The share of no-fee rental listings in New York City is rising, with 75 to 85 percent of all listings in Manhattan and Brooklyn eschewing broker’s fees during the month of August. That’s a substantial increase from about 50 percent in pre-pandemic January, according to data provided by TextLuke.com, a listings service that scans available apartments and makes recommendations based on a user’s requests and responses.
The city’s high broker fees — customarily 15 percent of an apartment’s annual rent, paid by the renter — seemed to be on their way out after New York State passed groundbreaking legislation in June 2019, shifting the responsibility for those fees from the renter to the landlord in many cases. But as the law is being challenged in court, that money is still coming out of renters’ pockets.
So why are no-fee offerings on the rise? It’s the pandemic, of course. The well-documented exodus from the city in recent months has resulted in higher vacancy rates, especially in Manhattan, where the rate reached 4.3 percent in July, the highest in at least 14 years. As a result, landlords are resorting to marketing their units directly, without fees, or cutting their own deals with brokers to cover the fees.
How much could this save you in the real world of Manhattan real estate? For a median-priced one-bedroom Manhattan rental ($3,350 a month in July, according to the Elliman Report), the standard fee would come to $6,030. Add in the other customary charges — first month’s rent and a one-month security deposit — and the outlay required to land that median-priced one-bedroom comes to a whopping $12,730. Without a broker’s fee, it’s a mere $6,700.
In line with high vacancy rates, the laws of supply and demand have caused rents to fall, too. Combine that with more no-fee listings, and 2020 suddenly looks like a golden moment to get a good deal on a rental … if you’re willing to weather the pandemic through a daunting New York City winter.