Is there a standard commission broker's receive from apartment management?

Asked by Paula, Austin, TX Fri Aug 1, 2008

If a broker found an apartment for a tenant, the tenant signed a 12-month lease with the monthly rental fee being $1030.00, how much commission is the broker owed from the apartment owners/management? Is there a standard rate or does it vary?

The broker went with the agent to look, the agent completed the application, and paid the admin and app fee. The agent was told he or she did not have to be present when the tenant was signing the lease to receive credit for the deal. Could the apartment offer the broker only 25% legally?

The apartment is in Austin, TX

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Carol Pease,…, Agent, Austin, TX
Sun Aug 3, 2008
The apartment complex can offer whatever they want and whatever the market will bear. If the offer is too low they run the risk that agents will not show their inventory and their units will sit empty. Most complexes pay 40-50% of the first month's rent. That's not much for the time spent running the clients around with the cost of gas.
2 votes
Betina Forem…, Agent, Austin, TX
Sat Aug 2, 2008
Dear Paula,
What I have seen the most is 30-40% of the first months rent. A few years ago you might find a 50-100% fee for the lease, but that is uncommon in today's market. Some complexes simply offer a flat fee of $200-$500.

This is really not much for the agent when you consider the price of gas these days. Beware some agents will charge the client a $50-$100 fee on top of the typical application fee the landlord charges to process your application. Please note if there is more than one adult living in the property the Landlord will expect a seperate application and seperate app fee from each adult. You can expect to pay between $25-100 for an individual application fee.

I am not a rookie agent however, I do the occasional lease just to help clients out. I do a lot of relocation work, and sometimes clients need a little more time to decide exactly where they want to buy, and that can be a challenge when you are unfamiliar with Austin's neighborhoods. I know of properties that do short term leases for those clients.

Today you may lease but tomorrow you may buy something! I am in this career for the long haul and I will be there to answer your questions, today tomorrow and next year. I am familiar with all of the paperwork involved and can help you get through it in the blink of an eye.
Looking forward to your call.
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1 vote
Ronda Allen, Agent, Plano, TX
Fri Aug 1, 2008
Can they? Yes. Should they? No. The reason it can be hard to get agents to help people find rentals is the high number of listings that offer incredibly low paydays to the agents for all their work. We're the ones out in the field, running people around to look at homes for rent, counseling clients on filling out applications, reviewing lease documents for fairness, and making sure that carpets get cleaned, touch-ups are done to walls, move-in day inventory and condition is documented, and making sure that the client has access to community amenities like community pool keys, workout facility access, etc... Heaven forbid the client not get the first home they try for and the process has to start over on rental home #2, #3, or #4. Talk about grossly underpaid for the amount of work required. That is why so many of the agents who will agree to work a lease are rookie agents straight out of real estate school. Once they build their business, many wouldn't touch a lease with a 10-foot pole. But, there are no fixed commissions in the state of Texas for real estate transactions, and the abundance of discounters has led to this practice.
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1 vote
Apartmentnin…, , Austin, TX
Tue Jul 10, 2012
Yes. Commission rates change daily. The majority of apartments in/around central Austin pay low commissions as is opposed to other major Texas metro markets. As of today, apartments in the Barton Hills area of Austin are offering locators either 50% commission or a flat fee of $500 for referring renters, which isn't bad.
0 votes
Phillip Baird, Agent, Austin, TX
Mon Nov 21, 2011
The broker will receive a percentage of one months rent. That percentage is spelled out clearly in the MLS listing. In my experience, in this market, it's usually 30-40%. Some are as low as 25%.

Your agent and/or broker knows ahead of time how much they will get paid on any given apartment lease. They should share this information freely with you and not complain about it to you. They chose to work in the leasing market. It's not your fault that they have to work very hard for not that much commission.

However, some of us don't mind helping people like yourself for low commission. We hope by giving you good service that you will tell all your friends about us, and then some day when you are ready to buy you'll remember us. Call or email me if you want to talk further.
Good luck!

0 votes
westpointmgmt, , Huntington Beach, CA
Fri Nov 18, 2011
All rates vary depending on what the owner and broker agree upon.

