The rental market can be very competitive, and often a renter will need to work with a REALTOR® to find a vacancy. In big cities like New York, Los Angeles, and Chicago, many rental properties are only available through a real estate agent. In some cases, the renter is obligated to pay the commission, and in other times when the landlord pays to fill their rental property.
In a smaller real estate market such as Madison, WI, or Dubuque, IA, or cities with plenty of vacancies, a REALTOR® may still work with renters and landlords but will do so for smaller commissions. While most real estate agents don’t expect to make a living by facilitating the listing and renting process for rental properties, they may take the job to build personal connections. When a renter is ready to buy, the realtor is the first one they think of to help them with the process. However, some markets are quite profitable for REALTORS®. For example, in San Francisco, one of the most expensive cities in the U.S. for housing, a REALTOR® can make $20,000 by leasing a single luxury unit depending on the deal.
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Who pays the REALTORS® fee for a rental?
Who pays a REALTOR® fee usually depends on which party hired the REALTOR® and what the contract states regarding the fees. If a landlord or property management company hires the agent, more than likely, they will pay the entire fee. However, in some cases, they stipulate that the fee and split it 50/50 between the renter and the landlord.
How much do REALTORS® charge to help renters find a rental?
Real estate commissions are almost always negotiable. Agents who work on rental contracts typically charge a commission acceptable in their local market. There is no one standard for a REALTOR®’s commission on rental property.
Here are three commonly used practices to determine how much REALTORS® charges renters to find an apartment to rent.
1. Lease percentage
Some REALTORS® charge the landlord a commission based on the total annual rent for the property. If two real estate agents are involved (one representing the landlord and one representing the renter), the commission is split between the two. The real estate agent earns a commission based on the broker’s agreement with the landlord. In this scenario, if the renter pays $2,000 per month, for a total of $24,000 per year, and the agent charges 10 percent, the agent will earn $2,400.00 for finding the renter and writing the lease.
2. One month’s rent
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Other real estate agents charge one month’s rent as a commission for finding a renter. The REALTORS® brokerage collects the renter’s first month’s rent, security deposit, and other fees like a pet fee. Those funds pay the real estate agent’s commission, and the landlord receives the balance.
3. Flat fee
Some real estate agents work with multiple property management companies and landlords to help them fill their vacant rental properties. In that case, the REALTOR® may offer their services for a more economical flat fee in exchange for the volume and consistent listings. The flat fee may range from $50-$75 per unit.
What services are included in REALTOR® fees?
When hiring a REALTOR® to fill a vacant unit, the landlord assigns responsibilities that include:
- Creating ads to market the rental property
- Advising the landlord on rent estimates
- Documenting repairs or renovations needed in the apartment to secure a renter
- Promptly following up with prospective tenants
- Scheduling and attending showings
- Facilitating the application process and collecting deposit checks from prospective renters
- Screening prospective tenants to check credit, and references, verify income and employment, and present this information to the landlord
- Facilitating rent payments and keys
When working with the renter, REALTORS® will:
- Research available units that fall within the renters’ budget wants, and needs
- Schedule showings
- Attend the showings with the renters
- Assist with paperwork like applications and deposit checks
- Negotiate rent amounts or terms
- Complete the lease documents and get signatures from both parties
- Collect initial payments for rent, deposits, and fees
- Give tenants the keys
When a renter may benefit from hiring a REALTOR®
1. Exclusive apartments
In large metropolitan areas, vacancies may be few and far between. However, the most desirable rental properties can be filled within days or hours of listing them. An excellent real estate agent will have connections, access to information, and expertise to help the renter navigate ever-changing conditions and find a unit that fits the renter’s needs.
2. Negotiating rent and finding a rent control unit
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They may be able to locate unlisted properties and help the renter negotiate rent amounts. REALTORS® can also help renters search for apartments with rent control or help educate them on rent control laws in their state.
3. Going over your lease
REALTORS® can help provide context to a lease. If any clauses or sections are confusing, they are an expert resource. They can even give renters the language necessary to help make amendments to a lease before signing.
Renters can benefit from hiring a real estate agent when:
- They have specific requirements such as budget or location.
- They have a tight time frame to find a property and move in.
- Then they are unfamiliar with the area and local landlord/tenant laws.
- The rental market has few vacant properties.
When a renter may not benefit from hiring a REALTOR®
In smaller rental markets, many rental properties do not get listed on the MLS. There may also be many vacant properties available within their price range.
Renters may not need to hire a REALTOR® if:
- They can easily search online listing sites like RentSpree, Rent, Trulia, or Craigslist for rentals and sort through the details to screen for properties likely to suit their needs.
- They can easily apply to many available rental properties through their real estate agent.
- They do not need to negotiate prices or terms as many units are within their budget.
How can REALTORS® benefit from working with renters and landlords?
Leasing agents (real estate agents who work with rental property), who focus on repeat business and high-rent properties can earn decent commissions. Depending on a REALTOR®’s business goals, they might work with sellers and buyers through the most active selling season and support landlords and renters during slower times of the year. According to ZipRecruiter, the average salary for a leasing agent is $38,733 per year.
If you’re a real estate agent who works with rental property, you can ensure you’ll be paid a timely commission and lock in standard commission splits when you list rental properties on the Multiple Listing Service (MLS). By using the (MLS), you can standardize your fees and build trust with all your clients, including landlords and renters, by disclosing fees and who is responsible for payment.
How can renters find a REALTOR® who deals with rentals?
RentSpree.com is a great place to start searching for a real estate agent who serves the area where you live or want to live. Search for and read their agent profile and get in touch to ask if they are interested in helping to find a rental property. You can also check online reviews from real estate listing sites to locate agents in the area. Be sure to ask friends, family, and coworkers if they know of any real estate agents who work with renters.
When you have an agent you think you’d like to work with, ask them a few qualifying questions to determine if you’ll get along during the rental process.
- How much experience do you have finding rental vacancies?
- How long does it take you to fill a rental?
- What services do you offer renters?
- What additional fees apply, and who pays?
RentSpree has an all-in-one platform of tools for REALTORS® to market themselves and their properties and help renters with the rental search process. There are even tools specifically for renters to find a rental property, apply to multiple properties without extra fees, pay rent online and secure rental insurance.
Source: https://t-tees.com
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