A Manhattan apartment broker is a middle man. However, despite all the sleazy stereotypes, many grounded in truth, the best middlemen add tremendous value. Sadly, mediocre brokers add little or no value, and a handful of bad brokers reach “negative value add” territory (even if their services were completely free you’d be better off without them).
Why is there so much variance in quality? It’s a bit puzzling to most people, because most New Yorkers think brokers are simply a very high-level API and front-end into a database of listings. It’s true, brokers would be overpaid if they earned thousands of dollars per afternoon as a human MySQL Query Browser + key card.
To help illustrate the value add, we’ll look at another market filled with inefficiency and middlemen: the job hunt.
As stressful as the quest for a dream apartment can be, finding the dream job is even more taxing. New Yorker’s stay at their jobs longer than they do their apartments, making the cost of a bad decision particularly painful (the only more elusive pairing is the perfect spouse). Employers are like renters, scanning hundreds of brief descriptions (resume screening), inquiring dozens for more details (phone interviews), and then granting a small handful a personal audience (on-site interviews). When the right match finally arrives, there is the uncomfortable negotiation phase.
What would the perfect headhunter do to add value? They would:
- Be competent and proficient in the relevant job domains offered
- Politely reject resumes from candidates who simply don’t have the proper background
- Mock interview each job hunter first to ensure the resume isn’t full of lies / exaggerations; prep him for brainteasers, programming questions, case studies, and those awful “estimate # of ATMs / OTBs / copy machines / doormen / apartment brokers in NYC” questions
- Perform due diligence on employers to make sure the job matches the description
- Have solid relationships with many companies, being the first to know of new openings.
- Be detailed and thorough enough to highlight each candidate’s uniquely redeeming qualities.
- Be the exclusive representative for a broad network of exceptional current and future job hunters
- Mediate a pareto efficient compensation package for each employee / employer pair
Back to Reality
Sadly, a headhunter this great doesn’t exist (if she does, give her my resume). However, any apartment broker worth his salt does all of these things. They build relationships with landlords, doormen, and supers. They visit apartments and reject bad ones without even bothering to photograph or advertise them. They carefully write descriptions that highlight unique features. They have enough broad knowledge to know a fair clearing price in rent negotiations. They qualify renters. They save everyone time, and they do this knowing that most clients waste their time.
Why the Bad Reputation?
Despite everything a great broker does, apartment brokers and headhunters universally have awful reputations. The bad apples are too lazy to do their jobs properly, so they cut corners. They don’t preview the apartments, they post fake photos instead that they found online, stole from another broker, or have absolutely nothing to do with the real unit. The descriptions are ultra generic, or worse still, the apartment doesn’t exist and it is a pure bait-and-switch (and it’ll be obvious because when you visit the apartment with that broker, it’ll be his first time seeing it as well). Ironically, because these are the same brokers who magically have the lowest priced apartment on Craigslist, you are more likely to come across one of these rotten apples if you yourself are too lazy to look for a good broker!
At RentHop, our in-house source of NYC Apartments, our philosophy is to force the broker’s to prove they are good by judging the quality of their postings. We have recently completely overhauled our backend algorithms to specifically flush out low quality brokers and listings. For the purists, I’m well aware that the “Broker Turing Test” is very hard to solve, but we’ve found some amazingly great heuristics over the years… Stay tuned in the coming weeks!