In both of my real estate trainings I have been told to ignore the news, lest it distract me from my mission and take me out of my “peak state.” I understand the theory behind this, but I think it’s crazy how many agents are disconnected, or, by getting their news only from real estate publications, have a very warped view of what is actually happening.
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Finance Friday: Proposed Cap on Broker Fees
A city council member, Keith Powers, is proposing a bill that would drop broker fees on rentals from 15% to a maximum 8.3%, or one month’s rent. While I completely support the thought process behind it — reducing the prohibitive fees that come with getting an apartment in NYC — I’m concerned that it won’t have the intended effect.
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New York Values #36 - Amazon in LIC
It’s increasingly likely that Amazon is will pull out of its plans to move a campus to Long Island City. The company expected to be greeted with open arms and a populace/government that would be excited. Instead it has been met with anger and frustration, culminating in passionate speeches by lawmakers and protests by LIC residents.
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New York Values #31 - Sexual Health
It’s that time of year we focus on giving back to those less fortunate than us. It’s when we come together in our families and communities and give thanks for all that we have. So, in honor of all these things, I’m writing about NYC’s FREE sexual health and housing resources for those who need them, especially pregnant women and infants.
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New York Values #30 - 311
For a lack of heat or hot water 311 will reach out to the landlord IMMEDIATELY to make sure it gets fixed within 48 hours. For situations like mice, leaks, work without a permit, or a landlord who isn’t making required repairs, you can file a complaint and they will, eventually, send someone out to validate it and slap the owner with a violation.
Read MoreNew York Values #29 - Confederate Flags
Since, let’s not kid ourselves, this flag is used today as a symbol of white supremacy (come at me with that states’ rights bullshit), I decided to look up the specifics of when black New Yorkers were able to vote, when slavery was abolished here, and the history of black property ownership.
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Meta Monday: Please Vote
We are not actually that divided as a nation, but politicians distract us by using “wedge” issues (like the caravan) to literally drive wedges between us. Regardless of whether you agree with me, you should use your right to vote, as people all over the world who wish they had the luxury. And people died to get you that right.
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New York Values #26 - Healthcare
This is about Compass’s announcement that they are now providing health insurance to their 1099 employees (i.e. agents). This is groundbreaking. From what I understand, no brokerage in America has EVER offered this to their employees. We do not earn salaries, live solely on commission, and have to pay for our own benefits.
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Image courtesy of Mashable
New York Values #3 - Snow
Last week’s NY Value was long and rambling, so today’s will be short and sweet (and full of facts). Since we are currently experiencing our third snowstorm in the month of March, it focuses on how good the city is at handling winter.
Stats from https://gearpatrol.com/2015/11/19/how-nyc-prepares-for-blizzards/ and https://www.nytimes.com/2017/03/14/nyregion/blizzard-winter-storm-stella.html
New York City is home to 8.538 million people driving on 6,500 linear miles of roads. The city has 3,000 snow plowing routes, with more than 1,500 plows and over 500 salt spreaders. There are 29 permanent and 14 seasonal sites storing 300,500 tons of salt rock to prepare for each winter.
From Mid-November to early April, city sanitation workers—who are also responsible for the snow removal process—switch to 12 hour round-the-clock shifts, meaning there will always be a team ready if a snowstorm kicks up, day or night. They receive winter preparedness training anually before this schedule change.
Image courtesy of Business Insider
Once 2” of snow collect on a roadway they start plowing via a three tier system of attack. First are the dedicated first responder routes that connect hospitals, NYPD, and FDNY to major public streets, densely populated areas, JFK, and LaGuardia. Tier two is all side streets, followed by tier three's dead-end roads and limited-access streets. At 6” of accumulation, they also break out the haulers and industrial melters to remove plowed snow.
When a BLIZZARD hits, they open up a 130 seat “war room” in BK Heights where reps from energy, infrastructure, sanitation, etc. meet in one room to coordinate the attack. When interviewed about their storm approach, Edward Grayson, COO of the Bureau for Cleaning and Collection, explained that it's better to overcommit than leave the city’s population vulnerable. And in today’s weird, hyper-everyone-for-themselves America, that is a beautiful thing. Thanks, NY, for committing to me so hard.
Image via Vivienne Gucwa
And now for the extremely long-winded part: your real estate value.
