Pending NYC Broker Fee Changes and its Implications

No fee! Half-fee! Fee paid! Co-brokers welcome! 

These are some of the buzzwords and terms that NYC metro real estate agents advertise in order to attract new clients looking for an apartment to rent.

If NY Gov. Cuomo and NYC Mayor DeBlasio change how broker fees are collected in future transactions, it will fundamentally impact many agents’ ability to make a living, especially Rookie and 2nd year agents trying to establish their client base. This article on Curbed lays out the proposal and the pushback.

The law changes are intended to benefit the consumer from expensive fees but laws of unintended consequences remain as it will also force an increase in advertising costs for multifamily owners which will lead to raising the rent!

You see, the current ecosystem has a ”free” marketing army of 100,000 NYC agents that make a living off charging clients fees to find them an apartment and if they cannot charge a client a “finder’s fee” this reward-driven advertising support will cease to exist. Apartment searching will move strictly online and the consumer will become less informed about neighborhoods, schools, and if an apartment is a “good deal” or not.

For landlords of multifamily properties, that means their leasing teams will become overworked; inundated with showing requests by potentially unqualified prospects with no guidance about pricing or competitive options mere blocks away.  

Consequently, tenants will go through a more uninformed and painful process. The third party agent of the past who helped smooth things along through guidance and hand-holding will be a faded memory. This will be a major disruptor to everyone.

In the end, it will mean landlords’ advertising budgets will need to balloon to make up for the lack of reward-based agent supported marketing of their properties.

Audience Town can help landlords get ahead of the coming storm. Our “mover” audience persona targeted digital advertising can place ads for the right apartment communities in front of potential tenants while they consume media on mobile, video, and CTV. Landing pages can inform dynamically updated inventory pricing and availability.

CONTACT US to learn more about Audience Town and how we can help you reach your desired real estate audience!