Thursday, June 25, 2009

Apartment Brokers in Manhattan

Thanks to some recent developments, I wanted to update my blog on another lesson from the Manhattan real estate world.

Brokers will most definitely screw you over at every opportunity if it means more money for themselves.

I know that seems fairly obvious, but I hadn't actually been screwed over by a broker until the other day. As my experience might serve as a good example to Manhattan novices, I thought it could be valuable. Of course, experienced Manhattan real estate seekers will dismiss this as standard operating procedure, but they also won't troll the internet for advice either.

Anyway, after my four day journey through the streets and avenues of Manahattan, I had finally decided on a one bedroom apartment in Gramercy Park. The building was decent, the rent bordering on criminally indecent, but with the knowledge that I could technically afford it, I was ready to take the plunge.

I called up the broker and made him an offer for the apartment, at a reasonably large discount to the landlord's asking price. I got a counter-offer from the broker, which was a non-trivial reduction from listing price, and content with the offer, accepted it for a July 15th start date.

We had agreed to terms, and I began the process of gathering and sending him the requisite supporting information (which is particularly bizarre in NYC, but that's a different issue).

That was last Friday-Saturday-Sunday. I was relieved that I found a decent apartment and wouldn't have to fly back for a second expedition.

Of course, late Tuesday night I get an email from the broker in which he said they actually approved a different application and he'd let me know if any other 1B apartments come on the market.

Obviously, this wasn't the best news I got that day.

I was more than a little pissed, as we had negotiated back and forth over a couple days, and as I had already FedEx'd him certified checks for a large amount of money.

My guess is he found a new prospective tenant who was a) willing to pay listing price, b) willing to move in July 1st, or c) a smoking hot chick.

Regardless, it left me slightly screwed over.

So, as a soon to be New Yorker, I did what anyone in my position would do.

I immediately screwed someone ELSE over.

The next morning I sent an email to another broker who had showed me another one bedroom place I liked. The rent was the same as the first place, it was only a block away from the first place, so it was fairly comparable. I asked if anyone had rented it or whether it was still available.

The broker replied that someone else had in fact put in an application, but it was for the end of August, and if I wanted it for the beginning of the month (which is ideal for me), that I could have it.

It took me about 2 seconds to stab that unwitting prospective tenant in their now-homeless back...welcome to Manhattan I guess.

(Caveat: I still don't know that I've gotten this place, so I could be tempting fate by even mentioning it. But that hasn't really stopped me before, so meh)

I realized that I just willingly aided and abetted (which is worse than just aiding!) a broker in the act of screwing someone over. As such, I feel conflicted.

This must happen all the time, and it seems fairly ridiculous that it has to.

It got me thinking of what my ideal real estate marketplace would look like...

I started by eliminating all apartment brokers (don't worry, in my world, I didn't have them all killed or anything. I imagined they all went on to doing what they were second best at, which is usually either a) selling knives door-to-door, b) gym membership consulting, or c) abject prostitution.

The real problem we as apartment seekers suffer from is a lack of perfect information. We don't know what apartments in the area are available, we don't know which ones will become available, and we don't know who else is looking at them with any real interest.

This information deficiency is the only reason brokers have any power at all. They can tell us the apartment has seen a lot of interest. They can say that there are offers on the table at the current listing price. They can tell us that much like Jon Voight's LeBaron, the apartment has a built-in celebrity quotient.

And we all don't know any better, so we have to take everything they say with some level of skepticism.

If only there was a way to know more of this information without having to trust a broker whose only incentive is to get you to sign a lease ASAP.

Craigslist is certainly a step in the right direction, and PadMapper furthers that along in overlaying location information., which I found during my search and became an invaluable resource, may be the closest we can get to real estate Utopia (of course I'd argue real estate Utopia would be a world where every apartment included a full service gym, a washer/dryer in unit, central air, and enough internet capacity to satisfy a South Korean middle school)

StreetEasy tracks sales and rental listings in the New York area, and has a lot of great information including historical listings, length of time on the market, and price adjustments. I think it's a great website, and anyone looking to move to Manhattan should use it.

One underrated metric the site has is the ability to save listings to look at them later. How is that a metric? Well, each listing tells you (in small font), how many users have saved that listing. I'm sure I'm not alone, but I figured that the better the apartment, the more saves it'll have from other users. I know it's not exactly like a public auction (which as any economist would tell you is probably the preferred way to allocate the good in question...though I'd need to check with a real one for the answer), but at least this gives some directional information as to market interest.

The one problem with the site, is that the information is supplied by, you guessed it, brokers.

So it's not exactly Utopian, but I think it's another step in the right direction.