For today’s real estate value, I’m addressing some questions I’ve encountered in tenant-side rentals. These are things that I didn’t understand before starting classes, so it makes sense that there would be confusion. To clear it up, I’m answering the questions I’ve gotten below. For these purposes, “broker” means any kind of real estate agent (next week I’ll explain the different kinds):
FIRST AND FOREMOST: If I use a broker, will I pay extra?
NO!!!! If you are viewing an apartment by responding to an ad, attending an open house, or contacting a listing you saw online, YOU WILL BE PAYING THE FEE REGARDLESS OF WHETHER YOU BRING YOUR OWN BROKER TO THE TABLE. Let me say that again: YOU WILL BE PAYING THE FEE WHETHER YOU REACH OUT YOURSELF OR GO THROUGH A BROKER. In fact, you will likely end up paying MORE if you reach out solo, because you are not being represented, and are now dealing with someone who has the landlord’s interests in mind rather than yours. It’s like turning down a court appointed lawyer and representing yourself; you are missing out on an expert’s help in the hopes of saving money when it’s actually free. And, unlike a court appointee, you get to CHOOSE your broker (i.e. me).
What about no fee apartments, though?
No fee apartments are divided into different categories, some with the landlord paying a fee, some with the fee baked into the rent. Even if you're dead set on limiting your search to no fee places, you should still talk to a broker you trust first (emphasis on trust). Depending on the place, there are a few things you need to look out for, which I may discuss further in a later post.
But if I can find all these places on my own on Street Easy, why would I use a broker?
Again, it’s like representing yourself at trial: you don’t save any money and you are likely to make a mistake or miss out on an opportunity. You don’t pay a broker to FIND you apartments; there are millions of apartments and you have access to most of them online. You pay a broker to GET you the apartment. We have relationships with others in the industry; we know how to make your application most attractive and nip any issues in the bud. Also, many NY rental listings are in co-op and condo buildings, meaning your agent will need to put together a massive stack of paperwork and deal with the building’s board. This is complicated, precise, and should be done by a professional you trust, not whomever happens to be representing the apartment’s owner.
But I don’t want to pay a fee. I shouldn’t have to pay to get a new apartment!
Why not? I see the train of thought: you may have found the apt yourself; you walked in there and decided you wanted it; you got all your documents together. But, as discussed above, that’s only the tip of the iceberg, and a broker has to do the rest. There may be a low barrier of entry to be a real estate agent, but it's still a barrier! If you really want to avoid paying, you’ll need to take (and pay for) the 75 hour course plus two exams, find a broker willing to sponsor your license, and pay the licensing fee as well as REBNY dues. You’ll have spent over a hundred hours and may save about $500. I’m not a lawyer, doctor, or CPA, but I still had to go to "school" for this, and I still provide a valuable service.
My friend is the broker; they need to give me a discount!
Again, I see the logic here. Why wouldn’t you get a friends and family discount? It’s not that simple, though. The fee you pay does not go directly to your friend. Depending on the apartment, I may only be getting 25% of what you shell out. So if you insist on a price cut, I either have to get everyone else on board, or essentially work for free. Can I come to your place of business and ask you for free shit? If so, please let me know where you work and I’ll be there! Joking aside, I now work 100% on commission. That’s exciting but terrifying. Think about your friends who are creative freelancers; would you ask them to film a video or build a website for you for free? Well, maybe you would, but that's an issue, and Fiverr has an entire ad campaign surrounding that! Respect your friends’ jobs and skills by paying them for their work.
But it’s so expensive!
Yeah, it is. Moving in this city IS expensive! So are gym memberships. But I can’t guilt Equinox into waiving its fees for me. Moving in NY, at least if you want to be on a lease, is an ordeal. And you should be ready for that. Even without the broker fees, you still need first, last, deposit, application fee, credit check fee, and moving costs, potentially plus an additional move-in fee for condos or co-ops. If all of this is too much, you’re probably better off finding a room in a shared apt. There is nothing wrong with that! It's how I moved here! It just won’t get you on a lease.
I've been asked more questions in this vein, but instead of writing another 1,000 words I’ll instead leave you with Compass’s NY rental guide (linked here) and circle back next week. Until then, thanks for reading, tip your waitress, and stay warm out there.
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