We live in a marvelous, annoying era in which startup geniuses constantly getting rich by "disrupting" mundane industries. Hotels? Disrupted. Taxis? Disrupted. On behalf of the beleaguered apartment hunters of New York City, I humbly request that someone disrupt real estate agents out of existence.
Real estate agents are everywhere of course—exercising their clammy grip over the housing supply from Olympia to Ocean City. But in cities like New York (and San Francisco, and... whatever other cities have real estate markets that resemble gladiatorial contests), renting apartments is a uniquely one-sided experience. With vacancy rates in the very low single digits, high demand, and competition from not only Wall Street motherfuckers but also international motherfuckers, renters are at a hopeless disadvantage to landlords. You will take what is offered, and you will pay what is asked, and you will accept it, or else you will pack your shit and mosey on back to where you came from and give up the dream of ever becoming a fashion person.
So here you are, the poor renter, already faced with insanely high rent prices and short supply. And into this mix comes: the real estate agent. Who is the real estate agent? He is a middleman. He is a toll to pay. He is the coin slot on the pay toilet that you must deposit money into in order to be allowed to shit. In this metaphor, shit represents "your entire bank account."
I do not want to exaggerate my point here. It needs no exaggeration. It is common, in New York City, for a real estate agent handling rentals—not sales, in which huge sums of money are spent and mortgages are signed and homes are made for a lifetime, but common apartment rentals—to charge a fee of 15% of the annual rent in exchange for their services. And what services do you get, in exchange for this monstrous tax?
- The real estate agent will unlock the door of the apartment so that you can look at it.
- The real estate agent will hand you lengthy forms to fill out to apply for the apartment.
- The real estate agent will give those forms to the landlord and tell you whether or not the landlord will deign to rent their apartment to you.
That is all. That is everything that the real estate agent does. I am referring to good real estate agents. The below average (or even average!) real estate agent will be unresponsive to emails, late to appointments, and completely ignorant of facts about the apartment you are trying to rent. That's okay; they know quite well that they don't need to provide any added value to you. They have the keys. And if you want the keys, you will pay them. And if you won't, some other poor bastard will.
Elements of the real estate process have indeed been "disrupted" by the internet already. Apartment listings are available on Craigslist and a million other sites. Facts about buildings can be found on Trulia. Recommendations for various neighborhood amenities are on Yelp. All of these things mean that real estate agents are actually providing fewer real services than ever. And yet they persist in existing. Today, it is easy for you, the aspiring renter, to make yourself a list of potential apartments to rent and arrange times to view them. You do not need a real estate agent's imaginary expertise to help you with this. All you need the real estate agent to do is open that door.
Sorry—you don't need the real estate agent to do that. You don't need a real estate agent to do anything! Renters at the low to moderate end of the price spectrum (most of us) would benefit from the immediate disappearance of all real estate agents. If apartment owners and landlords would show their places themselves and hand out applications themselves and award the apartment to the renter themselves, then we could save ourselves an extra 15% of the annual rent in fees. The problem is that real estate agents usually charge the renters, not the landlords, and the landlord can save a bit of hassle, and they know that there is a high demand for their apartments, so what do they care how much the renters need to pay? It will be paid.
For now. Until someone disrupts this bullshit. The outrageous fees that real estate agents charge amount to a tax on people who are obligated to move soon and therefore desperate to literally avoid homelessness. It is not a fair dynamic. Of course, since real estate agents are paid on commission, it's only natural for them to want to grab as much as they can when they can get it. It's a feast or famine mentality, and it hurts everyone.
Let's be honest: an idiot can unlock an apartment door and hand over some forms. What if there were a low-cost service that paid (vetted, accountable) people a reasonable hourly wage to—stay with me here—go around opening doors for people and handing out forms? This is a relatively straightforward, low-skill job. Landlords just want to save themselves a little time. They just need someone who will show up and hand over applications. People who are trying to rent an apartment without bankrupting themselves and who are capable of using Craigslist to find listings would surely be happy to have a very small surcharge added onto the price of the apartment for this sort of basic service, rather than having the entire application process held hostage by a middleman demanding a fee of $3,600 to unlock the door of a $2,000 per month apartment. Rich people looking for something fancy can continue to use deluxe brokers.
We'll see which is more popular.
[If someone starts this company please give me a 15% fee. Image by Jim Cooke]