In Chicago, unlike New York and some other cities, rental services are typically paid by the property rather than by the renter. It is important to understand how an agent’s compensation works and empower renters to make informed decisions. By being aware of how agents are compensated, renters can ensure they receive unbiased advice and explore all available options that best meet their needs. Transparency fosters trust and helps renters fully leverage the benefits of working with an experienced agent.
Assume you’re working with a rental service to find a one-bedroom apartment for up to $2,400 a month. How much is your agent being paid by the property?
Some buildings don’t cooperate with rental services, and an agent earns nothing by introducing a renter to those buildings, which are often highly desirable and offer competitive rent. What are the odds that a renter will learn about or be given an honest take on those buildings by a rental broker?
I’ve just looked at the broker compensation policies on available one-bedrooms at four buildings that do work with brokers. One is paying a flat fee of $1,000 to brokers. Another is paying half a month’s rent, a third is paying a full month’s rent, and the fourth is paying 125% of a month’s rent.
The gross commission that the rental agent splits with the firm he works at ranges from $1,000 to $3,000 on a $2,400 a month one-bedroom. The percentage of the commission that goes to the agent varies widely from firm to firm and from agent to agent within the same firm. On a 50/50 split the agent’s compensation would range from $500 to $1,500.
Using a rental broker or leasing agent can be a highly beneficial way to navigate Chicago’s competitive rental market, especially when you want expert guidance and a stress-free experience. Here’s why:
Rental brokers have extensive knowledge of the local market and relationships with a wide variety of buildings. They can streamline your search by curating a list of apartments that match your criteria and budget, saving you time and effort. Their services are often free to renters, as the buildings compensate brokers. This means you get personalized assistance without additional costs.
A good broker is your advocate, helping you find the best deals and, in some cases, negotiating perks like move-in incentives or reduced fees. They also ensure you’re fully informed about the options, helping you make a confident decision. Brokers make the process smoother and less overwhelming, from scheduling tours to answering questions about lease terms. They’re beneficial if you’re new to the city or have specific needs, like pet-friendly options or proximity to transit.
No matter how you search, the ultimate goal is finding an apartment that feels like home!
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