did someone muck with the backend here

Re: Guest Post: The Agent-Principle Problem

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The angst seems to have passed pretty quickly. Maybe the other news pushed it off the front page or maybe making something marginally less exploitive doesn't cause a catastrophy?


Posted by: Moby Hick | Link to this comment | 02-14-20 6:21 AM
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[Narrator: What Moby meant is that he sent the link in six days ago.]


Posted by: heebie-geebie | Link to this comment | 02-14-20 6:27 AM
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It was supposed to be evergreen. It was many days old when I sent it.


Posted by: Moby Hick | Link to this comment | 02-14-20 6:33 AM
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What makes you think that it shook itself out, then?


Posted by: heebie-geebie | Link to this comment | 02-14-20 6:52 AM
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Yes. Our maybe it's quietly undermining society while we don't notice.


Posted by: Moby Hick | Link to this comment | 02-14-20 6:54 AM
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Like rainwater dissolving the limestone beneath a Florida residence.


Posted by: Moby Hick | Link to this comment | 02-14-20 6:58 AM
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Real question: has groundwater pollution alone demonstrably accelerated sinkholes anywhere? Presumably we've pushed up the carbonic acid levels everywhere, but only infinitesimally.


Posted by: Mossy Character | Link to this comment | 02-14-20 7:16 AM
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The rental market in NYC has been tight as long as I can remember, and landlords largely enforced the broker thing -- mostly they wouldn't rent to you unless a broker said they'd been paid. I never understood why it was the landlord got enough value out of whatever the broker did to enforce it, but it seemed to work that way.

The exception was always if you got wind of someone moving through word of mouth -- if you could present yourself as an acceptable tenant before the apartment was actually empty, mostly you could avoid the fees. But rarely otherwise.


Posted by: LizardBreath | Link to this comment | 02-14-20 8:22 AM
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That's a better way to put my question. If the owners knew people were willing to pay an extra month of rent to secure the apartment, why didn't they figure out a way to get that for themselves by higher rent?


Posted by: Moby Hick | Link to this comment | 02-14-20 8:29 AM
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My assumption on that kind of thing is always that there's some kind of cartel controlling the market, but I never understood the specifics.


Posted by: LizardBreath | Link to this comment | 02-14-20 8:31 AM
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Pure predation? That would explain why it was outlawed.


Posted by: Moby Hick | Link to this comment | 02-14-20 8:33 AM
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Vaguely related, YIL the "realtor code of ethics" applicable through 1950 said:

A Realtor should never be instrumental in introducing into a neighborhood a character of property or occupancy, members of any race or nationality, or any individuals whose presence will clearly be detrimental to property values in that neighborhood.

Posted by: Minivet | Link to this comment | 02-14-20 9:27 AM
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Blockbusting was a remarkable illustration of why we can't have nice things.


Posted by: Moby Hick | Link to this comment | 02-14-20 9:37 AM
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Wow, that sounds even worse than the (recently outlawed) UK system. You used to get charged a ridiculous fee by the letting agent when you entered into or even renewed a lease, but even then it was "only" a few hundred pounds and nominally to cover admin expenses.


Posted by: Ginger Yellow | Link to this comment | 02-14-20 9:41 AM
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I think this is where I'm supposed to note how cheap a whole house is here, but there are people repairing my ceiling right now and that turns out to be expensive.


Posted by: Moby Hick | Link to this comment | 02-14-20 9:43 AM
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The Boston area has been eyeing the developments in NY with some interest, since broker fees are pretty common. First+last+security+fee (so 4x monthly rent, all told) was definitely what I had to pay to start renting my last couple of apartments, and that really does add up.


Posted by: Nathan Williams | Link to this comment | 02-14-20 9:45 AM
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I thought "broker fees" was another one of those only-in-NYC things but 16 suggests it's in also in the other few cities that have chronic undersupply of apartments and exorbitant rents - is that right?


Posted by: Cryptic ned | Link to this comment | 02-14-20 9:57 AM
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It seems pretty straightforward to me. The landlord doesn't want to take the time to run background checks, verify employment history, call references, and show the unit. So they hire a broker to do all those things.

The broker needs to get paid. The landlord could pay them, but would rather not (for reasons ranging from cash flow to simple inconvenience). So the landlord agrees that the broker can charge the tenant. Once this norm becomes established, things like collusion between agents can become an issue. I am certain that the money the brokers will get from the landlords will be less than the money they got from the tenants. But the fee structure itself is easily explained.

