More Manhattan Apartments Becoming "No Fee"
Rent Hop receives very frequent, often daily, updates on the latest apartment availabilities and prices from our landlords. One trend we are clearly seeing is the growth of what many lay-renters would call “No Fee” apartments, even by landlords who would have traditionally charged a fee.
The technical real estate term is called OP, or “Owner Pays”, meaning the landlord will pay the broker fee on behalf of the renter. This encourages full service brokers everywhere to show the apartment to all of their perspective clients, allowing the broker to advertise the apartment as a “No Fee” listing. The renter believes he is getting the best of both worlds… the full services of an apartment broker coupled with no fee!
Why doesn’t a landlord simply lower the rent by 15% rather than offer up 2 months of OP (paying two months of rent as broker fee)? Because the landlords need the brokers. In both good times and bad, landlords understand that despite their best intentions, their internal leasing team and company website simply don’t bring in the breadth and depth of renters needed to fill their vacancies. Landlords need the brokers who cater to renters from the entire spectrum of apartment hunters to find just the perfect match for any listing. Therefore, the simple answer is, landlords know paying the broker 1 or 2 months of OP will be more successful in signing a lease than dropping the price by 8-15%.