Agent charged me a lot to rent out my property

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Agent charged me a lot to rent out my property

Alex Moazeni
Rental Property Investor · Dallas · Member since 2021 · 84 posts · 22 votes

Hey.

Just got my single family house rent out and my agent charged me the full amount of first month rent?

Do you guys think it is what it spouse to be?

Last year she charged me 40% and she is saying she did just the teant portion and not me on last year.

But the norm way Is the landlord should pay lease and teant agent!!!

What is your thoughts??

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Bruce Lynn
Real Estate Broker · Coppell, TX · Member since 2011 · 5k+ posts · 4k+ votes
4y

That is normal in Dallas area.....1month rent and your agent will split some portion of that with the agent that brings the tenant.   Most tenant reps want 1/2.  Not all agents offer that, but it is what they expect.  Rightly or Wrongly if you offer less than that, there will be some agents who won't show the house.  Vacancy costs you money, so you might even want to offer more or a bonus to tenant reps to help your place rent faster.

Most of the time for agents to be helping tenants it is really a labor of love and hope of future business.  You think if your rent is $1500 and tenant rep gets 1/2 that, then they're at $750...split that with the broker and they're down to $375....paying for gas, car expense, key fees, dues, insurance, training, and chances are they're not making money doing that.  We do it, because we hope they're a buyer next year, or they have friends, family, co-workers that will be buyers or sellers.

I know it seems like a lot, but what I see is that this often gets you a better tenant.  Now treat them well so they stay a long time.  Put in place a tenant retention program.  Turnover is the worst enemy of owners in my opinion.

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  • Josef Hardi
    Investor · Member since 2021 · 73 posts · 48 votes
    4y

    Hi Alex, 

    I think it varies by market. I would suggest you call 4-5 other property management companies and interview them. Make sure they at least deliver all of the things your current management company does (in terms of tenant screening, tenant moving out, responsiveness, maintenance, etc).

    If you like your current management, you can try to negotiate some terms with her (perhaps offer to take pictures yourself, or do the listing yourself, etc).

    Hope that helps!

    1Reply
  • Bruce Lynn
    Real Estate Broker · Coppell, TX · Member since 2011 · 5k+ posts · 4k+ votes
    4y

    That is normal in Dallas area.....1month rent and your agent will split some portion of that with the agent that brings the tenant.   Most tenant reps want 1/2.  Not all agents offer that, but it is what they expect.  Rightly or Wrongly if you offer less than that, there will be some agents who won't show the house.  Vacancy costs you money, so you might even want to offer more or a bonus to tenant reps to help your place rent faster.

    Most of the time for agents to be helping tenants it is really a labor of love and hope of future business.  You think if your rent is $1500 and tenant rep gets 1/2 that, then they're at $750...split that with the broker and they're down to $375....paying for gas, car expense, key fees, dues, insurance, training, and chances are they're not making money doing that.  We do it, because we hope they're a buyer next year, or they have friends, family, co-workers that will be buyers or sellers.

    I know it seems like a lot, but what I see is that this often gets you a better tenant.  Now treat them well so they stay a long time.  Put in place a tenant retention program.  Turnover is the worst enemy of owners in my opinion.

    7Reply
  • Karen Johnson
    Investor · AMBLER, PA · Member since 2013 · 158 posts · 98 votes
    4y

    First month's rent seems common in this area. I don't usually use an agent or service, but whenever it's come up, this has been the cost.

    1Reply
  • Karen Johnson
    Investor · AMBLER, PA · Member since 2013 · 158 posts · 98 votes
    4y
    Quote from @Bruce Lynn:

    That is normal in Dallas area.....1month rent and your agent will split some portion of that with the agent that brings the tenant.   Most tenant reps want 1/2.  Not all agents offer that, but it is what they expect.  Rightly or Wrongly if you offer less than that, there will be some agents who won't show the house.  Vacancy costs you money, so you might even want to offer more or a bonus to tenant reps to help your place rent faster.

    Most of the time for agents to be helping tenants it is really a labor of love and hope of future business.  You think if your rent is $1500 and tenant rep gets 1/2 that, then they're at $750...split that with the broker and they're down to $375....paying for gas, car expense, key fees, dues, insurance, training, and chances are they're not making money doing that.  We do it, because we hope they're a buyer next year, or they have friends, family, co-workers that will be buyers or sellers.

    I know it seems like a lot, but what I see is that this often gets you a better tenant.  Now treat them well so they stay a long time.  Put in place a tenant retention program.  Turnover is the worst enemy of owners in my opinion.


