Connect with us

Real Estate

Rental Agents Make Less Than You Might Think

Published

on

Elegant brownstones and townhouses in the Fort Greene area of Brooklyn, New York City

Here is the good news for New York real estate agents: On April 9th, a New York State Supreme Court judge struck down a ruling forbidding most rental agents from collecting commissions from tenants. The judge called the New York Department of State’s decision that such agents, when hired by landlords, could not receive commission payments from tenants an “error of law.” The department’s decision to ban the practice was the result of substantial lobbying from rental groups, including videos of renters bemoaning the fact of having to pay agent fees in order to rent a property. And now that the DOS ruling has been overturned, the same level of rhetoric is once again in play. “Those Hefty Broker’s Fees Can Still Be Collected,” moans Gothamist. “Tenants pay thousands of dollars upfront, regardless of whether the agent painstakingly aided in a search or simply unlocked the door for a viewing,” says The Real Deal (via “The Daily Dirt” Newsletter). As if, in 999 cases out of 1000, that is all the broker ever does! The fact that the consumer can often not see the work agents do does not mean it isn’t being done. 

I’d like to set the record straight. The vast majority of real estate agents don’t wear bespoke suits or couture, and they don’t earn seven figures a year. In fact, the National Association of Realtors reports that the median gross income for realtors countrywide was $49,700, with those who have 16 or more years of experience earning a median income of $86,500. And the median number of hours worked per week: 35, although 50 percent of NAR agents work more than 40 hours per week. 

Somehow the idea has grown up in recent years that real estate agents are either predatory, overpaid, or both. The quotes at the end of my first paragraph illustrate this perfectly: agents unlock a few doors (preferably wearing fur coats) and then stand back to collect the fees, which are hefty! The truth, at least here in New York City, could not be more different.

Like everything else here in the Big Apple, the real estate brokerage business is highly competitive. There are approximately 30,000 real estate agents in New York, and in the year which ended in February 2020, there were 41,880 sales transactions, according to data by Property Shark. When you consider that, as with most businesses, 20% of the agents are making 80% of the deals. That doesn’t leave a lot to go around for everyone else. And the rental market is even tougher. 

The litigation between the Real Estate Board of New York and the Department of State highlighting the payment of rental agent commissions is only one of a large number of lawsuits nationwide targeting the payment of agents. Much has been made recently of the fact that in Europe, sales commissions are half what they are in the U.S., as reported by The New York Times. While sales commissions in many European locations can run as high as 4%, the real difference is that European agents do not co-broke their listings. An MLS of any sort doesn’t exist there. The European system thus offers buyers or renters little protection: not only must they contact multiple agencies to be certain they are seeing a reasonable sampling of the properties available which suit their specifications, but they also have no representation in negotiations since the agent legally represents only the seller. There simply are not buyers’ agents in any real number. As we all know, self-representation in a transaction as emotional as a home purchase provides a recipe for disaster. Buyers could also save money in New York if they were not represented by attorneys. But is anyone suggesting that?

In the end, the opprobrium directed at agents for their desire to be paid for their work and try to earn a decent living rises at least in part from the fact that brokerage was, for many years, a woman’s business. Our culture has never had an easy time valuing the work which women perform. Even now, as the national agent profile becomes increasingly gender-neutral, parts of that early lack of respect for the work of agents, and a concurrent resentment at the payment of their fees, remain with us. It’s time these old prejudices were let go and the high level of professionalism displayed by most real estate practitioners receives the respect it deserves.

Continue Reading
Advertisement
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Real Estate

A Monument To Catalan Modernism Asks $5.9 Million In Barcelona

Published

on

Palau de la Musica

The distinct architecture of Barcelona, with its curved shapes, floral motifs and ornamentation, is defined by its Catalan Modernism. The aesthetically pleasing style was a major force in the larger Modernisme movement, which also permeated art, theater and literature at the end of the 19th century.

This recently refurbished Modernist house is located in the area of Tibidabo Mountain, the tallest hill in Collserola Natural Park, an expansive green space within Barcelona, the capital city of Catalonia.

