Now the broker’s fee is too damn high!
A real estate agent recently collected an eye popping, nearly $20,000 fee on a cheap Upper West Side pad, according to the tenant who shelled out the dough.
The one-bedroom unit was initially advertised for $3,750 a month on StreetEasy, but the agent told prospective tenants that it was actually rent stabilized and would be a steal — just $1,725.
That is well below Manhattan’s median rent, which hit a record $4,150 a month in July. And any future rent increases on the apartment would be limited by the city’s Rent Guidelines Board — which this year approved a 3.25% increase for one-year leases.
Then the agent, Ari Wilford with City Wide Apartments in Manhattan, dropped the other shoe. The broker’s fee would be $20,000.
“He said, ‘Looking at the rent-stabilized price and looking at the broker fee, it will make sense in the long term,’ which, at the end of the day, it does. But at the same time, it’s like, wow, that’s a lot of money for a broker fee,” recalled the tenant, who didn’t want to be identified.
The renter said he managed to get Wilford to shave $500 off the fee before sealing the deal, taking a chunk out of his savings to pay it.
The apartment is in what owner Solil Management describes as a “rustic 6 story prewar elevator building” near Central Park and Frederick Douglass Playground.
Despite the huge cash outlay, the pad wasn’t even going to be painted ahead of the renter’s July 1 move-in date.
He said he paid even more money to put his belongings in storage for a week so the landlord could add a fresh coat of paint.
The hunt for a New York City apartment has become so grueling that prospective tenants are standing on long lines to secure tiny spaces. Gone are pandemic price breaks and bidding wars are even breaking out on some units.
But a broker’s fee of $20,000 is unusual — even for the current hot rental market, experts said. The typical fee is usually one month’s rent or a maximum of 15 percent of a year’s rent.
“I’ve never seen that and it’s not something I’d do. All my fees have been 15 percent,” said Marvin Michel with Douglas Elliman.
Broker Dolly Lenz told The Post the practice “probably isn’t kosher,” and if the tenant complained loud enough, “could probably get the money back.”
One person who viewed the Upper West Side apartment said the $20,000 fee was an indisputable turnoff to him — on top of what he said was poor natural light in the unit.
“I just thought it was the most ludicrous proposition,” said the prospective tenant, who didn’t want to be named.
Another agent at City Wide Apartments also asked a sky-high fee for an Upper East Side railroad flat, which was also rent stabilized, with a monthly rent of $2,250, according to a report on the Hell Gate website in June.
The prospective tenant declined to pay the reported $10,000, the site said.
The state Department of State, which licenses real estate agents, said there was no law that sets a limit on broker’s fees.
“However, a broker’s fee must represent charges for actual services. Real estate licensees are obligated to act with honesty in their dealings with the public, and cannot perpetrate a bait-and-switch, charge exorbitant commissions that have no reasonable relationship to the work involved in earning the commission, or have undisclosed conflicts of interest,” spokeswoman Mercedes Padilla said.
She added that the “department takes licensee conduct seriously and investigates complaints filed on a case-by-case basis.”
Renters had a brief reprieve from paying broker’s fees after the Department of State in 2020 ruled that under rent legislation passed in 2019 landlords should shoulder the cost. After a legal challenge by real estate industry groups, the DOS walked back its position in May 2021.
Wilford declined to comment. His boss, Michael Jacobs, did not immediately return a request for comment nor did Solil Management.
Additional reporting by Jennifer Gould