    Thanks for adding this comment. It gives a lot more insight. I recently had an agent reach out to me about a rental and she immediately began asking by asking if I'd pay the fee, and told me absolutely nothing about the tenant in question. 10 mins of questions about fees and negotiation later, I guess she decided it wasn't worth showing to her tenant and I never heard from her again. I think I'm happy to pay the fee given the variables you describe, but in that case didn't feel that the agent actually had her tenant's best interest at heart. A totally anecdotal story and of course I could be wrong about her concern for her client. Either way, I will keep your feedback in mind next time I end up in a similar situation, especially if I'm having trouble finding quality tenants.

    1Reply
  • Drew SygitBusiness Member
    Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
    4y

    In metro Detroit normal charge is one month of rent.

    What did the contract you signed with the agent state?

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  • Kyle MccawBusiness Member
    Property Manager · Keller, TX · Member since 2011 · 1k+ posts · 1k+ votes
    4y

    @Bruce Lynn made some very good points. 

    1 month's rent is normal for a lease only situation. It should be less if they manage the property.

    Have you looked at your contract? That should spell out all the fees. Maybe the level of service you received last time was much lower. Soo many crappy agents just post the property and have the owner run application and create the lease. Run away from any agent that doesn't properly screen applications on a regular basis. Credit score is not enough. You need landlord references, verified income (lots of fake paystubs out there), how often do they move?...etc. Many tenants move every year to a nice clean place because they trashed theirs's. 

    A good agent would provide professional photos and YouTube video every single property. Everything cost time and money.

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  • Bill B.
    Investor · Las Vegas, NV · Member since 2013 · 8k+ posts · 10k+ votes
    4y

    Wow, I guess I’m spoiled in Vegas. It’s a flat $300 and rents range from $1500-$2200. I can’t imagine paying $2k to find a tenant. But I do pay that stoopid $150 renewal fee. 

    0Reply
  • Kyle MccawBusiness Member
    Property Manager · Keller, TX · Member since 2011 · 1k+ posts · 1k+ votes
    4y

    @Bill B. there are few agents that will still post a property for $300. But they only post it. No services provided.

    A few years ago Texas Board of Realtors passed a rule on Minimum Services Required of the Seller's (listing) Broker. It made brokers responsible for poor decisions their clients made due to lack of guidance. So it took out the $500 listing agents from the market place that just forward over the phone calls and emails. 

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  • Jossalyn Wallace
    Real Estate Agent · Destin, FL · Member since 2019 · 116 posts · 111 votes
    4y

    Depends on the state. I know in NY they generally charge a months worth of rent. Here in FL its next to nothing. 

    1Reply
  • Bill B.
    Investor · Las Vegas, NV · Member since 2013 · 8k+ posts · 10k+ votes
    4y

    @Kyle Mccaw posting it is free for the first month. They say it would be $30/mo after that but I’ve never had a 2 week vacancy. The $300 is given to the realtor that finds the tenant. 

    0Reply
  • Bud Gaffney
    Rental Property Investor · Boston, MA · Member since 2019 · 2k+ posts · 1k+ votes
    4y

    @Alex Moazeni I would find a new agent if I were you.

    0Reply
  • Masha Rizzi
    Investor · houston, TX · Member since 2021 · 44 posts · 17 votes
    4y

    Up to this point I've found my own tenants so I'm not sure what the "norm" would be. I assume it would vary by agent and area. 

    Regardless of what the "norm" is, you should ask questions up front with any agent or property manager you're using to place tenants. There should be no surprises with their percentages when it comes time to get a tenant placed. If you've been using them for a while and they did not inform you of their price/policy changes then I would let them know this and try to have a discussion with them about what options there are. 

    0Reply
  • Dave PoeppelmeierBusiness Member
    Realtor · Maumee, OH · Member since 2015 · 491 posts · 722 votes
    4y

    Yep, 1st month rent is very typical. Even as a Property Management company, we pay our leasing agent 1/2 the rent, and the other 1/2 goes towards our marketing, admin, etc. Was she doing the marketing aspect as well? 

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  • Lucia Rushton
    Realtor · Dallas - Fort Worth Metroplex, TX · Member since 2016 · 1k+ posts · 925 votes
    4y

    @Alex Moazeni. My personal opinion is one full months rent. Especially if they are listing it on the MLS. If they are only marketing it within their private database and no other tenant agent is included, then that is up to you.

    Brokers charge tenant represented agents a fee and if the commission paid by the listing agent ( you and your representative) is less than what the tenant’s agent has to pay their broker to help a client find a rental home, then they are out of pocket the difference and their expenses.

    Doesn’t sound worth it. I have seen some listing agents pay $1. Not professional, again in my opinion I

    2Reply
  • Kyle MccawBusiness Member
    Property Manager · Keller, TX · Member since 2011 · 1k+ posts · 1k+ votes
    4y
    Quote from @Bill B.:

    @Kyle Mccaw posting it is free for the first month. They say it would be $30/mo after that but I’ve never had a 2 week vacancy. The $300 is given to the realtor that finds the tenant. 


     Posting a property and leasing it up for a client are very different services.

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