Maggots begin to swarm Roosevelt Collection

by Joe Zekas on 8/7/09

After long experience, I’ve formed very strong opinions about apartment rental services, and often find myself shortening the phrase “apartment rental services” to “maggots.” It saves time, and keeps me focused on their salient characteristics.

Homescout Realty is one of the first maggots to swarm the Roosevelt Collection, lying (it’s the maggot business model) to prospective tenants about “40+ great shops” and “Fabulous restaurants and outdoor cafes” – fabulous, as in “existing only in a fable.” Look for many, many more maggot ads on Craigslist for the Roosevelt Collection.

I don’t mean to single out Homescout – they are, after all, just another pack of maggots among many in Chicago, and probably no worse than the rest.

The maggots all bill their “services” as “free” to tenants. The theory here is that, since the month or more in rent they typically receive as a commission is paid by the landlord, the tenant’s rent is unaffected by this significant cost. Got that?

I could go on at book length about the maggots’ slimy practices, but who wants to spend much time thinking about maggots? Read the legions of shills that Homescout has unleashed on Yelp for an example of typical maggot behavior. If you’re up for a little further amusement, ponder how, in Chicago, you assemble a team that’s nearly all-white and non-Hispanic.

If you’re looking for a new apartment, especially one in a large complex, do yourself a great favor and deal directly with the property manager / owner. You might cut a much better deal on rent, and you’ll have the added satisfaction of helping starve a maggot.

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{ 20 comments… read them below or add one }

Anonymous August 7, 2009 at 11:18 PM

I do not agree with you in this one. In example, if you try to get a good rent rate at Waterton’s Presidential Towers, even if you will to move within the complex after living inside for years, the management office will charge you $1500 in unexplained ‘fees’, while if you cut a deal with your so loved maggots outside the management office, you get a lower monthly rent than teh one at the management listed and no trace of that $1500 ‘punishment/invitation to leave the complex’. Sometimes feeding a maggot saves you from feeding a rattlesnake.

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Joe Zekas August 8, 2009 at 12:17 AM

Anonymous,

If I’m reading you right, one of two things is going on.

Rental services sometimes advertise lower rents at a complex than management is offering. Classic bait and switch.

Management companies sometimes offer lower rents through the rental services than they’re quoting directly as a way of not offering lower renewal rates to existing tenants, or simply to discount a few units without disrupting their overall rent structure.

In the latter case, the rental services haven’t achieved anything that a tenant who did his homework and bargained diligently couldn’t achieve on his own.

Earlier this evening, for example, I saw a rental service offering two bedrooms in a new high-rise for $300 less per month than the developer was quoting. If the developer in fact authorized that lower price offer odds are he’ll deal directly at the same rate. His alternative: a lower gross rent, less a month’s commission.

In any event, the scenario you paint is far from a typical one. The more common case is that a landlord grosses up the rent to cover the commission rather than eating the expense and the tenant pays dearly for a “free” service.

That may be happening less frequently in the current competitive market.

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Michael Krasman August 14, 2009 at 10:34 AM

Joe:

Allow me to begin by introducing myself. I am one of the founders of Homescout Realty and its managing broker. As we have never met before, and to my knowledge, have never conducted any business with you, I am shocked by your aggressive commentary towards my company. I would like to address several of the comments that you have posted.

While I gather, from your colorful language, that you dislike the entire apartment locating industry, I believe that you are allowing your strong emotions to cloud what appears to be a rather insightful and intelligent mind. Homescout Realty is NOT like every other company and we are doing our best to separate ourselves from those that practice unethical/illegal behavior. For example, we do not allow deceptive or inaccurate postings on any of our buildings. We abide strictly to all local and state laws. We are members of the National Association of Realtors, Illinois Association of Realtors, and the Chicago Association of Realtors (which requires all member offices to abide by an even stricter Code of Ethics than state and federal law require). All of our real estate consultants go through rigorous training and our reputation within Chicago is stellar.

