It's like in Canada where tenants can hire a broker for "free" to find a rental. However the broker just collects 1 month rent from the landlord. Do you think the landlord just absorbs the cost? No, the quoted rent was just 8.4% higher when the broker mentioned he was a broker.
Because in general, there have been easy-to-find examples in the past couple decades of rents going up 5-10% every year for folks in certain places with aggressive landlords. Were they willing to pay 5-10% more suddenly in year n+1, or were they charged less than the maximum they would've been willing to pay in year n?
Its like when a broker sells a house and says the seller pays the fee. In reality the buyer is the only source of money in the deal so they are effectively paying the fee.
Brokers have done a good job of telling landlords that if they don't use a broker, or use a cheap one, that they'll get bad tenants and that'll cost them a lot in the long term. Good broker = good tenants = worth getting 8.4% less, because you'll lose more than 8.4% when a bad tenant burns the place down....
I'm unconvinced that the above is true, but it's certainly the message brokers (fairly successfully) give landlords.
When the burden is paid by the renter, there's no efficient market because renter has no choice in the broker and the owner doesn't care.
It’s no different than the ridiculous notion that “the seller pays broker’s commission”. It’s baked into the price and the buyer is still paying it, otherwise a home would cost X% less.
I still think having this on a platform where a company is making a flat $250 fee (or whatever) is extremely scalable for the company and would benefit both the landlord and tenants.
In other cities property managers do the same thing, but they skim off the top of the rent checks and provide more services.
But really all the middlemen in housing are awful.
