Realtor Commissions in Central Jersey

[Daniel Greenberg]

Hello BP community! First post and wanted to see what your collective opinions were on a topic. I currently live in a townhouse in Central New Jersey (yes, it is actually a place) and am looking to move into a single family home next year. My wife and I are exploring the option of keeping the townhouse when we move out and renting it out. We have a realtor who we work with and like (to buy the new house and list our current home for rent when the time is right). However, he works for a well known real estate company and they only have "one package" for helping clients rent properties, which is one month's rent in exchange for listing on the MLS, screening tenants, background checks, credit checks, property advertising and other services. My wife and I feel that we can do most of the "finding a tenant activities" ourselves (minus listing on the MLS which we wanted to pay a flat fee but our realtor doesn't offer JUST MLS listings for a price).

Our problem is that the party who pays for the realtor commissions varies from area to area in the entire state and can range from tenant pays to tenant/landlord split to landlord pays. One months rent seems high for these services even though i understand that is the norm, but I feel this is a trap for new real estate investors who are looking to be more passive with their investments. It seems cheaper to just do these things ourselves, with minimal headache. I have no problem if we get to use a realtor and the tenant pays but I don't think this is a good expense if I (landlord) pay for the service as it cuts into my bottom line. What are your experiences with realtor commissions? Do you just pay the fee as a landlord? How do you offset the cost? Do you split with tenant? Do you fear that in an area where traditionally landlords pay for this commission, if you list as "tenant pays" that you'll turn away potential tenants? My area is landlord pays and tenant/landlord split (slightly in favor of landlord pays). What do you all think?