I find it interesting that you purport to be an expert on Chicago real estate yet choose to attack our company using sweeping generalities and prejudice without taking a moment to actually talk to us. While I won’t defend the industry at large, as I happen to agree with you that there are many who don’t follow ethical business practices, I won’t allow our business to be attacked on false information. Each posting on Yelp was written by a real customer who had a great experience using our service. I don’t think it is a deceptive practice to ask our satisfied customers to take a moment to tell others about their experience with us. Consider for a moment why a company who has ‘650 craigslist ads’ (as you have stated in another of your unwarranted attacks on my company) would have only 60 yelp reviews. The answer is that they are real comments written by real people.

Overall, you seem to demonize the entire concept of brokerage in your attempt to ‘dispel’ whatever myth you assume exists about how and why we are compensated. I know you may not be currently looking for an apartment, but wouldn’t you agree that if you knew little about the city of Chicago OR were a busy individual who wanted someone to help you navigate the marketplace, there would be value in calling a company like Homescout Realty. Our real estate consultants know the available inventory in the city and can greatly reduce the amount of time and energy that it would otherwise take to identify the ideal property for a given situation. While I agree that we are not a match for everyone, there are many who greatly benefit from the service we offer. I don’t believe it is wrong for us to receive compensation for assisting in this process.

If you should like to discuss this further, I would be more than happy to do so.

Regards,

Michael Krasman

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Joe Zekas August 14, 2009 at 1:07 PM

Michael,

Thanks for your lengthy and thoughtful response.

I’m leaving shortly for a week’s vacation, but would be happy to meet with you when I return. My experience, just so you know, has been that I learn a lot more about rental services from watching what they do and talking to their customers and competitors than from what the firms themselves have to say.

When I return I’m sure you’ll have no hesitation at sharing with me the actual identities of your customers who provided testimonials on Yelp. Since you solicited them you know who they are.

In the meanwhile, anyone who knows anything at all about me knows that I value real estate brokerage services highly. I make my living from real estate people, and have done so for many years. When I moved my daughter to New York a year ago we enlisted the services of a real estate agent to help her find an apartment. We used one of the traditional brokerage firms rather than a rental service for reasons that you can probably guess – my firm resolve not to feed the maggots.

Looking forward to our discussion. Let’s do it on camera.

Also in the meanwhile, you might want to spread the word about your ethical standards throughout your organization. Some of your agents are still advertising, for just one example among many, “40+ great shops – pedestrian friendly retail plaza” in a community where those features, as you well know, won’t exist until the end of next year.

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Joe Zekas August 14, 2009 at 5:53 PM

Michael,

When we get together, let’s discuss the subject of unlicensed agents. As you know, that’s one of the major concerns I have about the way the rental service industry operates.

I just checked the first part of Homescout’s roster of “real estate consultants” against the state license database, and I’m reporting the results below. When we meet, please provide me with documentation to verify that each of the agents I’ve listed as “not found” in the state licensing database has been employed for less than the 120 continuous days permitted by law prior to licensing, and verification of the date when the required notice was given to OBRE with regard to each of those individuals.

Bonnie Brattain, leasing agent, 2/11/09
Brandon Cassar, not found
Colin Cheshire, not found
Chris Chjepy, salesperson, 5/28/09
Ali Cook, not found
David Hardin, not found
Ben Hinds, not found
Clayton Hines, salesperson, license expired 4/30/09
Brad Jaffe, salesperson, 8/08
Alexis Josz, not found
Chris Kelly, not found
Eli Litoff, salesperson, 7/16/09
Greg Pekarsky, salesperson, 3/31/08,
Becca Rinas, not found
Brad Robbins, leasing agent, 2/11/09
Jordan Simon, not found
Elliott Small, salesperson, 9/12/08
Ashley Strong, not found
Elena Theodoros, not found
Nicole Walters, not found

* date license originally issued

To my knowledge the unlicensed individuals are ineligible for membership in CAR / IAR / NAR.

Another of my ongoing concerns about the rental services industry is the snafus that inexperienced rookies often cause for their customers. I’ll look forward to hearing from you how your agents deliver such superior service despite their brief tenure in the industry, and how you maintain quality control when nearly 2/3 of the “consultants” I sampled haven’t been in the business long enough to attain a license.

You need have no fear about my “strong emotions” coloring my judgment. We’ll focus our discussion on facts.

