The real cost of using a real estate agent to find a rental property

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Real Estate Agents in Bucharest – a helping hand or a source of frustration?

I read on many so called help sites that all agents, or the majority should be avoided or simply cheat client’s, or provide no added value. They go on to advise people to go direct to the advertising sites such as OLX, Imobiliare etc and to deal with owners directly.

I speak as an expat myself, a professional landlord with a personal property portfolio, a property manager, as a manger of agents in this domain.

Yes, some agents and in particular, in Bucharest do indeed deserve to be avoided. But so do some landlords and so do tome tenants. Buta. good agent should save you both money and time.

Let us speak about landlords. When a property owner advertises directly, they may be doing so without any advice on how much to charge for his offering, nor what quality level to provide, not what should be included in the contract.

Therefore renting from an ill-advised landlord can leave a tenant paying too much, with a sub-standard property and perhaps over-priced. You might also reasonably expect that your contract is not as meaningful as you might require and your rights are diminished. In fact the risk of not getting value for money can be many times higher when you do not use a professional broker.

What about the agents fee? I hear you ask.

I can tell you that the running costs of a typical rental department are responsible for a significant part of any commission charged. The lowest budget a rental agent can operate on exceeds 1000 euros for a one man team. Also consider, that agents usually try to reduce the landlords requested rent to a fair market value. 10% reductions are normal. Sometimes 25% reductions are sought by agents. Tenants who go direct rarely feel comfortable to seek such a reduction. This represents a significant saving per year.

Example, if a tenant pays 350e where an agent might have negotiated down to 300 for them, they are paying 600e per year more and have only saved 150e in agent fees, plus they still suffer the potential risks above.

If a rental property is say, 600e per month, and a landlord is just 10% overpriced, the tenant will pay 720e too much per year, which is more than double the 300e agent fee they saved.

They higher the rent, the bigger the loss.  I give below 3 examples of apartments that were rented by us, on behalf of owners The listed value it sh price the owner wanted.

All of these apartments are the cheapest and best of their kind in their respective buildings to the best of my knowledge.  I welcome any challenge for someone to send me photos of a better equipped apartment for less than these values.

http://whitemountain.ro/ForRent/one-bedroom-apartment-for-rent-greenfield-residence/593562d9-a347-4cd2-9dde-997b4285b651 – we rented one identical to this for 330 euros fully furnished.  Annual saving over requested price, 480e. Agent fee, 165e.

http://whitemountain.ro/ForRent/spacious-studio-greenfield-residential-complex/a5f334d8-9cdf-4588-b9c3-8c7e96b09424 – rented for 200e, saving 300e per year, agent fee 100e.

http://whitemountain.ro/ForRent/fully-furnished-executive-studio-in-citylights-pipera/ae9e6156-2cec-492a-8256-b31e088b2376 – rented for 250e, annual saving of 480e per year, agent fee 125e.

So as you can see, in all 3 examples here the saving over not using an agent is significant. The quality level is are very high, and the tenants’ rights are very protected.

1 COMMENT

  1. Wright,

    I am not in totally agree with the article, there are significant improvement on a legal side but nevertheless the so call quality of the agents is poor…and sometimes misleading customers in order to make a quicq buck…

    All the best!
    Freelancer
    Lucian F.

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