Normally, I try to keep my blog light and positive, and stick to giving helpful real estate advice. That said, I feel the need to comment on a recent blog post I read on Brick Underground last week. The article, An ex-rental agent spills the truth behind broker’s fees, is a must-read – for all the wrong reasons – written by an anonymous author after a three month career in NYC real estate. Although, I have a lot of respect for Brick Underground and the articles and information they provide their readers, this post is worthy of an in-depth critique.
When I saw the title of the article I thought, FINALLY someone is going to give prospective renters helpful guidance to navigate the rental market – whether they choose to work with a broker or not. Instead, what was written is the same old “woe is me”, “gimme, gimme, gimme”, self-serving nonsense which gives our industry a bad name. As someone who has been in this industry for nearly a decade, and who trains and coaches rental agents as a career, it disturbs me that only one paragraph of this entire article suggests what a client can and should expect from a good agent. The rest is the rant of a jaded and frustrated salesperson about how disloyal and “flaky” clients can be, how a client’s budget determined the agent’s priorities, and how much of the agent’s work was “unpaid” during their three months as a real estate professional in NYC (on summer break).
The author writes…
“Why are broker’s fees so high? The majority of the payment covers flaky customers. Only one out of every 10 people who responds to an ad and meets an agent will actually rent an apartment from that person—or at least, that’s what they told us during training—which means that about 90 percent of the work an agent does is entirely unpaid.
Case in point, I met with one client three times this summer and showed him about 15 apartments, but he was dissatisfied with all of them. I finally found a place I thought was perfect. After two excited emails and three unreturned phone messages, I finally got him on the phone and shared the news, only to be informed that he’d signed a lease earlier that week. Oh. How nice of you to let me know.”
As a potential renter or client, do you have any sympathy for this agent? I work in this dysfunctional industry and I can tell you, I do not. Brokerage fees are not high because of “flaky” customers. They are high – that is certainly true. But let’s not pretend that a 15% fee has anything to do with how our customers behave. In fact, often “flaky” customers are the result of the high fees we charge and/or an agent not doing their job well. Renters pay a substantial fee to their agent and should – at the very least – expect a high level of service in return.
You don’t automatically receive client loyalty; you earn it. You work to establish rapport and trust, conduct yourself professionally and honestly, and (most importantly) put your clients’ needs before yours! And, whether the clients’ budget is $1800 or $18,000, they get the same treatment. Why? Because a good salesperson plays the “long game” rather than focusing on the immediate deal. A good salesperson understands that $1800 studio clients become multimillion dollar buyers. A good salesperson knows it is their obligation to treat each client with respect.
Regarding negotiating fees, the author writes…
“There is perhaps nothing more agonizing and frustrating than a client who aggressively negotiates the fee. Real estate agents provide a professional service. I find it mind-boggling that clients find it acceptable to haggle, when they would never think of negotiating legal, medical, or other similar fees.
That said, if you are dead set on paying less than the full fee, I recommend the following technique:
Go out with your agent a few times over a couple of weeks, but change up what you’re looking for just enough each time, ensuring the agent works like a dog to find you a place. Eventually, get approved for a rental. (Your agent will breathe a sigh of relief.) Then, the morning of the lease signing, call and say you refuse to pay more than a month’s rent as the fee. He will hate you forever, and you definitely won’t get him down to a month’s rent, but you will likely be able to negotiate a lower fee. Note, however, that the agent will probably never work with you again, and he will most definitely talk about how awful you are with the other agents at his office.”
What a fantastic insult to the very readers you are trying to enlighten. What is your point? “I am going to treat you terribly, but shame on you for treating me terribly?” Here is some true and honest advice to both renters and brokers: Brokers, treat your clients with respect and dignity, and do your job well. Clients, if your broker treats you with respect and dignity, and does their job well, pay them what you agreed to pay them. Simple.
Lastly, this industry expert states…
“I spent a summer working as a rental agent at one of New York’s biggest brokerages…”.
A summer? And you wonder why you didn’t know what you were doing or how to do it? This isn’t summer camp and it certainly isn’t a business you can learn in three months. I understand it must have been a difficult summer – it is a difficult job! And, if you were even half as jaded and frustrated in front of your clients (believe me, clients see right through the self-serving broker who doesn’t have their interests in mind), it is no wonder that you had to start cherry-picking who you would spend your time with.
Here is an analogy I often use when training agents: As a former unsuccessful actor, I naturally had a lot of jobs as a waiter. It made me laugh (and cringe) when other waiters claimed they could determine how much each client was going to tip them the moment they walked in the door. NONSENSE! This is the way it really worked for those waiters. The waiter determines a client is a “10% tipper”. Because they “know” they are going to receive a 10% tip, they give 10% tip service. Then, when they receive a 10% tip (which they earned!), they run around telling everyone how right they were. It is a self-fulfilling prophecy and a race to the bottom. Not to mention, it is a despicable way to treat people and a detriment to the owner who hired you.
There are many real estate professionals in this city who work incredibly hard to build their business in an honest and ethical way (believe me, they are out there – you just have to do the necessary work to find them). Agents who know what it means to earn their clients’ trust, as well as the fee they collect for doing their job well. I wrote this response for all of those agents.
Below is the link to the full article on Brick Underground. I suggest you read it and take it in. Then, when you are thinking about using a broker next time you search, send them this article and ask them to tell you what they think of it. If they chuckle and say, “Well, there is a lot of truth to this.”, run, don’t walk, away from that agent. It will not end well for you. On the other hand, if the broker says, “This is nonsense, and sounds like an angry person who didn’t understand their job”, you may have found the right broker.
Brick Underground. (2015, February 17). An Ex Rental Agent Spills The Truth About Broker’s Fees [Blog post]. Retrieved from http://www.brickunderground.com/blog/2015/02/truth_behind_brokers_fees