Broker’s fee is what you pay a real estate company when we perform a service for you. The broker sets the fee. It can be any amount the broker chooses and in any legal form. When a fee is set for an apartment it cannot be changed because of who you are. But when it comes to the One-Shot Deal, it’s okay to discriminate when it comes to the broker’s fee.
PAY DIFFERENTIAL
A problem with programs is the way they deal with the real estate industry. Some programs such as the One-Shot Deal offer to pay broker’s ½ our fee. Even though we put the same work in for a program tenant as a non-program tenant.
How the One-Shot Deal compares with regular pay
No One-Shot Deal
- The broker or agent agrees to work with the prospective tenant.
- Broker’s fee is explained to the customer
- Help tenants to locate an apartment.
- Give the tenant list of required docs the owner requests.
- Background check on a tenant.
- Go over docs with the owner.
- Prepare lease with the owner’s requested rent.
- Tenant pays first-month rent, security and full brokers fee at closing.
One-Shot Deal
- The broker or agent has to work with the program tenant.
- Broker’s fee is set by the program.
- Help tenants locate an apartment.
- Give the tenant list of required doc owner requests.
- Background check on a tenant.
- Go over docs with the owner.
- Prepare lease with amount program sets.
- The program pays first-month rent. No security paid instead owner gets a voucher. The broker is paid 1/2 the broker’s fee. Which equals 1/2 the rent set by the program.
Click here to see: One-Shot Deal Example
A New Form of Discrimination
To me, this is discrimination because Program Tenants are not a protected class. Thus they are not privileged to special treatment or fees.
Is it not the city’s position that program tenants be treated the same as non-program tenants? If this is the case then why are realty’s forced to work with program tenants? Why are there two different fee structures? And while we’re asking questions, who gave the city the right to set fees for an entire industry?
Non-program tenants should be outraged. Non-program tenants pay a security fee. The program does not pay a security fee.
The non-program tenant pays the full broker’s fee. The program pays 1/2 the broker’s fee. Sometimes this is lower than the rental amount the owner is seeking.
Long story short non-program tenants can pay more than program tenants for the same work. Even though program tenants are not a Protected Class under the law.
Note: This is a practice that HRA under NYCHA uses and is not used by HUD Section 8. It also does not apply to all programs. As of this writing, LINC and HASA pay the full broker’s fee.
The Silence of the NAR
To my fellow brokers and agents in the National Association of Realtors, I have a question. How could NAR allow its members to be taken advantage of in such a way without so much as a whisper of disagreement?
I used to be a member of the National Association of Realtors until I could no longer afford the dues. Considering how much NAR charges and its strict requirements you would think that it would defend its members. And in fact all real estate persons from this practice.
But no, nothing not a peep. I know NAR is aware because members I know of have complained. Nonetheless, the practice still exists.
Yet Another Form of Discrimination
The law says we Special Agents must represent anyone that seeks our services. So long as they do not ask that we break the law. And like any other business, we can refuse to work for anyone that will not pay our fee.
Except it seems for people in programs. For this group, we have to work with them and accept less pay. Is this an unfair practice? I think so.
Things that make you go hmmm…
Fact: Program recipients cannot pay the difference in the broker’s fee. It is against the law so brokers must accept the less pay for the same work.
Question for the mayor. How would you like to receive less pay for doing the same amount of work just because of whom you are working for? If a woman were receiving less pay because she worked for a man this would be a federal case.
Yet another failure of the mayor’s housing plan.
Final Word
As with any other customer, a realty must have the right to refuse service to anyone that will not pay its fee. The realty must also be allowed to set that fee when it takes on a customer.
If the city wants to set a standard then it needs to negotiate that standard. Most realties-members or not of The National Association of Realtors-follow the model that the association sets out.
Fair Pay
Picture this,
- The city negotiates with NAR to set the broker’s fee in programs.
- It is agreed that fees will be equal to or greater than the full rent of the apartment.
- But if the program pays less than the full broker’s fee that a broker could accept or refuse to work with that program.
- Problem solved, discrimination ended
- Click here to see an example of the One Shot Deal and why brokers don’t co-broke on this deal
You just read: It’s okay to discriminate when it comes to broker’s fee
Next: The other side of the affordable housing problem
Disclaimer: I am not a lawyer and nothing stated here is legal advice. This article applies to the five boroughs of New York. All information deemed accurate but not guaranteed. Always check the real estate laws in your part of the country.
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