Are you or tenant paying Broker Fee? Why or Why Not?

[Nadiyah M.]

I am investor/landlord and Real Estate agent so I've been on both sides.  As you probably know, that average rents in NJ are $2000-2500.  Most tenants are reluctant to pay equal to one months rent, however, I've rented a few where they pay with no problem.  I listed 2 newly renovated apartments on behalf of another landlord.  They are sitting because of this.  What is your experience? 

[Natalie Schanne]

@Nadiyah M. - For every rental I've posted in Central New Jersey (Mercer or Burlington County), the landlord or owner has agreed to pay the broker fee (negotiable, often 1st month's rent which is split 1/2 listing agent, 1/2 buyer's agent). The listing agent is responsible for any or all of the following: photos, room measurements, data entry, talking to agents, assisting the owner with reviewing tenant applications, getting the lease completed and signed, collecting the first month's rent and security deposit. (Usually the first month's rent is made payable 1/2 to listing agent brokerage and 1/2 to tenant agent brokerage). The tenant's agent is responsible for any and all of the following: finding or suggesting properties for tenant to rent, driving and opening doors to show the tenant multiple properties, advising tenant on finding a good deal, reviewing lease with tenant, preparing the lease and collecting checks. After the agent's brokerage takes 30-50% of the money, on a $2000 rental, this could amount to $500-700 in the pocket of each agent for 5-20 hours of work each.

If the owner doesn't agree to pay the broker fee, usually agents will not invest the time to list the property. I would not do it because it's very tough to help a tenant secure a place right now. I have not been able to get paid on 95%+ of tenants I've tried to help secure something that wasn't my listing because they often find another property where I can't get paid, tour directly with that apartment building or owner, and sign directly with that apartment building or owner. 

At least Central Jersey is not New York City, where buyer brokerage fees may be custom. It seems like perhaps things are changing. However, we have to remind owners that every 1 month vacant is $2000 they didn't receive, so what's the difference if they paid it to me and I found them someone on Day 3?

On about half of my rentals, I have gotten the tenant agency as well (dual agency) because they contact me directly from zillow / realtor / apartments com / yard sign, etc.