Villa Paula, as it is known, was designed in 1912 by Spanish architect Jerome Granell Manresa. He is known for creating the stained-glass windows of Barcelona’s famed concert hall, Palau de la Música Catalana. Other examples of the stained-glass maker’s work can be found locally in the landmark Navàs House and the Hospital of the Holy Cross and Saint Paul.

Manresa’s use of sgraffito on stucco exteriors—to create contrasting color designs by scratching through the facade to reveal the layer below—remains in evidence on select residential buildings today.

The more than 8,200-square-foot home retains such original and restored Modernist features as the facade, the mosaic tilework, the high ceilings with moldings, the stained-glass windows and the Arabic-style roof crowned with green tiles. The four floors are accessed by a marble staircase and an elevator. The watchtower can serve as a guest house, an office or a studio.

The light-filled rooms have hardwood, marble or mosaic-tile floors, air-conditioning and in-floor heating. There are eight bedrooms, a conservatory, a home theater, a gym, a wine cellar and eight bathrooms.

The 10 acres of grounds contain gardens, terraces and mature trees. A gently curved staircase off the house leads to a terracotta veranda surrounding an infinity pool. A wooden deck below the pool level creates another outdoor lounging space. Views take in Barcelona and the coastline along the Mediterranean Sea. 

A two-car garage and a workshop complete the gated property.

Cristina Martinez of Immobiliaria Rimontgo is the listing agent for the estate, priced at approximately $5.93 million (EUR 4.95 million).

Villa Paula is located about five kilometers, or three miles, from Barcelona’s city center. International flights are available from Barcelona–El Prat Airport, about a 20-minute drive away.


Immobiliaria Rimontgo is a founding member of Forbes Global Properties, a consumer marketplace and membership network of elite brokerages selling the world’s most luxurious homes.

Continue Reading

Real Estate

Here’s Where Property Taxes Are The Highest And Lowest

Published

on

Mansion in San Francisco

Buying a home is exciting, but it’s also a huge commitment. And one of the responsibilities of homeownership is paying real estate taxes. How much you will end up paying can vary significantly depending on a variety of factors — from how much your home is worth to where you live.

To illustrate just how much variance there is in the amount of property taxes people pay, LendingTree looked at the median amount of real estate taxes paid in each of the nation’s 50 largest metropolitan areas. In doing so, the online lending marketplace found that homeowners in some metros can expect to pay thousands of dollars more per year than homeowners in other parts of the country.

“Different county and state governments assess property value in different ways, which can contribute to why tax amounts vary so significantly across the country,” says Tendayi Kapfidze, chief economist at LendingTree, explaining that individual areas also have different tax rates and offer different tax breaks to homeowners, which can also affect how much people are paying in real estate taxes.

Revenue generated from property taxes is generally used to fund local projects and services such as fire departments, law enforcement, local public recreation, education, street maintenance and sanitation.

The median real estate tax amount in Las Vegas — where homeowners pay the least in property taxes — is about $7,700 cheaper than in New York, where real estate taxes are highest.

Las Vegas and Birmingham, Alabama are the only two metros where median real estate taxes amount to less than $1,000 a year. The median property tax amount paid by homeowners is $696 in Las Vegas and $892 in Birmingham.

Besides New York, homeowners pay the most in property taxes in expensive cities like San Jose, California and San Francisco. The median amount paid is $8,400 in New York, $7,051 in San Jose and $6,181 in San Francisco.

“Despite these regional differences, how much homes are selling for in a given area is usually the most important factor in determining an individual home’s value, regardless of where you live,” says Kapfidze. “As a result, places where home prices are higher like New York and San Francisco are more likely to pay higher real estate taxes than other parts of the country, even adjusting for variations in tax rate or appraisal practices.”

Real estate taxes are an average of $641 lower on homes without mortgages. Because property taxes are based in large part on home value and homes without mortgages tend to be worth less than those with mortgages, it makes sense why this is the case. Nonetheless, real estate taxes on homes without a mortgage can still be pricey, especially in areas like Salt Lake City and Seattle.

