Realtor Fees
 

I've never used the rental market for housing before (unless you count Uni Halls) so I've no experience of what is the norm.

In advance of our recce visit to Chicago next week, I've been in touch with a Realtor who mentioned a retainer fee:

Extract from email correspondence

I have included a link below our exclusive representation agreement which explains our retainer and how our services work. In summary, we hold a $350 retainer that is returned to you upon the successful lease of a property when the commission is paid by the broker of the property. The retainer can be paid upon arrival. If you have any further questions, please do not hesitate to ask.

Is this common and if so, is it a reasonable fee? It could stack up pretty quickly if we were to use several agents. I guess we are paying for his services and time.

Thanks

Re: Realtor Fees
 

Other people's experiences may well be different but -

When we moved to the bay area 10 years ago we initially used a realtor to help us with rental house hunting (I don't know about the fee structure - we were on a company transfer and it was all arranged for us), but found the realtor was worse than useless (he kept trying to persuade us to go for houses a little beyond our budget, in areas that were a bit too upmarket for us).

In the end we just found a place ourselves by looking on craigslist. We found you have to move fast - a nice house could be listed in the morning and taken by the evening. It really had to be go see the house and if you like it sign up on the spot.

As I said though, that was 10 years ago and in a different part of the country, so might not be applicable.

Re: Realtor Fees
 

Thanks for your reply. We're also on a company transfer and all these costs will be met by the relocation package, but even so, I'm still curious to know what to expect. Whilst I would be happy to leave everything to the Relo Agents, my OH is keen to be more proactive.

Re: Realtor Fees
 

I have quite a bit of experience in London renting and now some in New York. In London it was common to put a deposit down to hold an apartment and take it off the market whilst all the paper work was completed. They then also charged numerous agent fees.

This seems that you are paying a fee just for the realtor to show you apartments and you will only get it back upon successfully renting with them. The piece I highlighted in bold could be worrying, who pays the broker fee? In NY it is the tenant (i.e. you) that pays the fee which can be 15% of the annual rent. In some cases properties may have no fee and in some cases it may be paid by the owner. This is my experience in New York.

Re: Realtor Fees
 

Having rented a number of properties in the suburbs of NYC since 2003 I can say we never paid a brokers/agents fee.

Different areas have different rules, most agents in NYC will not show a property unless you have an agent yourself but this is different in the burbs.

We found the best plan of attack when looking for rentals is first to do some online research on area's, once we found a couple of places we liked we called the listing agents directly to arrange the viewings. Some would try and get us to sign an exclusivity document but we never did.

I'd say about 90% of the agents we have dealt with over the past 11 yrs here in the US have been totally useless.

Good luck

as an FYI we were told by OH company lawyers that if we were to sign the exclusivity agreement and found a property with a different agent/broker, the agent you sign the exclusivity agreement with is also entitled to a % of the finders fees which can be substantial. Told in no uncertain terms NOT to sign one!

Re: Realtor Fees
 

Our first rental house was found on Craigslist but I had the luxury of time while staying at a relative's. Our second house was through an agent (friend of a friend) and their commission was X% of the monthly rent. It didn't make any difference to us what X was: the rent was the same regardless.

Re: Realtor Fees
 

Everyone and market will be different.

Down my way, the fee is anything from 1-3 months worth of rent, that the renter pays on signing the lease. In other areas, the landlord pays it.

One thing you want to watch out for when signing a contract with a realtor, is having to pay their fee even if you find your own place and don't use them.

As for holding a place, usually from experience, you apply to get the place, they run a credit check on you and if they select you, you pay the deposit, which can be anything from 1-3 months worth of rent on top of the first/last months rent and any realtor fee on signing. Though it's a busy market around where I am.

Re: Realtor Fees
 

Thanks all, I'm going to push our Relo Agent (Cartus) to see if they can set us up with some viewings next week and not get into retainers etc

Re: Realtor Fees
 

Last year in Austin, the LANDLORD paid a fee to the real estate agent who showed us the house. The relocation company were paid by the company to help us find accommodation. We had to be ready to sign and pay our rental deposit and first month's rent as soon as we found a house we wanted.

Re: Realtor Fees
 

That's the norm down here too...the landlord will pay a fee, normally one month, to the realtor that advertises the property. It's payable on signing the lease/paying the deposit, and will be split between the agents if more than one is involved. There is nothing payable if the realtor doesn't find a suitable tenant. To be honest, I have no idea as to whether renters pay a search fee to the realtor...I assumed the (split) one month was the total compensation, but I may be wrong on that

Re: Realtor Fees
 

Something to remember is that, regardless of what may be the norm in a particular area, everything is negotiable.

Re: Realtor Fees
 

I guess the other side of it is what service is he giving for his fee?

The realtor that was arranged for us did pick us up from our hotel, drive us around the area pointing which were the good neighborhoods, where all the schools and shops were etc, and arranged a series of viewings for us. So that did have some value, even if all the properties he showed us were completely not what we were looking for.

Re: Realtor Fees
 

I've been pleasantly surprised by the range of property details he's sent through. From around 30 houses, we've only discounted a handful, about half we'd consider and the remaining are a maybe once we've checked out the neighbourhoods. All in budget too.

I've no idea how to rent in the UK, never mind in Chicago so maybe the payment can be for hand holding! Still waiting for Cartus to advise if they can show us these properties.

Re: Realtor Fees
 

Cartus is your relocation company?

If so, your relocation agent will work with a real estate agent to find a property suitable for you then your relocation agent will help you with the lease contract (make sure it's legal), do the inventory with you and help you get the utilities done.

If Cartus have told you there will be a fee to [ay the realtor, then that is probably what happens in your area. I'm assuming your company will pay this fee - this is something you should verify and not ignore.

Re: Realtor Fees
 

Yes Cartus is our Relo. My OH has circumvented them on contacting the realtor I mentioned in my OP. I'm going to rein him in and tell him to get Cartus to contact the realtor on our behalf.

Thanks for your advice.