How much do REALTORS® charge to find a rental?

Finding the perfect rental property for clients is a delicate balancing act. And so is figuring out how much to charge them for finding an ideal home. As with any professional service, you’ll want to charge appropriately for your time, effort, and expertise involved in the process. 

Setting the right fee structure not only reflects the value you provide, but also helps you remain competitive in the real estate market. In this guide we’ll help you determine how much to charge for a REALTOR® fee, understand industry standards, provide tips for communicating your rates effectively, and more. 

What services are included in REALTOR® fees?

Before we dive into the details about how much to charge a client for finding a rental, it's important to know which services a fee covers. These typically include:

• Marketing the rental property
• Advising the landlord on rent estimates
• Assessing the current rental market conditions to find options that meet your clients' needs 
• Conducting property searches based on your client's criteria
• Arranging and conducting property viewings and tours for clients
• Following up with prospective tenants
• Screening prospective tenants to create a shortlist of best candidates for your landlord client
• Assisting with lease terms and rental rate negotiations
• Guiding clients through the rental agreement and paperwork process
• Facilitating rent payment collection and key handoffs
• Providing ongoing support and advice post move-in

Who pays the REALTORS® fee for a rental?

The responsibility for paying the REALTORS® fee can vary depending on the location of the property, the agreement between the parties involved, and the standard practices within the real estate market of a particular area. For a better understanding, let’s take a look at these common scenarios:

Tenant pays the fee

In many high-demand rental markets, especially in major urban areas like New York City and San Francisco, the tenant usually pays the REALTORS® fee. 

Landlord pays the fee

In  less competitive markets, a landlord may cover the REALTORS® fee 

to attract quality tenants quickly or minimize vacancy periods. This can also be beneficial for landlords since it can potentially lead to better tenant retention. 

Shared fee

In some cases, the REALTORS® fee may be shared between the tenant and the landlord. This is particularly common in balanced market conditions, where supply and demand are relatively equal. The landlord and tenant may also agree to split the fee for high-end and specialized rentals. Tenants seeking these kinds of rentals may be willing to cover part of the fee to access your expertise, while landlords benefit from your ability to find suitable, high-quality tenants.

How much do REALTORS® charge to help renters find a rental?

While real estate commissions are almost always negotiable, they typically adhere to industry standards. Here are the most commonly used practices to determine how much to charge renters when helping them find their next home. 

1. Percentage of annual rent

One common method is to charge a percentage of the annual rent. Although this percentage can vary widely, it typically ranges from 10% to 15% of the first year's rent. For instance, if the annual rent is $24,000 ($2,000 per month), a 10% fee would be $2,400.

2. One month's rent

In many markets across the U.S., it’s standard for Realtors to charge the equivalent of one month's rent as their fee. This straightforward approach makes it easy for clients to understand and budget for the final move-in cost.

3. Flat fee

Other Realtors prefer to charge a flat fee for their services which can be beneficial in providing clarity and consistency, especially for clients who might be wary of percentage-based charges. Depending on the services provided and the market conditions, flat fees can range from a few hundred dollars to several thousand.

4. Hourly rate

Although charging an hourly rate for your time is rare, it can be ideal for clients who need limited or specific services, such as negotiation assistance or lease review. Hourly rates can range anywhere between $50 to $200 per hour depending on your experience and the services provided

Communicating your fees effectively

Once you’ve determined your fee structure, it’s essential to communicate it clearly and confidently to potential clients. Here are some tips:

1. Transparency

Be upfront about your fees from the outset. Use a written agreement to clearly outline what services are included in your fee and any additional costs that might arise. This not only ensures clarity but also legally protects both you and your client.

2. Value proposition

Highlight your market knowledge, negotiation skills, and the time you save clients by handling the entire rental process. Consider sharing success stories and testimonials from past clients to build trust and demonstrate the value of your services.

3. Flexibility

Flexibility can sometimes be the key to securing a client. Be open to discussing your fees and possibly adjusting them based on the client’s needs and budget. 

How to set competitive rates

To ensure your rates are in line with your competition, follow these pointers. 

1. Market research

Regularly research what other Realtors in your area are charging for similar services. Staying competitive is crucial, but you want to make sure your rates reflect the quality and scope of your services.

2. Evaluate your costs

Think about your business expenses, such as marketing, transportation, and administrative costs. Does your fee cover these expenses and also provide a reasonable profit margin?

3. Adjust for experience

As you gain more experience and build a stronger reputation, don’t be afraid to increase your fees accordingly. Experienced Realtors offer more value and can justify higher rates.

4. Specialize

Consider focusing on a particular niche, such as luxury rentals or corporate relocations. Concentrating on a niche allows you to charge higher fees due to the specialized knowledge and services you provide.

When a renter may benefit from hiring a REALTOR®

Opting to work with a REALTOR® can save renters time and increase the likelihood that they’ll secure an ideal rental property, among many other benefits such as helping them navigate potential challenges with ease. 