0 votes
Apartmentsea…, , Austin, TX
Wed Nov 9, 2011
Paula - I own Unfortunate for us, we're an Austin based start-up and naturally generate more Austin leads than any other Texas city. This is quickly changing though. Anyways, locating in Austin is a waste of time. Inner city apartments such as West Campus, Barton/Zilker, Central, Riverside Student Housing places barely pay locators, if at all.

That being said, apartment communities pay broker's whatever the set commission rate is at the time the client submits an application. I split commission 50/50 with agents because we provide them with company generated leads, which cost money.

Moving along, apartment communities have the upper hand and do whatever they please and pay locators whenever it's convenient for them (not all property management companies are like this, but most suck even the ones that act like they're locator friendly). I've had leasing agent's steal my referrals, waited well over the 90 day time limit to receive commission checks, been lied to, and so on. Locators need more protection against shady communities, such as those of the Bethany Group. In a nutshell, what I'm saying is that it seems like a lot properties try NOT to work with/pay locators whenever possible and it pisses me off.

In conclusion, I would never in a million years escort a client to a property that was paying anything under 100%. 25% of $1030.00 split between agent/broken doesn't add up in my book, but I'm a ninja. I hold a grudge against all apartments that offer crappy commission rates and definitely those who offer flat rate fees AND even worse those who offer 0% commission if you don't escort.
0 votes
Courtney Han…, Home Owner, Seattle, WA
Tue Jun 7, 2011
usually the broker will take a commission equivalent to the first months rent, but it really depends on where you live and of course what you agreed to in your contract. Hope that helps!

Courtney H.
0 votes
Betina Forem…, Agent, Austin, TX
Thu Nov 20, 2008
Dear Paula,
I suggest you contact the Realtor that showed you the property. He/she should be able to tell you what the percentage was listed as on the MLS. That is a standard part of the Lease "Listing information. i hope it worked out for both of you!
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0 votes
Grant P. RE…, , Austin, TX
Wed Oct 15, 2008
There are no standard commissions. This would be considered price fixing. Generally when the market slows down in October to January, lease commissions go up since it is harder to find tenants. During the summer, lease commissions are less because tenants are easier to find.

As for your situation, this is a matter of finding out ahead of time the lease commission. This is why it is important to get the name of the person that you speak with and to call ahead of time. If they commit to a certain amount ahead of time, then they are bound to that price. But they can come up with any excuse under the sun.

Thank You,
Grant Pollet
The Austin Rental House Specialist
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0 votes
Betina Forem…, Agent, Austin, TX
Thu Aug 7, 2008
One thing to remember is if you visit the complex without your agent ,they may decline to pay the agent. Make sure you fill in any blanks on the complex application asking for source of lead with your agents full name. Some of the larger complexes take forever to pay. I did a lease with Camden in January and I did not get paid until mid July (after I had had given them the invoice about 8 times since January. The first invoice was presented on the day we signed the lease Jan 2nd,2008!)
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0 votes
Amie, , Austin, TX
Tue Aug 5, 2008
Most of the apartment complexes I have done business with have paid 50-100% of first month's rent. Other types of properties like duplexes and SFRs pay 30-50% on average.
0 votes
Margaret T.…, Agent, Conroe, TX
Mon Aug 4, 2008
Very seldom are any Apt. complex owners or managers members of any MLS, and I do not know if your agent was or not.
Members of any Texas MLS have the TAR forms available to them and are advised to have these forms signed before completing any transaction with non members. These forms are Registration agreement between Broker and Owner and Registration Agreement between Brokers. This is the only way to assure any payment incoming or outgoing with a non MLS member.
I am sorry this happened to your agent, you may want to do a little something to ease the pain.
0 votes
Dallas Texas, Agent, Dallas, TN
Fri Aug 1, 2008
All apartment complexes agent commissions vary amounts for realtors fees, 12 month lease can vary from 25% to 200% of the 1st months lease.
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0 votes
Jeff Kessler, Agent, Austin, TX
Fri Aug 1, 2008
It really depend on what the Apt is paying. You should get that ahead of time. If not then I would call the complex and see what they are paying and then send them an invoice. I have seen some Apts not have a commission and some pay as high as 150% of the first month rent.
I was a rental agent for over 5 years.
0 votes
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