“I think it’s fair to say that knowing how much you’ll pay in property taxes is about as important as knowing how much your mortgage payment will be,” says Kapfidze. “After all, both are things you have to pay in order to keep your home, and both can be significant expenses.”

Many lenders will roll your property taxes into your monthly mortgage payments, and then use that money to pay your tax bill for you when it’s due to the government.

“As a result, while you should always double check to be sure you’re paying what you owe in taxes, you might only need to keep track of one payment a month,” explains Kapfidze. “If you’ve paid off your mortgage, then you definitely have to keep a closer eye on property taxes as you’ll likely no longer be able to count on your lender to keep track of them for you.”

Here’s the LendingTree report, including the methodology, and full list of cities where real estate taxes are highest and lowest.

Continue Reading

Real Estate

How Digital Technology Changed The Face Of The Mortgage Industry

Published

on

Focused man and woman using laptop, checking financial documents

The rise of digital technology ushered in a new era for the mortgage application process as borrowers took advantage of historically low interest rates and lenders embraced digital mortgages more than ever before.

A new survey on borrowing and lending by ICE Mortgage Technology finds that the pandemic has permanently changed the way consumers utilize technology, and those looking to buy or refinance a home are seeking lenders who offer online tools to complete their mortgage loans from home.

The overwhelming majority (90%) of lenders believe that technology can help improve the mortgage application process, citing benefits that include simplifying the entire process (74%), reducing time to close (70%) and minimizing data entry (67%).

“Last year brought our industry a perfect storm,” said Joe Tyrrell, president of ICE Mortgage Technology. “You not only had COVID, which required lenders to shift to virtual workforces, but you also had to continue to conduct business in a safe and socially distanced way with borrowers, all happening at the same time that we were experiencing a historical increase in loan volume.” 

He added, “This caused many lenders to re-evaluate their technology partners, how they were leveraging technology, the systems that they employed, and the tools that they relied on. We heard many stories from our lenders across the country that had to completely and permanently shift the way they served borrowers.”

According to the survey, the importance of lenders offering digital solutions such as online applications during the lending process increased for borrowers in 2020, with 58% saying it would likely affect their lender decision (up from 50% in 2018). While still important, the offering of a mobile app specifically was less likely to influence borrowers’ lender selection, with 47% saying availability of one would factor into their decision in 2020 (compared to 40% in 2018).

Homeowners who used an online application appreciated the simpler application process (55%), reduced time to close (53%) and resulted in fewer in-person interactions (49%).

Not surprisingly, decreased in-person interactions grew in importance in 2020, as just 37% of consumers in 2018 cited “no need to meet in person” as something they liked about their online application process. Whether they had been through the mortgage loan process or not, 64% of consumers surveyed believe that an online mortgage process would make buying a home or refinancing easier than an in-person process.

“From a borrower’s perspective, the pandemic has accelerated the demand for a consistent, digital first borrowing experience,” said Tyrrell. “Signing documents electronically is quickly becoming the minimum, and borrowers expect a seamless experience from start to finish. In 2020, many lenders cobbled together different solutions to meet borrower demands, but that often led to a more confusing, fragmented process. Covid highlighted the need for a single consistent digital experience for consumers.”

Currently, online applications and online portals are the digital tools most offered among lenders, with more than nine in 10 offering both options to borrowers (91%). Of lenders who offer online applications, 64% said more than half of all loan applications are submitted online, while 38% said more than 80% of their applications were completed online in 2020. However, traditional loan application methods may be more common at larger organizations. Half of large institutional lenders, or those with 200 or more employees, indicated that less than 50% of their loan applications were submitted online.

Borrower respondents who were offered online and/or mobile options by their lenders took advantage of those tools during the mortgage loan process. Sixty-one percent of borrowers used an online application in 2020, slightly up from 58% in 2018. Sixty-one percent also used an online portal for electronically signing and notarizing documents, compared to 56% in 2018.

Continue Reading

Trending