Rental Basics in New York>Question Details

Howard, Renter in New York, NY

Proper Etiquette when telling your apartment broker you found a place on your own?

Asked by Howard, New York, NY Wed May 8, 2013

We have a non-exclusive apartment broker who has worked for us finding a spot in NYC the past few weeks, however we just found a place on our own that had a listing agent and property manager attached to it. We didn't want to risk potentially losing the apartment by throwing yet another party (our broker) in the mix to split the broker fee, especially because our broker didn't do anything to find this property.

What's proper etiquette when informing the broker that we found a place on our own and they won't be getting any payment? We feel bad because they did work hard - obviously a thank you note, maybe flowers? maybe a small thank you cash gift?

What should we do?

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BEST ANSWER
Hi Howard, A few weeks in the span of life- is really not a big deal. My opinion- you didn't plan it that way- tell him exactly what happened -you can always refer him to someone you know. IF he/she is professional- he/she will understand.

I have worked with many buyers for monthsssss-some find a house or coop on their own. I give them my blessing and wish them well- and on to the next (sometimes their deal doesn't happen and I get a call back). Some agents have made this a very cut throat business unfortunately, and VERY stressful to boot. I say "You can't get them all and you can't find them all".

Of course it is awesome when a customer/client stays with you to the end-which does happen quite often and certainly makes it all worth while. Terry TKorahais@elliman.com
1 vote Thank Flag Link Wed May 8, 2013
Thanks Terry. You had the most thoughtful answer to our original question. Glad you could separate personal emotion and provide a real answer instead of emotional rhetoric.
Flag Wed May 8, 2013
In NY state all buyers and tenants are entitled to representation. You had buyer/tenant representation, then chose to be an unrepresented buyer/tenant of the owner/landlord's broker.

By state law, the landlord/owner's broker must disclose, and you must sign the disclosure form that they represent the interest of owner/landlord and not you. It clearly states that you are entitled to your own AGENT representation.

Anyone can find can apartment. A buyer/tenant's broker has your back. They have a fiduciary duty to you to get you the best deal just as the owner/landlord's broker has a fiduciary duty to landlord/owner to get landlord/owner the highest rent and the best terms for their benefit. They can not help you because they do not represent you.

Did you negotiate a great deal, low rent for yourself since you didn't want to throw yet another party into the mix to split the broker fee? Is that what you decided when you signed the agency disclosure form ?

I hope it works out for you but bad real estate karma rarely does.
4 votes Thank Flag Link Wed May 8, 2013
Mitchell Hall, Real Estate Pro in New York, NY
MVP'08
Contact
This is not a matter of etiquette, it is a matter of ethics. You behaved unethically. It sounds like you felt the three weeks this agent devoted to you was, in your opinion, volunteer work. In their opinion, they were devoting themselves to you because this is their livelihood and, upon you finding the right place, they would be compensated. Also, your assumption that you saved money by cutting your agent out at the last minute is woefully incorrect. The commission would be split between the the company of the listing agent and the company of your agent. The companies then pay their agents out of that. What you did is deprive the agent, whom you say worked hard for you, of their rightful paycheck. Instead you handed it, in effect, to someone who showed your their listing one time, direct. You gave the listing agent double compensation and deprived your agent of their rightful fee. If you were going to go direct, you should not have wasted the time of your agent. If you were going to use an agent, you should have brought to their attention the property you found out about.
3 votes Thank Flag Link Wed May 8, 2013
It's a commission business based on producing results. If one got paid on effort alone then I should have paid myself as I did just as much research, calling listing agents, attending open houses, etc as our non-exclusive broker did.

How is it their rightful paycheck? They contributed nothing in the procurement of our final rental. Why should the broker be paid in this instance when it could've jeopardized our ability to close the lease? In the end, we had given the broker several weeks with no results. From our standpoint, we found this listing on our own and did the leg work. Our broker, while working for us, again non-exclusively, failed to show us a winning apartment in our price range that fit our needs over the course of 2 weeks. If I worked on something for several weeks with no results and my client accomplished the end goal on their own I would not expect to be paid, I would expect to be fired.
Flag Wed May 8, 2013
Facts vs Urban Myths about Renting an Apartment in Manhattan

