If You Don’t Get The House, Do You Pay The Agent?

Real Estate expert Alison Rogers answers a reader’s question.

My husband and I rent an apartment in New York City that we found through a broker last year. Our lease is about to expire, and last December the landlord told us that rent would increase substantially. As a result, we had the same broker show us some apartments, and we ended up putting in an application for one. Our current landlord has since offered to meet in the middle on the rent raise, so now we don’t have to move. If we don’t take the new apartment, do we owe the broker anything? If so, how much?

–An LV Reader

Alison Says:

Ask anyone and you’re likely to get one of two responses: “No, you don’t need to pay the broker because that’s the way the cookie crumbles,” or, “Of course! She helped you until you got the apartment you wanted…isn’t that worth something?”

Full disclosure: I’m pretty pro-real estate agent because I am one! You should consider the difference between the rent the landlord originally offered and the rent you ended up getting as a “savings” generated by your apartment hunt with the broker.

For example, if the landlord was going to raise your rent to $3,500 (not a crazy number for your location) and ended up cutting it to $3,200 because you were poised to move, your agent really helped you save $3,600 per year.

I think around 15% of that would be a nice tip—whether you want to give it as a check to her brokerage for consulting (which means that the brokerage will take part of the check as its expenses, but she’ll get credit for one more deal) or just buy her a $500 Amex gift card is up to you.