Perhaps your strong response to my post caused you to overlook and fail to address the specific allegation I made about Homescout: deceptive advertising of the Roosevelt Collection. Deception that still continues, despite your assertions to the contrary. Let’s discuss that also.

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stephen August 18, 2009 at 12:16 PM

its not the least bit suspicious that all of the positive reviews are from dormant accounts with only 1 review and that all the negative reviews come from vibrantly active accounts.

Michael, give me a break! People who use Yelp are saavy enough to recognize that when there are 20 5-star reviews from accounts with no other history that they are fakes.

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Papu August 19, 2009 at 10:24 AM

^^^^^^^^^^^^^^^^^^^^^^^^^^^
Stephen is spot with his yelp concerns. Most of you reviewers are not active yelpers, but they decided that they were so impressed with your services that they opened up an account review your company and never used Yelp again. I am very impressed that Ashley B (in 2/19/2009) opened an account (with a photo) and praised you while dispelling any concerns people would have. Since that time, she never reviewed another business.

Did you give them a discount or Pizza Hut gift card?

I am suspicious.

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Papu August 19, 2009 at 11:03 AM

One more thing Michael. Why do all of your ads omit the apartment buildings address? I understand that you would want to keep the unit number private, but most of the ads on craigslist give the address of the building. By giving the address, you save people time of calling you about a building that they do not want to live in. By doing it your shady way, people will call, you will take their information, tell them to set up an appointment (in person, of course) and finally the person may find out that they already saw a unit in the building and they had no interest.

I also assume that sometimes you don’t even have the same apartment available, but you would be happy to show the persons something else, right?

You and your business have a lot of explaining to do, and you do make a lot of people sick. I have worked with your competition and they pulled the same “bait and switch” crap.

If you want to get back some respect, answer Joe’s questions and fix and start being honest and transparent in your listings.

As far as I am concerned you are a shady person, teaching young people right out of college the wrong way to conduct business. If you want to set yourself apart from your scummy industry, change today! Now you know people are watching.

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Larry September 7, 2009 at 3:15 PM

I read all this (which I must say is quite entertaining) and feel Mr. Krasman explained and answered Joe’s loquaciously allegations and concerns brilliantly. As intelligent people move into a large urban setting, having a company like Homescout Realtor can save them time, which we all know costs money, make connections though demographics (often important in networking), and find a comfortable safe and convenient home to live in (invaluable). The company and people that do this work are allowed be paid for their services. Thank goodness for the USA way.

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Joe Zekas September 7, 2009 at 4:01 PM

Krasman hasn’t addressed any of my concerns.

After meeting with him and his partner for well over an hour I remain firmly convinced that he runs a non-service and has at best a cavalier attitude toward complying with the laws that govern his business. Paraphrasing: “Oh, one of our agent’s licenses expired 4 months ago? Thanks for calling that to our attention. Another of our agents worked well beyond the 120-day licensing exemption? Must be a hole in our system. Agents licensed only for leasing are offering to assist buyers and sellers? We can’t track everything they do.” And so on.

During the meeting I felt like I was being “Gee officer Krupke’d.”

We ain’t no delinquents,
We’re misunderstood.
Deep down inside us there is good!

So how many people out there believe that first-time commenter Larry isn’t shilling for Homescout?

And how many people believe, as I do, that this is a company best avoided?

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Larry September 8, 2009 at 6:35 AM

Joe;
LOL! Again you’re stones are being thrown at the messenger. I do not work for nor was I ever paid by Homescout. But again my strong convictions in the American way support companies like Homescout who offer an invaluable service and should get rembursed or paid for that service. PS Joe do you work or own a competitor? When you saw the advertised or listed apartment did not have the available stores and services nearby, did you mention it to them so they could update and correct the ad which in turn would save other people time avoiding this apartment if it did not meet their criteria or did you just get on the web and yelp about nothing?

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Joe Zekas September 8, 2009 at 8:22 AM

Larry,

I don’t work for or own a competing rental service. My sister company, as anyone can see, performs advertising services for a number of major brokers. Make of that what you will.

Prior to my meeting, in response to my criticism, Homescout had changed its Roosevelt Collection ads. The changes, in my judgment, made them no less misleading. I raised this issue again when we met. I raised a raft of issues about the integrity of their business practices, which strike me as systematically and blatantly dishonest – a judgment I conveyed to them directly.

