How much do realtors charge to find a rental in 2023? Revealed!

The most common amount charged by realtors is one month’s rent, but this rate is not set in stone. People often ask “How much do realtors charge to find a rental”. The actual amount that a realtor charges can vary depending on the city, the market, and the individual realtor. For example, in large cities with competitive rental markets, realtors may charge higher fees. Additionally, if the rental market is hot and there are a lot of demand for rental properties, realtors may also charge higher fees.

Here is a table of some of the average realtor fees charged in different cities in the USA:

CityAverage Realtor Fee
New York City, NY15-20% of the first year’s rent
San Francisco, CA15-20% of the first year’s rent
Los Angeles, CA10-15% of the first year’s rent
Chicago, IL10-12% of the first year’s rent
Boston, MA10-12% of the first year’s rent
Washington, DC10-12% of the first year’s rent
Seattle, WA8-10% of the first year’s rent
Denver, CO8-10% of the first year’s rent
Phoenix, AZ8-10% of the first year’s rent
Austin, TX5-8% of the first year’s rent
Atlanta, GA5-8% of the first year’s rent
Dallas, TX5-8% of the first year’s rent

Factors that affect how much realtors charge to find a rental

Location:

  • The location of the rental property can impact the realtor’s fees.
  • In expensive housing markets like San Francisco, realtors can earn substantial fees, such as $20,000 for leasing a luxury unit.

Type of property:

  • The type of property also influences the realtor’s charges.
  • Luxury units may command higher fees compared to standard apartments.

Strength of the rental market:

  • The rental market’s strength determines who pays the realtor fees:
    • In a landlord’s market (high demand, limited supply), renters often pay the fee.
    • In a renter’s market (excess supply), landlords may pay to find tenants, or fees could be split between both parties.

Fee structure:

  • Realtors may charge fees based on various structures:
    • Commission based on the total annual rent.
    • One month’s rent as a commission.
    • A flat fee for their services, regardless of the rental property type or price.

Negotiation:

  • Real estate commissions are negotiable, and agents often adjust their fees based on local market standards and individual agreements.

Services included:

  • Realtor fees typically cover services like marketing the unit, finding tenants, and drafting the lease.
  • The specific services offered may vary based on individual agreements and tenant needs.

Additional costs:

  • Apart from the main fee structure, tenants should be aware of potential additional costs, including application fees, credit check fees, and move-in fees.

Payer of the fee:

  • The party responsible for paying the realtor fee depends on the hiring party and contract terms.
  • If a landlord or property management company hires the agent, they usually cover the fee, but some contracts may split the fee 50/50 between the renter and landlord.

Common practices for determining realtor fees for rental properties

Lease percentage:

  • Some realtors charge a commission based on the total annual rent for the property. For example, a realtor may charge 5% of the yearly rental income as their commission.

One month’s rent:

  • Other real estate agents often charge one month’s rent as a commission for finding a renter. While this is a common amount, it’s not set in stone and can vary.

Flat fee:

  • Some realtors charge a flat fee for their services, regardless of the rental price or property type. The fee can vary depending on the location and the realtor’s experience.

Negotiability:

  • Real estate commissions are usually negotiable, and agents adapt their fees to local market standards. The exact fee can vary significantly by city and state.

Variability by location:

  • Realtor fees can greatly differ by location. For instance, in San Francisco, a REALTOR® can earn up to $20,000 for leasing a single luxury unit, while in Washington, DC, fees range from 25% to 50% of one month’s rent. Fees in large cities like New York and Los Angeles are often higher and can exceed a month’s rent.

Payer of fees:

  • Who pays the realtor fees for rentals depends on the hiring party and contract terms. If a landlord or property management company hires the agent, they typically cover the entire fee. However, in some cases, the fee may be split 50/50 between the renter and the landlord.

Services included:

  • The services covered by realtor fees may vary based on individual agreements and tenant needs. Common services typically include marketing the unit, finding tenants, and writing the lease.

Who pays the realtor fees for rentals?

Landlord pays the fee:

  • In most rental situations, realtors are hired and compensated by the landlord.
  • The landlord typically covers the realtor’s fee, which can be one month’s rent or a percentage of the lease value.

