I have watched people forego beautiful, perfect apartments because of the word “fee.” It’s like the word “tax” — neither is inherently bad, but we view them as bad. Also, as you may not realize, rent is basically just a fee, since you do not build equity and it’s not going towards anything you own. You are paying for a service, just like if you’re paying an agent to help you secure an apartment (because it’s not just clicking a button and voila, all done).Read More
Today on the docket: what does this commission pay for when I sell my place and hand over a hefty check? On the buy side you usually don’t end up paying anything, but as a seller you are paying both your agent and the buyer’s agent. But where does this money actually GO?Read More
No, they aren’t adding a tax on your metrocard purchase. They are increasing the taxes involved in high-value real estate transactions and, allegedly, using the proceeds to fix my favorite broken train system. I’m always skeptical that money will go where it’s supposed to but if this does happen, it will make me feel a bit better about why the tax exists.Read More
Currently only one of these things exists in NYC: the so called mansion tax added to any real estate purchase over $1 million. Since the median price for a one-bedroom on Manhattan is a cool mil, this is less “mansion” and more “home” tax. Despite this, it seems unlikely that the number will decrease.Read More
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.Read More
My first New York Value lauded the civic engagement of schoolchildren, specifically their work getting an honorary street named for Elizabeth Jennings. And now, starting with the Parkland survivors, we are seeing massive nationwide civic engagement in kids/teens regarding gun control.
I had to write about guns this week, because on Saturday NYC was home to one iteration of the March for our Lives, with hundreds of thousands in attendance. I was too busy recovering from a stomach flu to go cry-march with everyone, but I was still inspired by the vast showing of support. Anyone who knows me knows where I stand on guns, but this isn’t about me. It’s about this city’s long history of successful gun control reform having a lasting, positive effect on its populous.
In 1911, a murder near Gramercy Park moved the state congress to pass New York State’s Sullivan Law, which required residents to obtain a police-issued license for any “concealable firearm.” The law made carrying a concealed weapon without such permit a felony. It was the FIRST of its kind and has been the blueprint for similar laws throughout the country.
This article has a very interesting breakdown of the whole inception of the bill and how it was really spearheaded by a gangster as well as a lawmaker! https://cityroom.blogs.nytimes.com/2011/01/23/100-years-ago-the-shot-that-spurred-new-yorks-gun-control-law/
The real power of this law, though, is the strictness with which it is enforced. Even if you pass a background check and meet the permitting criteria, law enforcement can still deny you a weapon. I’m not going to get deep into the second amendment debate, but it does not grant citizens carte blanche to own weapons; that’s a complete misreading of the law. You’re entitled to apply for the permit, but not entitled to be accepted. Why do you want a gun here, anyway? To hunt rats and pigeons? Just go to a range and shoot their guns; it’s still fun!
There was a drive-by shooting two doors down from me when I first moved to my apartment, and it was terrifying. I am incredibly grateful that it is not more common largely because of the barriers to gun ownership that exist here. Thanks, New York, for being ahead of the curve and keeping me safe.
(Note: After the Sandy Hook shooting, NY passed the SAFE Act, banning outright all assault weapon sales in the entire STATE.)
The real estate value today is perhaps self-justifying, but it’s to clarify something that has come up a couple times recently.
You really cannot work with two unrelated RE agents, because one of them is going to end up getting forced out. It happens a lot: your mom knows someone and your friend knows someone or you know someone and your roommate knows someone so you reach out to both. And they both send you listings and put in time, show you around, etc. And you kind of just go along with it until you end up deciding on a place, telling the other agent that you’re all good now and they can stop the search on their end.
It’s like shitty dating. You’re seeing someone and it seems to be going well, you’re getting more invested, and then all of a sudden they tell you they’re getting back together with their ex, or they met someone else they really like. And you’re left FOREVER ALONE.
This is also why many agents aren’t particularly excited about tenant-side rentals. At least in a sales transaction one broker is guaranteed to be part of the final deal, and it’s explicitly stated that you should only work with one agent at a time. But in the free-wheeling rental world there are all kinds of communal living or leasing agency options, so not only are some clients working with an array of agents, they’re also exploring other options on their own. It doesn’t feel great to spend a bunch of energy on something only to be told you’re no longer needed! At least if a boss fires you he has to pay you two weeks severance on top of what you’ve gotten for “time served.” In this industry, that’s not a thing.
This isn’t a lecture or me complaining about my position. Instead, it’s a call to both sides to make sure expectations are laid out early on. As non-agents, if you are up front with anyone you consider working with about all the potential inevitabilities, that person can weigh their options and know what they’re getting into. They should do it on their end as well, but by being smart, savvy consumers, you can take the first step and also impress any potential agent with your awareness. Plus you’ll get the best from anyone you work with because you’ll be an absolute DREAM client!
As always, direct questions to email@example.com, and I’ll be back next week!
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.
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.
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.