http://www.trulia.com/blog/mitchell_hall/2013/05/facts_vs_ur…
2 votes Thank Flag Link Fri May 10, 2013
Thanks for your post Mitchell. Your knowledge is very helpful and insightful, however I still believe that my actions were the deciding factor in procuring the rental property. I have explained myself further on your post.
Flag Fri May 10, 2013
Mitchell Hall, Real Estate Pro in New York, NY
MVP'08
Contact
I'll refer you to Mitchell Hall's comments. They are on the money as always. I suppose my only question is, did anyone show you and have you sign the "Agency Agreement Form?" It's not a contract and doesn't bind you to anyone but it is required by NY State law. Just wondering.
2 votes Thank Flag Link Wed May 8, 2013
Yes, we signed one while closing.
Flag Wed May 8, 2013
As to "what should we do", you should have included your agent rather then wasting his/her time/effort; therefore if the shoes were reversed, what acknowledgement would be acceptable to you....
2 votes Thank Flag Link Wed May 8, 2013
Then a simple thank you is in order; all the best to you!
Flag Fri May 10, 2013
I would thank the renter for the token of appreciation (whatever it might be) and acknowledge to myself that I was not responsible for them finding the place they decided on. It was not my lead that brought them to their final place of residence, nor did I have them sign any exclusive contract to represent them.
Flag Thu May 9, 2013
Proper? How about, I am a schmuck and I am sorry I wasted your time, well.. because I am a schmuck. Keep your flowers, small cash thank you and the poor guy could lose his license on top of it.
2 votes Thank Flag Link Wed May 8, 2013
Howard, resorting to irrelevant attacks on personal appearance looks worse than name-calling. As a fellow renter simply browsing this site, no sympathy for you whatsoever.
Flag Tue Feb 18, 2014
Nope, I am not bitter at all, why would I be bitter? I did not call you a name, I told you what you should be told. Just own up to it. You used someone until you had no use for them, then you felt guilty about it and looking for some sort of redemption from people. By your remarks, it is apparent that although you can put a silk hat on a pig. It is still a pig.
Flag Thu May 9, 2013
John, apparently your wispy mustache, goatee and radiation orange neck tie have made you a bitter man who resorts to name calling. Good luck with that.
Flag Wed May 8, 2013
What you should not have done is what you did. A listing agent cannot cut your agent out of the deal; everyone is entitled to reptesentation.

Can you give her back the three weeks she used to help you? Realtors do this to support themselved and their families.

If you really felt bad, you would her out of your pocket the amount she would have received had you not cut her out of the deal.

Man up!
2 votes Thank Flag Link Wed May 8, 2013
No, but the listing agent could have taken another offer instead of ours when they learned we had a broker (non-exclusive), as that would have limited their fee.

With less than 1% inventory available in the city we are at the disadvantage for hotly contested properties in our price range. If another party with identical credentials came to the listing agent without a broker, and we had our broker involved, then the listing agent would potentially miss out on ~7%. So you're telling me that wouldn't have been a factor in their report back to the landlord on who to pick for the property?

From our standpoint, we found this listing on our own and did the leg work. Our broker, while working for us, again non-exclusively, failed to show us a winning apartment in our range that fit our needs over the course of 2 weeks.

And for the record, I'm all man, lady.
Flag Wed May 8, 2013
What you should not have done is what you did. A listing agent cannot cut your agent out of the deal; everyone is entitled to reptesentation.

Can you give her back the three weeks she used to help you? Realtors do this to support themselved and their families.

If you really felt bad, you would her out of your pocket the amount she would have received had you not cut her out of the deal.

Man up!
2 votes Thank Flag Link Wed May 8, 2013
Some salespeople make the mistake of not having customers sign agency fee agreements: with such agreements in place you would make sure that your hardworking salesperson gets paid! It is difficult to ask for this agreement along with State required agency disclosure form, but I recommend this be signed as well so there is no fuzzy moral nor ethical issues to discuss!
1 vote Thank Flag Link Thu May 9, 2013
You can let the listing agent know you have an agent you are working with and you will have them call him/her to finalize the deal. I understand you were afraid to lose the apartment and that is because you did not completely understand how the business works.
Let your agent know in a nice way that you found a place that has a listing agent and tell them that you spoke to the listing agent and made them aware that you have an agent that will contact them to finalize the deal. It is just good business.
If the deal has already been finalized let your agent know your dillemma and how you feel. I am sure he/she will understand and yes a nice gift of some sort would soften the blow. If your agent is good they will thank you for chosing to use them and encourage you to keep in touch with them. I hope this helps.
1 vote Thank Flag Link Wed May 8, 2013
I look at this two ways. You don't feel bad because if you did because you wouldn't have done what you did. Agents do not like to be wasting their time and money, it's disheartening, you were only thinking of yourselves. On the other hand you didn't have an exclusive working relationship with the broker so you can do whatever you want; no loyalty by either parties.

Because of the example you demonstrated I NEVER work with buyers without an exclusive working relationship in tact and I have many, many satisfied clients. It's a misconception that you get the best deals working directly with the listing agent; it's actually not beneficial to the buyer in many ways.

So what should you do, tell them the truth, your flowers or cash gift is a little bit of an insult; I'd forget about those ideas. Hopefully the agent will be professional about it in front of your although he or she will be burning up inside.

Good luck with everything.

Janet Nation
1 vote Thank Flag Link Wed May 8, 2013
I would send a check for whatever the commission would have been.

Jim Simms
NMLS # 6395
JSimms@cmcloans.com
Financing Kentucky One Home at a Time
Web Reference: http://jamessimms.com/
0 votes Thank Flag Link Thu Jun 13, 2013
By far the worst answer. Ever.
Flag Thu Jun 13, 2013
Any broker that you work with that is not understanding of the situation is not one that you should be working with. You should be able to just be honest.
0 votes Thank Flag Link Thu Jun 13, 2013
I agree with Gail. If that person worked with you for that long period of time they deserve to be compensated. Put yourself in their shoes for a second. Imagine if you go to work for 3 weeks at your job and then your employer tells you that you won't get paid!
0 votes Thank Flag Link Wed May 8, 2013
In my world, if I went to work for 3 weeks and didn't produce results, not only would I expect not to be paid, I would expect to be fired.
Flag Wed May 8, 2013
Go with your gut, be honest with them though.
0 votes Thank Flag Link Wed May 8, 2013
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