Commission to a realtor when renting and renting out an apartment - what is it and who pays it?

The essence of the concept

What does commission mean when renting an apartment? A commission is a reward for the intermediary's assistance in renting housing. In fact, this is payment for services actually provided to the citizen. What does a citizen who contacts a realtor pay? When concluding contracts with agencies, the following services are paid:

1. Selection of options that meet the stated conditions.
2. Presentation of the filmed object with on-site visit.
3. Conducting negotiations with the owner.
4. Drawing up a contract and being present at its conclusion.

A specialist will help you competently evaluate all the advantages and disadvantages of the rented housing and check the technical condition of the equipment.

By contacting a realtor when renting or renting a residential property, the tenant saves a lot of time searching for a suitable option, and the owner saves on searching for a respectable and solvent tenant.

Kinds

A commission is a one-time amount paid when renting or renting a property. It should be distinguished from rent for premises. You can learn about what the payment for renting a living space includes, as well as what the tenant must pay for, from our articles.

If you negotiate directly with the property owner, there is no commission at all.

The commission paid to the agent is of two types:

1. When renting living space. It is paid by the client renting the living space . He pays for the provided, selected options and their demonstration.
2. When renting out living space. This type is paid by the owner for selecting tenants and negotiating with them.

In both cases, support for the signing of a bilateral agreement is paid.

Who will pay?

Who pays the realtor's commission when renting an apartment? According to the established tradition in the real estate market, the realtor's commission is paid by the tenant .

But this, as a rule, is when renting out housing in the low and middle price categories .

But for the rental of luxury real estate with a high rent, the owner of the property pays, since most often the rental of such housing is a business.

In very rare cases, by agreement of the parties, the commission is divided between the two parties to the transaction.

Read on our website about how to confirm expenses for renting housing on a business trip, as well as how to receive compensation for renting an apartment to a military personnel.

How to earn more

There are methods that will help make income more stable for everyone: both for private traders and for agency employees. The point is to find new sources of income while remaining a realtor.

Offer related services

A realtor makes money thanks to his gift of persuasion. Convince the client to purchase additional useful services. For example, checking the history of an apartment for legal purity or assessing the real price of the property so that the client does not underprice or, on the contrary, does not raise the bar.

We have compiled a list of additional services that you can offer to the client and increase the cost of the transaction:

• Check the history of the apartment and the legal purity of documents;
• Assess the investment attractiveness of the object;
• Help with registration and registration;
• Help in obtaining a mortgage or loan;
• Analyze the real estate market;
• Take upon yourself to resolve a difficult situation (for example, help a client’s lawyer in formalizing the division of property during a divorce or if the owner of an apartment is declared incompetent).

Start collaborating with partners

There are services that are not directly related to the responsibilities of a realtor. For example, after buying an apartment, a client wants to make repairs, or the apartment needs to be thoroughly cleaned before showing it so that it does not fall in price. The broker does not do all this, but nothing prevents him from offering such services to his clients. This requires partners.

Partners receive new clients from you, you from partners receive a certain cashback, and your clients receive a more comfortable package of services.

Who can be a partner:

• Mortgage broker;
• Insurance Company;
• Legal consultation;
• Cleaning company;
• Interior designer;
• Repair team;
• Manufacturers of furniture and kitchen equipment;
• Hotels (for clients who come from other cities or countries).

Automate your work

You can increase your earnings using a CRM system. It’s not for nothing that two thirds of Russian companies have already implemented it or are planning to implement it. The program helps you earn more due to the fact that employees complete tasks faster, do not miss deadlines, do not lose applications, and process them before the client leaves for competitors.

Read on topic Do you want to know why a realtor needs a CRM system? In our blog, we described what problems this program solves and how it increases productivity.

Among the many CRMs, it is worth paying attention to programs designed specifically for realtors. For example, an industry-specific offer from SalesapCRM will make your life easier and help you earn more without being distracted by routine.

What the program does:

• Stores all objects in a single database and automatically selects suitable real estate based on the client’s request;
• Creates documents using templates in a second;
• Creates a PDF presentation of an object in just one click;
• Captures applications from the website and mail and automatically assigns tasks so that you do not forget a single client;
• Automatically generates reports on clients, applications, transactions and profits and displays them online directly on the desktop;
• Automatically publishes ads to 213 real estate sites so you don't waste any more time on it.

This is how ads from SalesapCRM are uploaded to 189 real estate sites in just 10 seconds.
Read on topic Are you still unsure whether to work in Excel or switch to CRM? For you, we compared the programs and described the pros and cons of Excel spreadsheets and CRM programs in one article.

So, is it really possible to make money as a realtor? Yes, but in the first months there may be no money at all. To reach a normal financial level, beginners need to look for agencies with training. More experienced brokers should offer more services, look for partners and learn new business programs.

