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Agengy fee's

Malvern, PA
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205 posts
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Agengy fee's

As an owner I am curious on what tenants think of paying realtor fee's for processing paper work. I just recieved a lease and this particular agent is charging the tenant $45. Plus they are taking 12% of the rental. They are pocketing $423 between this processing fee and their commission. I believe that they should get something but why do they need to take money from both sides.

I as an owner am embarrassed that they are doing this, and feel more people should just rent directly from the owner.

If you rented my property you would save the processing fee, and I charge a little less because I do not have a commission to payout.

Just an FYI to any one that is going to rent in OC. The realors take anywhere from 10% to 15% of the rent. Plus they charge you anywhere from $25 to $45 for a "Processing Fee".

Pcean City, NJ
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98 posts
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1. Re: Agengy fee's

We've been around this corner before...what you fail to admit is that many people on BOTH SIDES would rather deal with an established 3rd party. While many people who own and many people who rent are fine about dealing directly, many others would rather not go through the trouble and are happy to have the 3rd party in the middle. I think what we all have to realize is that neither system is right for everyone.

Also, I really get tired of people complaining about what other people charge for services. If you don't want to pay the Realtor fees, then I would suggest you just rent directly. While it may not "work" for you, I think you overstep the bounds when you attempt to take people's livelihood away from them.

If you truly are "embarrassed that they are doing this, and feel more people should just rent directly from the owner" then I would suggest you de-list your property and go it alone like many others do.

Maryland
Destination Expert
for Baltimore
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4,924 posts
19 reviews
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2. Re: Agengy fee's

Better yet--to avoid embarrassment, why don't you simply instruct the agency to take the $45 out of your end of the transaction?

If my calculations are correct, you're charging $3,150 in rent, and the combined fee/commission would then equate to 13.4% of the rental--still within the typical 10-15% range you cite.

I don't think you're going to get a lot of replies from tenants stating that they love to pay the $45 fee. No more so than they'll tell you that they love to pay $3,150 in rent.

Malvern, PA
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205 posts
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3. Re: Agengy fee's

Pennlyn- You are correct that we have gone over this before and I counted on you being the first to respond.

As I stated in my original post I am not against the agencies from making money. I am against the fact that they charge both parties. In the end it is the tenant that pays both fees. Rents are high partially because the commission keeps going up as does this "Processing Fee". When a tenant rents from an owner in there eyes the owner is getting the entire rent. Which as we know is not true. I think a 10% commission is more then enough for an agent and an agency to make a living.

As for taking the listing away from the agencies is tempting since they have only rented 2 weeks so far. I believe in helping Ocean City's economy by using them. I just don't think they should gouge the people that pay our bills, and assist in my livlihood.

As for rentingit myself directly. I have been doing that for several years now, and it has worked quite well. This year I have 7 weeks and 2 weekends rented by owner, and 2 weeks agents. Again, we have been down that road before.

Tubman- Brings up a good point on having the agent add it to the rent, and for me to pay them more. Last time I asked a particular agency to lower the commission from 15% to 12% they told me to increase my rent by 3%. I could believe they told me that and when I said so I was told the tenant wouldn't know the difference.

AND, yes you are good with your math. That week does rent for $3,150. I have not been told by any of my tenants that they feel the price was to high. In fact last year we left a book out for people to leave a note about their week. Everyone left a nice positive comment about the house. Therefore I would have to say that the average tenant feels as if the price is right.

I guess both of you have no problems with the end user, our customer, the tenant getting stuck with added fees as well as you and me. (I assume Tubman is an owner.)

Out of curiosity how much of a % do both of you give to your agencies, and what is their processing feel?

For tenants that are looking to save money here are some web-sites to go to if you want to rent directly.

They are:

http://www.shoresummerrentals.com/,

http://www.rentatjerseyshore.com/fsbo.html, and

vacationrental.com/vacation-rentals/New-Jers…

Pcean City, NJ
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98 posts
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4. Re: Agengy fee's

Again, this is a country of choices and as such you can deal with whoever you please and handle your business dealings in anyway you wish. However to say, "I think a 10% commission is more then enough for an agent and an agency to make a living" is about as ridiculous as my saying that your $3150 is too high and that $3000 is more than enough for your property. I have no right to tell you how to run your business in the same way that I do not believe you have any right to tell the agents how much is "more than enough". You don't like how they run their business, don't deal with them.

You answer Tubman but your answer makes no sense to me. Once you get a lease from the agent you have your tenants name and address. If you want to return the fee, just send them a $45 check!

I also have to say I resent the tone of your posts. I have had very nice exchanges with folks on this site who rent directly. They were full of great info for folks who might want to try renting (on either side) without an agent. They were helpful and very friendly. At the end of your post you say "I guess both of you have no problems with the end user, our customer, the tenant getting stuck with added fees as well as you and me. (I assume Tubman is an owner.)". Trust me, that's not the kind of statement that's going to convince me that your way is better.

Just so you know, we have posted our property on VRBO and we are not against renting it that way, but as of today, We have 7 weeks rented through OC agents, 3 weeks rented personally, and no weeks rented via VRBO. Again my friend, what works for one doesn't work for all.

I would suggest we just admit that there are different strokes for different folks without making either assumptions about them or derogatory comments.

Malvern, PA
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205 posts
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5. Re: Agengy fee's

Pennlyn, I was going to respond to you last reply, but I figured why bother.

You see the glass half full and I see it half empty. If you want you can see it half empty and I will take the half full. Either way we will never see eye to eye.

So, back to my original post. I am looking to see what a tenant thinks on this matter.

Maryland
Destination Expert
for Baltimore
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4,924 posts
19 reviews
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6. Re: Agengy fee's

The agency is taking $423 total from the transaction because that is their cost of doing business--paying their employees, advertising your property, keeping their lights and phone turned on. And ultimately, this also includes returning money (profit) to those who've gambled on investing in the business. I wouldn't be surprised if the true "profit" in this transaction is somewhere around $45.

They're "pocketing" the money only in the same sense that you pocket your lunch money--at the end of the day, it's not there.

So, to answer your initial inquiry, I don't like paying these fees when I go on vacation. I don't like paying my taxes either, but I do so because it's the cost of my choice to live in a free society.

Would I choose an agency that doesn't directly charge me $45 over one that doesn't? I'm sure some out there make their choices on that basis, but I know I do so at the risk that it will restrict my access to some properties.

And--with all due respect--all of this is why I'd sooner deal with the relative anonymity provided by an agency, rather than directly with the type of person who's losing sleep over $45.

Lancaster, PA
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303 posts
12 reviews
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7. Re: Agengy fee's

Putting things into perspective, I spoke with the owner of an oceanfront condo in Myrtle Beach, SC. Most "motel" properties in this resort have "gone condo." Some prohibit owners from independently renting their unit(s), others allow it but "browbeat" the owners into renting through the property's management (by witholding services, etc.)

I was shocked to learn a 45% rental fee is "normal" (meaning some charge 50% or more!) All you get for this charge (in addition to the bookings) is daily maid service. The monthly HOA fees are also very steep and ballooning insurance costs are, of course, being passed directly along.

I am now curious to find out what the agencies get for renting "free standing" vacation homes, but I was told it is typically 20 to 25%.

Perhaps this puts the OC agencies in a less "piggish" category, but I agree that their commission should cover the minimal paperwork involved.