And of course the money to pay the brokers has to come from somewhere. So the result of this will be some mixture of brokers accepting lower commissions, landlords accepting lower profits, and tenants accepting higher rents. The brokers will likely be less loyal to the tenants (for whatever that loyalty is worth) as the landlords are now the ones paying them.


Posted by: nope@nope.com | Link to this comment | 02-14-20 10:46 AM
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Brokers were loyal to tenants?


Posted by: Minivet | Link to this comment | 02-14-20 10:53 AM
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Yeah, there are tenants agents you can seek out and hire, but definitely not the norm and it's the landlords that are the repeat customers here. Instances of loyalty to a tenant instead of the landlord would be shocking.


Posted by: Nathan Williams | Link to this comment | 02-14-20 10:59 AM
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I feel like the thread title was a good way to more this very question.


Posted by: Moby Hick | Link to this comment | 02-14-20 11:00 AM
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The tenant is still going to pay, it's just going to be via the landlord, so it'll be tax deductible (to the landlord). Right? Who will capture this state subsidy? My money is on the landlords.


Posted by: CharleyCarp | Link to this comment | 02-14-20 11:33 AM
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Yes, the tenant is still going to pay SOME amount if the landlord now has to pay the broker and pass through the cost. However I bet the landlord, who has to have a considerable ongoing relationship with a broker, can make a deal with the broker to pay them a lot less than the tenant, who the broker only has to deal with once a year or once a lifetime.


Posted by: Cryptic ned | Link to this comment | 02-14-20 11:57 AM
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Should have just written "18 to 22".


Posted by: Cryptic ned | Link to this comment | 02-14-20 12:02 PM
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Blockbusting was a remarkable illustration of why we can't have nice things.

I get that "blockbusting" is shorthand, I have myself in the past, but as I read more about the historical context it seems to problematically imply a very narrow focus of who did what to whom in 20th century housing politics, making the responsibility seem narrow (fearmongering real estate developers) rather than broad (white people effecting segregation through voting majorities, laws and public institutions, business standards, and collective action, including terrorism).


Posted by: Minivet | Link to this comment | 02-14-20 12:57 PM
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*have used it myself in the past


Posted by: Minivet | Link to this comment | 02-14-20 12:58 PM
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Toronto has had the sort of opposite thing for ages, often apartments are found by a real estate agent and closed by escrow on 1st + last month rent (they aren't allowed damage deposits). The real estate agent gets 1/2 mo rent for it, but it is paid by the landlord not the tenant.

It's not universal but super common. And because it exists as I understand it, it's pretty easy to access for individuals who just want to rent their condo.


Posted by: soup biscuit | Link to this comment | 02-14-20 1:54 PM
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There was a landlord who owned like half the student housing in Providence and people who knew what they were doing didn't pay their last month of rent before moving out because he always kept security deposits on some made up premise. We did not know what we were doing.


Posted by: SP | Link to this comment | 02-14-20 7:24 PM
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I had no idea what I was doing the first time I rented in Boston. Was first surprised by the need to go through a broker and pay an enormous fee, then by the fact that after I gave them a list of what I wanted they showed me a bunch of astonishingly terrible places that met none of my requirements, and then of course I signed the lease for the marginally acceptable place they showed me last. Where the pipes burst and flooded my apartment a few months in.

I did better on subsequent occasions, but it required spending a lot more time looking, and being willing to have a real estate agent show me several places and then just tell them no and go find another one.


Posted by: essear | Link to this comment | 02-14-20 8:46 PM
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the broker thing in NYC was always a mystery to me, and I never understood why it didn't exist in SF too, which seemed to have a similar shortage of places to rent. coming up with three months rent as a college student seemed unreasonable--or four months with fee, first, last and deposit. my broker showed me places on st. nicolas ave or whatever till I was happy to rent a 5th story walkup in the last inhabited building on the street, all the rest sweeping down to the park with boarded-up windows. it was a nice apartment in it's tiny way, though I naturally got my nose broken in a failed mugging on my corner. knocked right out when I hit the pavement, just for a second. and all because I crossed the street to avoid the rats frolicing as they leapt from the buildings to the trash bags next to the street. nonetheless watching first season law and order with girl x is making me want to move back to new york.


Posted by: alameida | Link to this comment | 02-17-20 10:00 PM
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|| OT brief update: girl x was in the hospital five days; now we're fighting to keep her hydrated (her stomach hurts agonizingly when she drinks). the doctors don't know what's wrong. she missed her mocks and is too ill to study. girl y feels hurt and ignored like always. fuck. I mean, could be worse naturally. I know I have support and thank you for it--you should keep discussing broker's fees |>


Posted by: alameida | Link to this comment | 02-17-20 10:10 PM
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