What are typical broker fees when renting an apartment?

Broker fees for a standard one year lease can typically range from one month’s rent (8.3%) to 15% of the annual rent.  The amount is usually arbitrary and is either determined by the brokerage firm or the agent directly.  Broker fees are negotiable by law, but as in any negotiation, both sides must come to an agreement in order to move forward.

Discuss Fees Upfront
When working with an agent, it is smart to agree upon a specific commission upfront before viewing apartments.  This can eliminate any uncomfortable issues arising at the end of the deal and ensure that all parties are on the same page throughout the process.

Co-Broke Transactions
In the case where two brokers are involved in a transaction (one holds an exclusive, representing the landlord / owner, and the other represents the prospective tenant), the broker fee is typically set at 15%, since the fee must be split two ways.  In other words, if you are working with an agent and you are shown an apartment that is the exclusive of a different agent, it is considered a co-broke transaction (i.e. involves two brokers).

Most co-op and condo rentals tend to be co-brokes, as owners generally issue a real estate agent with an exclusive to rent out their property.  As a result, these types of rentals usually command a 15% broker fee.  In addition, certain rental buildings use a specific broker exclusively to rent out their units, which can require similar fees.

However, if you are not using an agent, but rent an apartment from a broker with an exclusive, you may be able to negotiate a lower fee, since the broker will not have to split it with another firm.

Note: When a real estate agent quotes a specific percentage, such as 10% or 15%, it is based on a percentage of the first year’s annual rent (not monthly rent).