If tenant comes with agent, who pays the Agent?

[Andres Osorno]

Hello,

I am renting a house and have listed it on Zillow (not directly on MLS). I have been showing the property around, describing it to potential tentants, etc. I will also be reviewing applications, approving/declining tentants, drafting the rental agreement, etc. Today a potential tenant came in with an agent from Berkshire Hathaway realty, wondering if they were to apply and I select them, who would pay for their agent? I didn't post anywhere about any fees being paid to agents, one of the reasons I am doing all the legwork.

Any information/insight is very much appreciated. Thanks,

[Bjorn Ahlblad]

@Andres Osorno If the applicant met ALL my criteria including prior LL, employment, credit and background checks. Had the move in fee etc. I would pay the agent. You are under no obligation if you do not take the applicant. The applicants who pass Zillow screening generally don't pass mine by a country mile. So the agent from BH would have to be better than Zillow.

[Theresa Harris]

If the tenant was being shown around by the agent and the tenant hired them, they should pay the agent.  You didn't hire them.

[Kenneth Garrett]

@Andres Osorno

Most agents will ask you if you will cooperate with agents.  This means you will pay them.  I offer them $300 if they bring me a qualified tenant and I select them.  Typically it’s one months rent.  You can indicate in your listing agents are reimbursed through the tenant. I think it’s fair to pay them something but you are under no obligation.

[Corey Hawkinson]

@Andres Osorno The tenant would pay the agent. Or, it’s possible that the tenant’s company would pay the agent.

For example, my wife worked for a company that had her on a 2 year assignment in a different state. The company paid for an agent to help us find a house to rent. Since we were only there for 2 years we weren’t going to buy a place and since we were not familiar with the area the company recommends (and pays for) a local real estate agent to help with the rental search.

[John Underwood]

You have no agreement with the agent. If you paid them something it would just you being nice.

The prospective tenant is the one who has an agreement with them.

I baffles me that people can't go look at a house with everything listed online without an agent.

I have a 350k house under contract that I am selling. No agents involved. So I passed the savings to the buyer. People think the seller is paying for this but it likely affects how much the buyer pays for a house.

[Jackie Cramer]

Anytime an Agent tried to pawn off a sus....uh, prospect they have that I allowed to to see the house they were worse than the dregs zi has already denied.

Do not accept any of the Agents vetting, do you own

[Brian Briscoe]

@Andres Osorno

Agree with the above... tenant has entered into an agreement with the agent and you are under no obligation to pay.  It's the same in real estate transactions -- the seller is not obligated to pay the buyers' agents fees.  It is customary that they do though.  If a buyer enters into an agreement with a buyers agent and the seller refuses to pay, the buyer will be left paying the bill.

Follow-on point... Really just thinking outloud here... if you have a large portfolio and want agents to keep bringing you qualified tenants, maybe you reach out to them, let them know your criteria, and also let them know what extra bonus you're willing to pay.  If they have additional financial incentive to go to your properties first, they probably will...  Of course, this should be part of a larger marketing plan based on local dynamics.  You may not need to do so to get qualified tenants.

@John Underwood - I see you're from Greer!  Upstate SC is one of our focus areas for acquisitions.  We have 55 units in Spartanburg and are under contract for 80 in Pickens.  Would love to connect.

[Mike McCarthy]

I’ve had realtors reach out to me directly indicating they had an interested renter and asked if I’d work with them. I usually agree to 1/2 month rent ($600-800). I’m happy to pay if the tenant works out.

But unless it’s pre-coordinated, I wouldn’t get bullied into it or anything.

[Greg M.]

If I want to pay an agent for finding me a tenant, then I'll hire the agent and let them market the unit. If I'm marketing the unit, then I'm not pay an agent. 

Having said that, if you're in the type of area that takes a long time to rent, I would consider giving the agent something for finding me a qualified tenant early in the listing.

[John Underwood]

Originally posted by @Brian Briscoe:

@Andres Osorno

Agree with the above... tenant has entered into an agreement with the agent and you are under no obligation to pay.  It's the same in real estate transactions -- the seller is not obligated to pay the buyers' agents fees.  It is customary that they do though.  If a buyer enters into an agreement with a buyers agent and the seller refuses to pay, the buyer will be left paying the bill.

Follow-on point... Really just thinking outloud here... if you have a large portfolio and want agents to keep bringing you qualified tenants, maybe you reach out to them, let them know your criteria, and also let them know what extra bonus you're willing to pay.  If they have additional financial incentive to go to your properties first, they probably will...  Of course, this should be part of a larger marketing plan based on local dynamics.  You may not need to do so to get qualified tenants.

@John Underwood - I see you're from Greer!  Upstate SC is one of our focus areas for acquisitions.  We have 55 units in Spartanburg and are under contract for 80 in Pickens.  Would love to connect.

 Absolutely

[Jacob Jones]

@Andres Osorno

In my market, the tenants typically work with an agent with the expectation that the lessor will pay the agents commission. We typically see a half months rent for property listed on the mls and a few hundred from apartments and some landlords. That being said, it is completely in the hands of the landlord if they choose to compensate the agent and the amount is completely negotiable. A good agent would have already had a conversation about this situation with the tenant and come to an agreement about compensation ahead of time.

[Nathan Gesner]

You didn't advertise that you're offering to pay, therefore you have no obligation. The renter would have to pay the fee, if there is one. In some markets, it's common for agents to show potential renters around and then be paid for their time. It's part of the reason property managers will charge a percentage of rent to lease a property; they pay a portion of that money out to the other agents handling the showing.

Nobody pays anything in my area.

[Jill F.]

I've never seen a tenant come with an agent. Really, I thought that was a NYC or big city thing.  My apartments rent fast and I usually have multiple qualified applicants. I wouldn't pay an agent that I didn't hire.

[Adam Martin]

When I first started off I paid one $600 but I will not pay again.  I always have plenty of interest so I just tell them that in order to keep things on a level playing ground I do not pay commissions due to the fact I usually receive plenty of applications and this would put their client at a disadvantage since all things being equal I would be selecting the tenant that didn't come with a fee.  Sometimes they still request a showing but often they don't even bother to show which I'm fine either way with. I also feel like if they are working with an agent they are more likely to be looking to buy soon and I'm hoping to get someone longer term.  

[Karen F.]

Of course you don't pay the agent!  If a potential buyer comes with a buyer's agent, the buyer pays their own agent.

[Cliff H.]

From what I have seen with agents in the northeast, you are properly BOTH paying the agent. And, just like buy/sell, it makes it a dual agency agreement that’s ripe for abuse.

The days of the intermediaries extracting a few from both sides of an agreement are long gone. If an agent shows up with an agent that agent is carting them around to any number of other rentals, so who does that agent really work for? Not you, not exclusive, and if that renter is not interested, do you you think they’ll push for your property? Not a chance. Agents work for the tenant if they accompany the tenant.