Rental Dementia: Shakedown Street
I was in the process of sneaking a law school kid into a doorman building that forbids students of any kind. It was around the corner from NYU and they just didn’t want snotty trust fund kids playing on the elevators. The plan was to put her mother on the lease and claim she would use it as a pied-a-tier. Of course the daughter would help her move in, and in the process get to know the building staff. We’d introduce her around and casually mention that, she’d occasionally be staying with her mother. It was a foolproof plan. If it ever came up, we’d explain that lots of older woman enjoy Hello Kitty furniture. Besides, it’s a huge doorman building in the village. Who would notice?
We had just finished taking one last look at the apartment, and I was in the middle of explaining why she’d never get thrown out, when the doorman stopped me. I panicked, they were on to us. He spoke in a very low voice, “You should talk to that guy,” and pointed to an older gentleman standing in the lobby. I’m thinking CIA? FBI? Rental Police?
As I approached this mysterious figure, he asked if I was an agent. I hesitated, but was willing to admit as much, just no more. “Good. My son wants to rent an apartment here. He’s on the phone.” I started to explain that I was in the middle of something, when he said, “You don’t understand. He wants to rent it now.” That was worth a minute, so I took the cell phone.
It took about two minutes to explain the entire situation. The excitable and middle-aged CFO on the phone had already seen the apartment and decided he wanted it. The problem was his company had originally hired a relocation firm for him. But over the weekend, he found a broker who showed him this particular apartment and now the two agents were locked in a death match over the fee. He was fed up and decided to cut both of them out of the deal. Pretty simple and very fortunate for me. He was at my office in an hour with checks and his tax return.
It was a family affair all around. A mother poses as a tenant for her daughter, while a father cases a lobby searching for a random agent. All in the name of securing an overpriced apartment. I was touched, and my thoughts tamed to my own parents, but then I remembered how much money I owed them and moved on to fonder memories…like two deals in one day, baby!
But sometimes jubilation turns quickly into frustration. Later I realized, I was working two deals but really only getting paid on one. This wasn’t a co-broker building, but then again, it was. I had a long-standing and dubious arrangement, a deal with the devil. But in this case, the devil was an incompetent half-wit, and I was getting very little for my unblemished soul. For every deal I make, my company kicks back half of the fee to the building managers. They in turn provide brokers with “exclusive access.” The big problem now is that the access is no longer exclusive. A few other shops get the same arrangement. So for an average deal my company kicks back a couple thousand dollars, but the wheels aren’t getting greased, and we aren’t getting any real preference. It feels more like a shakedown than a smart business move. They get paid on every deal, regardless of who brings it.
Tight market or no tight market, it’s always competitive. I don’t mind paying for some certainty, nor do I mind paying for efficiency. At least we have access. Whether it’s an individual agent or an entire office, this same deal is struck all over the city. It’s the reason I can’t get into certain buildings, or by the time we hear an apartment is available, it’s also coincidentally rented. Paying for access has its perks. Anyone looking to rent without an agent is referred back to us, as the building managers can’t collect a fee without us.
There’s nothing left to do but wait and pray. My nervous CFO starts calling the next day for confirmation, even though I told him that the building is notoriously slow in approving people. Every day he makes the same exact threat and sings the same tired song. “I handed you the easiest deal of your life. If I don’t hear anything today, I’m finding someplace else.” He was a terrible bluffer, but a world-class complainer.
The mother/daughter team, for whatever reason, was approved in just a couple of days, while the whiner waited almost two weeks. Of course, it took another week to work out the fee as he still didn’t understand. With half the fee going back to the building, it didn’t matter how “easy” the deal was, there was no room to negotiate. It’s why his original agent couldn’t split with the relocation firm. He paid 15 percent in the end, and I decided to call my parents. We caught up a bit before they asked how business was going. I told them—slow.
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