surprised that StreetEasy or another player like compass hasn’t been able to disrupt on this more. As a renter you basically do all the work to find an apartment and then shell out thousands to a broker who… lets you into the apartment for 5 minutes to see it

deegles 3y ago
I paid a broker fee and the day I was moving in the landlord told me it was a fee-free building.
- shoo 3y ago
  Lucky you only had to pay the broker and not the building too. Obligatory: “The door refused to open. It said, “Five cents, please.” He searched his pockets. No more coins; nothing. “I’ll pay you tomorrow,” he told the door. Again he tried the knob. Again it remained locked tight. “What I pay you,” he informed it, “is in the nature of a gratuity; I don’t have to pay you.” “I think otherwise,” the door said. “Look in the purchase contract you signed when you bought this conapt.” In his desk drawer he found the contract; since signing it he had found it necessary to refer to the document many times. Sure enough; payment to his door for opening and shutting constituted a mandatory fee. Not a tip. “You discover I’m right,” the door said. It sounded smug. From the drawer beside the sink Joe Chip got a stainless steel knife; with it he began systematically to unscrew the bolt assembly of his apt’s money-gulping door. “I’ll sue you,” the door said as the first screw fell out. Joe Chip said, “I’ve never been sued by a door. But I guess I can live through it.” -- Philip K. Dick, Ubik
  - reaperman 3y ago
    In the past 1-2 decades we've seen so many things get hyper-monetized which used to be free - playing sports at the park, restrooms, cups of water with a meal, shopping carts that need a quarter to unlock. Ubik was written in 1969; I wonder what trends Philip K. Dick was exposed to between 1945-1969 which led to him imagining a dystopian world not too far beyond where we are today.
yieldcrv 3y ago
Compass was disrupting it 10 years ago and then hired a bunch of brokers and seemingly realized how much they could make with the market inefficiency
mushufasa 3y ago
I think the Chesterton fence here is: - there's more demand for good apartments than supply in NYC - multifamily building owners outsource the process to brokers - building owners can pay brokers less if brokers pass on overhead costs to renters - brokers don't have leverage with building owners because the apartments sell themselves - renters put up with this because there's more demand than supply If you were here during the pandemic, when there was less demand than supply, you would have experienced a time when all those brokers' fees magically disappeared... and brokers were working harder than ever!
- tacticalturtle 3y ago
  But why doesn’t this happen in a city like San Francisco that also has a constrained supply? Many cities have this same fence - but only Boston and NYC have a culture of broker fees.
  - danabrams 3y ago
    Here's a theory... Although illegal now, San Francisco used to have a widespread practice of "key money"--a bribe you paid the landlord to choose you to rent the apartment that due to rent control or other factor was priced below market demand. Because the landlord was capturing the extra value directly, a cultural practice of high broker fees never developed there, while it did in the east, where bribes were less common. Thus someone other than the landlord captured the excess value. It's also entirely possible that the broker's fee is being illegally passed as "key money" to the landlord in a way that's harder to detect/litigate in NYC because it's not direct from the tenant.
- reaperman 3y ago
  The term "Chesterton's fence" implies there's a good chance that something will break in an unwanted way if you remove the brokers fees. I'm curious what would break for the other parties in the transaction. "building owners can pay brokers less if brokers pass on overhead costs to renters" could just as easily be "owners could charge $10,000/year more in rent if brokers didn't capture it".
m-ee 3y ago
I think this was what compass originally intended to disrupt but then realized it was way more profitable to just make tools for real estate agents.
iancmceachern 3y ago
The biggest scam

deegles 3y ago

I paid a broker fee and the day I was moving in the landlord told me it was a fee-free building.

shoo 3y ago
Lucky you only had to pay the broker and not the building too. Obligatory: “The door refused to open. It said, “Five cents, please.” He searched his pockets. No more coins; nothing. “I’ll pay you tomorrow,” he told the door. Again he tried the knob. Again it remained locked tight. “What I pay you,” he informed it, “is in the nature of a gratuity; I don’t have to pay you.” “I think otherwise,” the door said. “Look in the purchase contract you signed when you bought this conapt.” In his desk drawer he found the contract; since signing it he had found it necessary to refer to the document many times. Sure enough; payment to his door for opening and shutting constituted a mandatory fee. Not a tip. “You discover I’m right,” the door said. It sounded smug. From the drawer beside the sink Joe Chip got a stainless steel knife; with it he began systematically to unscrew the bolt assembly of his apt’s money-gulping door. “I’ll sue you,” the door said as the first screw fell out. Joe Chip said, “I’ve never been sued by a door. But I guess I can live through it.” -- Philip K. Dick, Ubik
- reaperman 3y ago
  In the past 1-2 decades we've seen so many things get hyper-monetized which used to be free - playing sports at the park, restrooms, cups of water with a meal, shopping carts that need a quarter to unlock. Ubik was written in 1969; I wonder what trends Philip K. Dick was exposed to between 1945-1969 which led to him imagining a dystopian world not too far beyond where we are today.

yieldcrv 3y ago

Compass was disrupting it 10 years ago and then hired a bunch of brokers and seemingly realized how much they could make with the market inefficiency

mushufasa 3y ago

I think the Chesterton fence here is: - there's more demand for good apartments than supply in NYC - multifamily building owners outsource the process to brokers - building owners can pay brokers less if brokers pass on overhead costs to renters - brokers don't have leverage with building owners because the apartments sell themselves - renters put up with this because there's more demand than supply If you were here during the pandemic, when there was less demand than supply, you would have experienced a time when all those brokers' fees magically disappeared... and brokers were working harder than ever!

tacticalturtle 3y ago
But why doesn’t this happen in a city like San Francisco that also has a constrained supply? Many cities have this same fence - but only Boston and NYC have a culture of broker fees.
- danabrams 3y ago
  Here's a theory... Although illegal now, San Francisco used to have a widespread practice of "key money"--a bribe you paid the landlord to choose you to rent the apartment that due to rent control or other factor was priced below market demand. Because the landlord was capturing the extra value directly, a cultural practice of high broker fees never developed there, while it did in the east, where bribes were less common. Thus someone other than the landlord captured the excess value. It's also entirely possible that the broker's fee is being illegally passed as "key money" to the landlord in a way that's harder to detect/litigate in NYC because it's not direct from the tenant.
reaperman 3y ago
The term "Chesterton's fence" implies there's a good chance that something will break in an unwanted way if you remove the brokers fees. I'm curious what would break for the other parties in the transaction. "building owners can pay brokers less if brokers pass on overhead costs to renters" could just as easily be "owners could charge $10,000/year more in rent if brokers didn't capture it".

m-ee 3y ago

I think this was what compass originally intended to disrupt but then realized it was way more profitable to just make tools for real estate agents.

iancmceachern 3y ago

The biggest scam