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Size

How much should you pay a realtor when renting an apartment? The average fee is the amount of the requested rent. This is usually between fifty and one hundred percent of the estimated rent.

The amount of the commission may also depend on the type of transaction being made. The selection of housing can be carried out by one agency or together with a partner. If two agencies work for you at once, then you need to pay them 100% of the monthly rent . They will divide this amount among themselves.

The size of the commission also depends on the liquidity of the proposed option. Simply put, the more profitable the property in terms of price-quality ratio, the higher the commission.

What is more profitable: working for an agency or working for yourself?

The agency is the alma mater of every realtor. Everyone starts with this, and after gaining experience, many go into private practice. Do private realtors earn good money and where is it more profitable to work?

Agency

Private owner

Evgeny Palko, Moscow private realtor for the ners.ru forum:: - Many agencies set sales plans in such a way that the brokerage percentage depends on the implementation of the plan. Private traders get the whole jackpot. However, to be a successful single broker, you need to have a large client base and your own “suppliers” of good orders.

Conclusion: you can go to private realtors if you already have experience, a client base, recommendations and capital that will cover initial expenses. Is it possible to make quick money by becoming a realtor in an agency, even if you have no experience? Yes, but you will have to look for a place where they will teach you everything.

Read on topic How to learn to identify the types of clients who buy real estate and close transactions even with the most picky? Read on our blog

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Rent a property without an agent

How to rent an apartment without commission? As noted earlier, you can rent a suitable option without intermediaries, but finding it is quite difficult, and sometimes almost impossible . But there are several ways to get information without paying a commission:

1. Come to the inspection together with a realtor, and, if the owner is present during the inspection, try to arrange a meeting with him later and conclude a deal directly .
2. a figurehead instead of yourself for inspection , and after finding out the address, contact the owner.
3. Access the database and find an option there.

Of course, all these methods are scams, but they help save some money.

In addition, you will not pay any money as a commission if you find housing to rent on your own.

What does it mean to “rent an apartment without commission”? Study advertisements on special websites and in newspapers, advertise your desire to rent a home.

Why Internet services do not replace a realtor

Why is a professional realtor valued and why is he not completely replaced by online services? According to Mikhail Kulikov, director of the secondary market department at INCOM-Real Estate, a realtor can create complex chains of sellers and buyers in alternative transactions, of which about 80-90% of the total are currently concluded.

One of the people in the chain may suddenly throw out the trick and even abandon the deal on the eve of the agreed date. Kulikov emphasizes that a realtor must also be a good psychologist who is able to reassure such participants in the transaction and find a way out of almost any situation. The expert adds that online databases are still not able to cope with the human factor and are unlikely to ever be able to.

A separate issue is checking the legal purity of secondary real estate. As experts say, no one will give an ironclad guarantee that there will be no troubles with the apartment in the future. However, by using the services of the legal service of a real estate agency, the buyer will significantly reduce the risks. Marina Piatrovich says that the owner can hide important facts about the apartment: for example, that people are still registered in the living space or there are nuances with title documents, issues related to inheritance of real estate, debts for utilities and others.

In addition, a realtor knows how to bargain and can save the client money, notes Piatrovich. The intermediary's services may be less than the negotiated discount.

According to Oksana Vrazhnova, everything said above is typical for the real estate purchase and sale market - the Internet is used more actively in the rental market. Tenants often find an apartment without the help of a realtor - through friends, using social networks. But this applies to housing in the mass segment. When it comes to renting more expensive lots, employers and owners still prefer to use the services of real estate agencies.

Documents upon registration

When paying a commission to a realtor, it is worth drawing up an agreement with the agency . Carefully study what you have been given to sign before giving away money. It may happen that the owner is a fake .

If you paid a commission to a realtor, and then for some reason the owner suddenly terminated the contract or turned out not to be the owner at all, you will not be able to get the money back.

If the contract specifies a specific commission amount, and it is signed by you and the agent, then in the event of force majeure, you can demand a refund of the paid commission from the agency. Perhaps even through the courts. Reputable agencies always formalize the payment of commission as expected; this can also become some guarantee of the purity of the transaction .

Do not rush to enter into contracts and pay commissions to private agents , this can lead to trouble.

When does the realtor get paid?

Agency services are paid depending on the circumstances of the transaction and the volume of services ordered:

• after completion of the transfer of ownership of the apartment;
• after signing the purchase and sale agreement, before registration in the Unified State Register of Real Estate;
• in parts at each stage (for example, half when signing the contract, half after transfer of ownership to the buyer).

Regardless of who pays for the realtor’s services, the contract must clearly indicate the moment and procedure for payment.