Navigating competitive markets

In a competitive market, especially in high-demand areas, finding available properties that meet specific criteria can be challenging for a renter. With the help of a REALTORS®, renters can streamline the search process and don’t have to worry about finding and scheduling viewings. 

Access to exclusive listings

Because REALTORS® often have access to listings not yet available to the public or on popular rental websites, renters can gain an edge in finding desirable properties before they are widely advertised.

Negotiation expertise

When it comes to securing favorable rental terms, including lease duration, rent amount, and potential concessions, expert negotiation skills are handy to have, which renters can get when they work with a REALTOR®.

Support in the application process

Sometimes the rental application process can be overwhelming for renters. But a REALTOR® can provide step-by-step guidance for renters to ensure they understand each part of the process and avoid common pitfalls.

Local market knowledge

A REALTOR® can provide insights into neighborhoods, amenities, and commuting options that renters may not be aware of. With local market knowledge, renters can make more informed decisions about where to live, which can be particularly beneficial for those relocating to unfamiliar areas.

When a renter might not benefit from hiring a REALTOR®

While hiring a REALTOR® can be advantageous in many rental situations, there are some scenarios where a renter may decide to proceed without one. 

Limited rental inventory

In markets with ample rental inventory and low competition, renters may easily find properties without the need for a REALTOR®'s extensive search capabilities.

Familiarity with local market

Renters who are familiar with the local rental market, including available listings, rental rates, and neighborhood dynamics, may not require additional guidance from a REALTOR®.

Simple rental needs

Renters with straightforward rental requirements, such as those looking for standard apartment leases in non-competitive markets, may find the services of a REALTOR® unnecessary.

Personal connections or referrals

Renters who have personal connections or referrals to landlords or property managers may be able to secure rental opportunities without needing a REALTOR®'s assistance.

Cost considerations

In some cases, the cost associated with hiring a REALTOR® may outweigh the benefits, especially if a renter’s budget is limited and additional expenses are a concern.

Strong DIY skills

Renters who are confident in their ability to navigate the rental process independently, including conducting property searches, negotiating lease terms, and completing paperwork, may not require the support of a REALTOR®.

When a landlord may benefit from hiring a REALTOR®

A REALTOR® can be an invaluable asset for a landlord and here’s some of the reasons why. 

Professional marketing and exposure

In addition to having access to multiple listing services (MLS), a REALTOR® can also access other advertising platforms that ensure maximum exposure for rental properties. REALTOR®s can create compelling listings with high-quality photos, detailed descriptions, and virtual tours that attract a larger pool of potential tenants and increase the chances of finding qualified tenants for landlords.

Tenant screening and selection

For many landlords, conducting tenant screening can be tedious, time consuming, and even stressful. REALTORS® can relieve that burden by conducting thorough background checks, including credit history, employment verification, and rental references on behalf of their landlord clients. 

Expert pricing and market knowledge

A large part of attracting quality tenants and ensuring profitability for a rental property is about setting the right rental price. A REALTOR® can bring in-depth knowledge of local rental markets to provide accurate, data-driven pricing recommendations for landlords. 

Legal compliance

As a REALTOR®, one of your many responsibilities is to stay updated on local, state, and federal rental laws, which can help landlords avoid legal pitfalls and potential disputes such as eviction issues, discrimination claims, and lease violations.

Time and stress management

Managing a rental property isn’t easy, especially for landlords with multiple properties or those who live far from their rentals. A REALTOR®  can help take on the day-to-day responsibilities of property management, including handling inquiries, showing the property, coordinating maintenance and repairs, and addressing tenant concerns. 

Efficient handling of vacancies and turnovers

When a tenant decides to move out, the turnover process can be labor-intensive and costly. REALTORS® streamline this process by managing move-out inspections, coordinating necessary repairs or cleaning, and marketing the property to new tenants. 

Financial management and reporting

Many REALTORS® offer financial management services, including rent collection, accounting, and detailed financial reporting. By providing landlords with regular financial reports, you enable them to gain a clear overview of their rental income, expenses, and overall financial performance, aiding informed decisions and identifying opportunities for growth and improvement in their property investments.

Access to professional networks

REALTORS® have established relationships with various professionals, including contractors, inspectors, legal advisors, and financial planners. And for landlords needing reliable services or expert advice, connection can be invaluable in helping to support all aspects of property management.

Simplify rentals with RentSpree

With RentSpree, you can streamline the entire rental application process, making it easier and more efficient for prospective tenants to apply for properties online. RentSpree also provides integrated tenant screening services, including credit checks, background checks, and eviction history reports. 

Additionally, RentSpree offers a centralized platform for managing rental listings, enabling REALTORS® to showcase properties with detailed descriptions, photos, and virtual tours. This comprehensive approach not only saves time but also enhances visibility, helping REALTORS® attract a broader audience of renters and establish themselves as trusted professionals in the competitive rental market. See it for yourself here.