Airbnb could disrupt the broker business model

In Savannah, finding an apartment was as easy as driving by a house and checking it out. Craigslist was the de facto method, though. Never any misrepresentation, or other real estate trickery going on. As a student of the local private art & design school, my enrollment there was as good of credit as I ever needed. Often a jobless student could walk into an apartment with the landlord and sign the paper right there, without any background checks or financial statements. I thought this was reality.

In NYC the fact that brokers required bank statements, tax returns, credit check, background check, pay stubs, plus all of that and more from a co-signer (if needed) was downright disrespectful and degrading. Not to mention paying a broker 2 months worth of rent meant they never tried to get you a deal. Don't even think of using Craigslist in NYC.

Now I live in an apartment in Seattle. It's on the west side of Queen Anne hill, with a view of Elliot Bay. We found it on Craigslist. The price was so good we knew it was a scam and almost wrote it off entirely, based on our experience in NYC. Turned out it was exactly as pictured, and even better. We've lived in it for just over 3 years now and have no desire to move.

If brokers are the standard way of purchasing in major cities, then that is a real shame. I find them to be pure slime, absolutely the worst people to be dealing with. Anything that disrupts their industry is a good thing.

SF/NYC/other coastal cities may be a different world, but rental brokers in my neck of the woods are just not used in my experience.

The company name in the fine print of the lease is probably something generic like UDR or AMC or Essex or "Home Properties, Inc" or "Equity Residential". These REITs are brokers: they manage multiple apartment complexes in multiple cities in multiple states: http://www.rednews.com/2014/01/top-10-u-s-apartment-reits-as...

These REITs are constantly merging, acquiring and/or swallowing each other whole, consolidating into bigger and bigger conglomerate brokerages. The bigger they get, the more they can throw their weight around and control rents. Especially in "trendy" markets.

They tend to spam craigslist. They tend to require lots of fine print and have fees for everything, with contracts that are far too big and lengthy w/credit and background checks, excessive deposits, always always pet fees, and always at least a year when you sign the dotted line.

It's pretty scary what's happening in this niche: it's like they've figured out the trick is to steal any savings you might be able to build (rent hikes ~8 percent or more per year), thus trapping people in rental hell.

In NYC it is hard to find a place without a broker in many neighborhoods. I found an apartment on Craigslist a few years ago and was surprised I was able to get it. Often, Craigslist is full of broker spam disguised as a landlord listing an apartment or the apartment is simply taken up by someone right away.

The other option is to find a building managed by a larger company. They almost always have "0 fee rentals". However, they often cost more too since they tend to have many facilities.

Honestly, many landlords like the broker system because brokers weed out bad renters by referencing their credit and arranging all the paper work and the landlord doesn't really have to do anything. The tenant pays all the fees and as this article pointed out, the landlord may in fact receive kickbacks. At least in the NYC area, I don't expect brokers to go away any time soon. NYC is a beast upon itself in the housing world for renting and buying.

I would love to see brokers go away, however. I have a suspicion they largely drive up rent prices as they can create an artificially small market and because they rely on inefficient methods, tenants are really only able to visit a small subset of places and brokers can get them to bid against each other. This creates an artificially small market that is largely in the landlords favor. They also will usually not show you places unless you are ready to move in by the end of the month which creates time pressure and panic in renters which, as you guessed, artificially drives up rent.

In most I have lived in, brokers dominate (NYC, Boston, Washington, DC). Even going onto something like Craigslist, most posts there are just brokers posting. Maybe it's less prevalent than I have experienced in other cities?

Maybe agents are more common in Europe? Which continents did you rent on?

Brokers in NYC routinely try to charge two months' rent, which is a whopping 16% of the rent.

I've had them try to tell me, with a straight face, that it's only 6-10%. They always look surprised when I ask them what two twelfths is. I think that some of them literally don't know what the actual percentage is.

Don't forget all the marketing, time spent with potential renters, background checks, etc you have to do on your own.

And if that's not enough, in Japan there's no law that regulates the rental contracts so, every time that someone wants to rent a flat, he has sign a bunch of abusive clauses.

In any case, being a broker must be a good business because Tokyo is full of them.

It's hard and landlords are mostly not interested in changing a system that has worked in their favor for years with people they have personal relationships with.

Brokers have keys to the apartments too. This is not easily disrupted.