Understanding the Brokers Fee
What is the brokers fee?
A brokers fee is a one-time fee Real Estate professionals charge for their services. In Massachusetts, the brokers fee is usually equal to one months rent. Fees are listed in 3 categories: FULL FEE, HALF FEE, and NO FEE.
- Full fee - The client pays the brokers fee.
- Half fee - The client pays half of the brokers fee. The landlord has agreed to pay the other half of the brokers fee.
- No fee - The landlord has agreed to pay the brokers fee.
Why are there so few no-fee apartments?
It’s not easy to bypass brokers because most landlords rely on them to find tenants. They do this because the alternative is expensive. There’s a significant cost for landlords that rent out their apartments directly – time, staff salaries, advertising, office space, etc.
If you’re using a broker, no-fee apartments are only available in buildings where the landlord will pay the broker’s fee so you don’t have to. Unfortunately, given the demand for apartments, a landlord often times doesn’t need to pay the fee for you. He/she knows the apartment will rent out without the added incentive of no-fee. Don't forget, agents love no-fee apartments too - it's a huge incentive for their client to rent the place!
If you’re using a broker, no-fee apartments are only available in buildings where the landlord will pay the broker’s fee so you don’t have to. Unfortunately, given the demand for apartments, a landlord often times doesn’t need to pay the fee for you. He/she knows the apartment will rent out without the added incentive of no-fee. Don't forget, agents love no-fee apartments too - it's a huge incentive for their client to rent the place!
Can I negotiate the brokers fee?
Some brokers will negotiate their fees. You have nothing to lose by asking. Just make sure you negotiate at the beginning of your working relationship, not after you've put in an application on an apartment.
Factor in the brokers fee when setting a budget
Dead set on not paying a fee, but want the help of an agent? Adjust your budget to account for the fee. For example, a $1,200 full fee apartment is the equivalent of a $1,300 no fee apartment.