Renter pays the fee:

  • In some cases, renters may engage a realtor to find a suitable rental property.
  • In highly competitive markets, where landlords may not pay agent commissions, the renter is expected to pay the commission for both their agent and the landlord’s listing agent.

Split fee:

  • Occasionally, the fee is divided between the landlord and the renter.
  • For example, the landlord may pay half of the fee, while the renter covers the other half.

Negotiability:

  • The party responsible for paying the fee can often be negotiated.
  • Renters can inquire about whether the landlord or property owner is willing to cover all or part of the broker’s fee.

Understanding who pays the realtor fees for rentals is crucial for both tenants and landlords. Additionally, when using a realtor to find a rental property, it’s essential to be aware of potential additional costs that may arise, such as application fees, credit check fees, and move-in fees, in addition to the main fee structure, which is typically based on commission.

Are there any additional costs associated with hiring a realtor to find a rental?

Application fees:

  • Many landlords or property management companies require tenants to pay an application fee when submitting their rental application.
  • This fee can range from around $125 to $450 or more, depending on the location and rental market.

Background check fees:

  • In some cases, landlords may require a background check on potential tenants, which can come with an additional fee.

Pet fees:

  • If a tenant has a pet, some landlords may require an additional pet fee or deposit.

Property management fees:

  • If the realtor is also managing the property, they may charge an additional fee for their services.
  • This fee can range from 10% of the monthly lease to a flat fee.

It’s important to note that the exact fees and costs associated with hiring a realtor to find a rental property can vary depending on the location, the realtor, and the agreement between the parties involved.

Services included in realtor fees for rentals

Marketing the unit:

  • Realtors often promote the rental property to potential tenants using various channels, including online listings, social media, and print advertising.

Finding tenants:

  • Realtors work to identify potential tenants for the rental property.
  • This may involve activities such as conducting property showings, applicant screening, and negotiating lease terms.

Writing the lease:

  • Once a tenant is found, the realtor typically drafts the lease agreement.
  • This includes specifying the lease terms, such as the rental price, security deposit, and move-in date.

Additional services:

  • Beyond these common services, realtors may offer additional services depending on the specific agreement between the tenant and the realtor.
  • For example, some realtors may provide ongoing property management services for an extra fee.

When utilizing a realtor to find a rental property, it’s essential to be aware of potential additional costs that might arise during the process. While the primary fee structure is typically commission-based, tenants should also consider other expenses, such as application fees, credit check fees, and move-in fees.

What are the benefits of hiring a realtor to find a rental?

Time-saving:

  • Realtors streamline the search process by narrowing down properties that meet the renter’s specific needs, saving time, especially in a competitive market.

Access to more listings:

  • Realtors have access to the Multiple Listing Service (MLS), providing a comprehensive list of rentals.
  • These listings offer more information and pertinent documents often inaccessible to the general public.

Expertise in the local market:

  • Realtors possess deep knowledge of the local rental market, offering insights into neighborhoods, rental prices, and amenities.

Negotiation skills:

  • Realtors assist renters in negotiating better lease terms, including rent prices, lease length, and move-in dates.

Assistance with paperwork:

  • The rental process involves substantial paperwork, and realtors help renters navigate it, ensuring all necessary documents are completed correctly.

Protection of interests:

  • Realtors help renters avoid rental scams and ensure they don’t sign agreements that may put them in a financially disadvantageous position or violate their tenant rights.

Professional real estate tools:

  • Realtors have access to professional real estate tools, including online databases, property management software, and marketing tools, which aid renters in finding the right property.

Hiring a realtor can make the rental process more efficient and secure, benefiting renters in various ways.

Conclusion

In conclusion, the cost of hiring a realtor to find a rental property can vary significantly based on location, property type, market conditions, and individual agreements. Common practices include charging one month’s rent, a percentage of the lease value, or a flat fee. The exact fee is often negotiable, and additional costs may include application fees and other expenses. Realtors offer valuable services, such as marketing, tenant screening, and lease preparation, which can save time and provide expertise in navigating the rental market. Understanding who pays the fee is essential for both landlords and tenants, ensuring a smooth and informed rental process.

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