They repeatedly expressed their sincere (in their view) desire to run a more honest business than the balance of their industry. I didn’t find them credible. If they were sincere, which I deeply doubt, then they’re clueless about honesty and integrity.

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Papu September 8, 2009 at 11:59 AM

Larry probably works for Homescout.

I would like to go back to many points that were never answered.

1.) Why are there so many fake reviews on yelp? Most of their reviews have 1 reviews. Why would someone open an account, review Homescout and never use yelp again?

2.) Why are there craigslist ads misleading? No address, name of building, or any identifier to help the person make a decision. There ads have a lot of information, but they omit the most important parts.

3.) The negative yelp reviews say they won’t help people on the phone, why do they force everyone to come in for an appointment?

Larry, since you either work for the business or know a lot about it, why don’t you answer these questions.

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Joe Zekas September 8, 2009 at 12:58 PM

Papu,

Don’t expect anything from Larry. He’s one of these slimy things that slither around the Web at the behest of dark-hat firms. The Yelp reviewers likely fall into the same category.

Larry’s IP addresses trace to the Detroit Medical Center. He’s likely moonlighting at his employer’s expense.

As to why no addresses – well, if you knew that Homescout has only a very few apartment buildings to offer in the South Loop, and the MLS has better condo offerings, why would you go to Homescout to view them? Homescout does not provide a useful service except to those who are naïve or misled enough not to understand what’s really going on.

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Larry September 8, 2009 at 5:11 PM

Sorry about the typo in my above note as it should have read your stones…no I don;t work for Homescout and have no financial interest..I’m a professional that knows a good thing when I see it. But I do believe both of you, Joe and Papu have way too much time on your hands since you like to taint good companies by blasting whole industries, messengers and then coplain of minute problems..get a life. Thank goodness for the American Way…or would rather regulate everyone out of business then be bought out by the government…if so why don’t you guys see if Homescout can place you in an apartment in say Russia.

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Joe Zekas September 8, 2009 at 6:14 PM

Larry,

Can’t afford Internet access at home, Larry? Help keep our health care costs down – by going back to work at the Detroit Medical Center.

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Larry September 15, 2009 at 7:01 AM

ah again throwing stones..joe please get a life and where I access the internet is and happens to be none of your business. Joe can I do some inernet search for you to find a new place to live? Somewhere where you can be far from any people (as you don’t appear to like people) Larry

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Anonymous September 30, 2009 at 10:34 PM

As a landlord, paying significant amounts of money to “locators,” I expect a locator to, in fact, source a client that I otherwise would not meet, and earn his or her fee by convincing that client to visit our office so that our trained professionals can work with the client to see how we can best meet their needs and, hopefully, lease them an apartment.

What is effectively happening, unfortunately, is that the locators take content from our website and property information, take pictures of our property while touring as a “prospect” and then post it on the internet without our name, without our address and effectively represent the property and themselves as having a relationship that we in fact don’t.

For the renter, this means that the landlord’s costs are increased. In today’s marketplace, the landlord is “eating” the cost of a locator, but when times are better, it will impact rent. Today, the additional cost burden on the landlord means that other expenditures may have to “be put on hold”. Imagine 20 locator fees at $1,500 and the impact that has on the landlords ability to improve the business center or fitness center.

I will assure you that the locator is not getting a better deal nor do they have any leverage on the landlord. I would rather not lease to a locator client because I have to make the best deal I can with the renter AND pay a fee to the locator. It’s a poor option.

My recommendation to renters is to go in person to the property you are interested in, let the leasing professional, who is licensed, assist you and cut your best deal. The transaction without the locator is better for you and your landlord, I promise.

I suspect that a review of the real estate law in IL would indicate that representation of yourself as a controlling agent of the property may in fact be illegal.

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Former Locator October 1, 2009 at 10:40 PM

As a former agent who worked in this industry, I feel its my duty to weigh in on some the issues in the this thread.

Joe, your characterization of all of these types of businesses as maggots is an unfair generalization. While I agree there are several bad business practices within this industry, many of which I will address later, not everyone who shills apartments for a living is unethical. Myself and many of the agents with whom I have worked tried to make an honest living within the framework of flawed business model.

