Profile picture for user382222

Should tenant or landlord pay realtor's commission?

I know the answer to this question varies from time-to-time and market-to-market.  The property in question is outside Davis Square in Somerville, MA.  My understanding is this is a highly desirable area, and that the current rental market is flooded with prospective tenants.  Based on that, it seems like the tenant should be paying the commission (though I know this is always negotiable).

Does anyone have any thoughts?

Thank you.
  • June 23 2012 - Somerville
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Answers (7)

Profile picture for Brad Pratt
I live just outside of Davis square and have a multifamily of my own there.  If you decide to use a Real estate agent to find you a rental just tell them you are willing to pay the full fee.  That way you will get better service and go straight to the top of the list if you are competing with other potential tenants for the same property.  However I would negotiate a lower fee if you are looking at high rent such as $2500/mo or more.  In that case you can just tell your agent how much you are willing to contribute to the fee.  Good luck!
  • July 12 2012
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In the Los Angeles market, the landlord always pays the commission.
The tenant does pay the security deposit of usually one months(or two months) rent as well as the first months rent and a credit report fee.

  • July 01 2012
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The tenant should pay their ‘leasing agent' for searching and showing properties. The fee is usually much less than a listing fee. In our region, a listing agent usually charges the 1st month's rent as commission for marketing, prescreening 100's of inquiries to sort out unqualified renters, showing, applicant screening and contracting. They in turn share 25% with a licensed agent that represents a qualified tenant, often in addition to the $500 or so the applicant paid.

Why use a professional agent in busy markets? – I rent about 10 homes per month and my clients who previously leased out their own properties will tell you that just because you can post an ad online and get lots of responses, doesn't mean you'll secure the right renter OR contract them in a manner that best protects your investment. If you are lucky, you'll never have an issue. If not, it could cost you thousands of $$$.

Licensed property managers can view applicants' FULL screening reports and see beyond the ‘summary' reports that private individuals are allowed to receive to identify red alerts otherwise missed. Experienced, high volume property managers usually bring a good, qualified renter in quicker due to their heightened exposure and network. More importantly, their landlord/tenants law knowledge, experienced, and lawyer drafted contracts (good PM's have custom agreements) significantly reduce a landlord's financial and legal risk.

  • July 01 2012
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Profile picture for user382222
Great, thanks for the input everyone -- this has been very helpful.
  • June 25 2012
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Profile picture for the_country_hick
In my area we have a free website that includes ads for apartments. We also have the newspaper. Why involve a realtor at all?
  • June 23 2012
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Profile picture for Newton EcoBroker
It comes down to supply and demand. It has bounced back and forth over the years with tenants paying full month's fees until about ten years ago when the market slowed in general as people purchased more condos, at the same time as more apartment inventory was constructed. It has been split fees mostly since then, until this year when it is rolling over to many tenants offering the full fee as demand heats up and inventory tightens. It is always hard to generalize though. Davis Square is a high demand area and landlords most likely are not interested in paying commissions at this point, although I personally feel a good real estate agent does a good service for both sides of the transaction and the split fee makes sense. Just my 2 cents....
  • June 23 2012
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Profile picture for wetdawgs
If a landlord is advertising using a Realtor, then the answer is clear, the landlord should pay.

If a potential tenant is looking for a property and hires an agent to look for a property, the answer is considerably less clear.    I, as a landlord, rarely will pay the commission.  In my area, the demand is so high that I have no reason to involve an agent, so won't pay for an agent.
  • June 23 2012
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