Why is the business model flawed? The person with whom the agent is working most closely, the apartment seeker, is not actually the client of the agent. The agent’s client is the landlord, they work for them. They are supposed to be representing the interests of the landlord first and foremost. The extent to which they are truly representing the landlord is debatable, but they are certainly not committed to working the best interest of the customer with whom they are helping to find the new home.

These agencies do not publish the addresses of the apartments that are for rent to protect their little slice of this market. If they were to publish the addresses online, the customer would go directly to the landlord to rent the property or even worse, a competitor will sign the landlord up for an non-exclusive listing agreement. They are a middle man for profit, struggling to maintain market share in an increasingly competitive industry.

These agents do not give out addresses over the telephone for a couple of reasons…again, they do not want the customer to go directly to the landlord and they do not want the customer to immediately disqualify using the service based on the address of one apartment, when they may have at least three or four to show to the customer…whether or not the customer wants to see them. We were told by our manager to do “kidnap” showings, since they are captive in our car, we can always show them one more.

Unfortunately, the job does not pay well enough for any serious career minded individual to commit themselves to over a long timeline. The agents are treated as employees, expected to work long hours and weekends, but paid as independent contractors, meaning there are no benefits, no paid vacations and no 401k. The top agent with whom I worked made about $85K before expenses, but average agents make about half of that. While not a bad gig, there is absolutely no room for growth. This explains why a company would have several newly hired agents on their roster at any given time.

I have personally reported agencies in the past for violations of license law, and I would recommend doing the same for any agency that does not maintain the minimum professional standards as required by our board.

My word of warning, you get what you pay for with free apartment services.

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JJ in SF November 15, 2009 at 1:51 AM

I enjoyed reading the article and the reader debates especially since I currently relocating back to Chicago and looking at renting at the Roosevelt Collection. I have no experience with Homestead but what is interesting is how the rental market has shifted since I left Chicago 5 years ago. I can tell that there is a large vacancy in condo-rentals in the South Loop so the real estate companies have now aggressively joined the rental broker market.

I have always had an issue with no-fee rental services – I am not the typical Chicago renter – I know my neighborhoods very well and always found it funny when the rental agent at these places tried to sell me on an apartment in “up and coming” areas that are in fact not that up and coming or would bend the truth to tell me how my rent range is only accommodated in less than desirable areas. I grew up in the city and have never had an issue finding an apt on my own and I am not cheap – there is always an incentive on their end to lease certain buildings/apts before others. My favorite trick is that they want to drive the potential customer and make sure that they never drive past the real part of the neighborhood (this happened to me once in 1992 from a very popular rental agency who tried to show me an apt in Uptown – remember how bad it was in 1992? – and told me it was Lakeview by taking the nicer side streets and avoiding Broadway… they still do this.

Now looking at it from their end, this is the nature of their business. Why would they print the apt address when they are trying to secure a renter without risking them going direct? It was not hard for me to figure out the name of the building but again I know Chicago well. These services work fine for busy professionals who are not familiar with Chicago and have little time to find an apartment – I would be curious of their renewal/referral rate.

Chicago is not NY and really does not need apartment brokers but there is a niche audience. Again I enjoyed reading the opinion piece and responses but I would not have limited it to one rental agency and may have contacted Homestead for an opinion before the attack to be fair.

I agree with the last posting – you get what you pay for… The client is not the apartment seeker but the landlord. In SF where I live, you hire an agent to work on your behalf and the incentive is a commission. Are these people maggots? Probably not. I wouldn’t call job recruiter maggots yet its the same situation (I never use job recruiters also LOL)

I knew that there are no retail tenants at the RC because they would not be renting under market value for what appears to be very nice units if there was retail/residential activity but I am sure people are surprise when they see the area. Its the renters responsibility to do some homework just as you would buying a car. I am not defending the agencies that misrepresent but targeting one agency in Chicago and not the others (I can name 3 companies that have been doing this for years) is odd. Then again, this is the issue with blog opinion pieces is that it’s really a strong opinion and not journalistic reporting…

Thanks again for posting this and the responses.

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