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Having to pay broker's fee after backing out? HELP

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Having to pay broker's fee after backing out? HELP

Postby 5556999 » Fri Jul 26, 2013 6:16 pm

Hi,

I'm a college student in NY and this is my first time looking for an apartment. I found a studio on Craigslist, contacted the poster, viewed the apartment, and although I was dubious about some aspects of it, it was in a great location and I was eager to get a new apartment ASAP. The person who showed me the apartment told me immediately there would be a $300 dollar deposit/fee to take it off the market, so I obliged and followed him to the real estate office.

I sat down with another dude, whom the agency belongs to, and he started giving me all of these numbers and figures and at the end of it I didn't even know what to think, let alone what to ask. It turned out to be a 600 dollar fee ($100 for the application, $500 deposit) to take it off the market. I was sketched out but agreed anyway, and after throwing more numbers at me, he had me sign a piece of paper titled "Financial Breakdown," listing all of those numbers and at the bottom saying verbatim,

"I, (name), agree to pay (real estate agency) the agreed upon commission of 3000 for (address) unless the landlord rejects my application. I understand that the application fee is unrefundable. My deposit is refundable should my application be rejected."

I signed it and I didn't think anything of it, and I left the office after he said he would let me know once my application had been accepted. I immediately regretted it, to be honest, but the next day he called to inform me that my application had been accepted, and that I should go in to pay the deposit ASAP. But at that point I no longer wanted to live in that apartment, so I called and said that I would be backing out. He said I still had to pay the 3000 dollar broker's fee because "legally, he fulfilled his job as a broker which is to get me an apartment," even though I haven't signed the lease or decided to move in. He did not tell me that I would be losing any money if I decided to back out when I met with him initially.

I know a lot of it was my fault, I shouldn't have signed anything without knowing all of the terms of the agreement upfront, but I did feel like he tried to take advantage of me being young and alone. The slip of paper I signed was weird and it did feel rather open in terms of interpretation. He also assumed that since I was Asian and my dad lived in another country that my dad couldn't speak English. On about three occasions during our initial conversation he mentioned to me about how since I'm an international student, it's easy for me to "flee" to another country without paying rent??? (But I'm not, I'm a U.S citizen...)

I told my dad about this and he told me to just refuse his phone calls and ignore him, that he's just trying to take advantage of me. But I'm kind of scared because I feel like I'm in the wrong, although I really don't see why I should be paying a broker's fee for an apartment I'm not moving into especially since they still have my 500 dollar deposit.

He keeps calling and the last time I answered his phone call, he told me to bring the check in ASAP and that he would help me find another apartment free of charge? Which I felt was sketchy because it feels as if the fee is arbitrary and he's just saying that I HAVE to pay it so that I go into the office and he can try to sell me another place and actually earn the fee. Does that make sense?

I was just wondering what to do in this situation, what my rights are, if I have to pay, what will happen if I don't pay.

Sorry about my rambling, I just figured it would be easier to get advice from someone of every detail of my situation was outlined. Thanks for your time and your help!
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Postby TenantNet » Fri Jul 26, 2013 8:17 pm

To be honest, we can't answer this. We deal with issues tenants face once they are in the apartment, not issues with brokers in the renting process.

You can check with the NYS Attorney General's Office; they handle broker issues. You should also immediately check to see if this company is licensed by NYC or NYS (the requirements depend on what the company actually does). Look up prior complaints on this company.

Can you send us the name of the company by private mail? Just so we know in case we're asked in the future.

And in the future, never trust anything on Craig's List (mistake 1) and you might do better going to college somewhere outside of NYC. Living in the city is not for the feint of heart. And no matter what anyone says, NYC IS a foreign country.
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Postby super renter » Sun Jul 28, 2013 8:38 pm

I agree with Tenant Net saying you should check with NYS Attorney General's office -- you can do it online. Also, all Real Estate brokers and salespersons must be registered. Again, check it out online. You can file complaints against registered brokers/salespersons.

I am not an attorney. That said, I would follow your father's advice and just ignore them, especially verbal communications. If they really want something from you, let them put it in writing. They are trying to take advantage of you! Can you stop the checks? Under no circumstances would I pay the broker's fee.

In my experience, an application fee is non-refundable, so you probably lost $100. A deposit is usually to hold the apartment and is refundable. I would read whatever you signed VERY carefully.

Tenant Net is correct about Craig's List -- a lot of scammers out there. And, in this rental market, they're in full force.

That's funny about "fleeing the country." You sound well educated in your posting -- I see many with much poorer grammar. If you were truly an "international student" without US citizenship, they could and probably would ask for several months' rent upfront.

I had a similar situation several years ago when I was in a bind and needed to find an apartment. It was a co-op and needed to pass the board before I could sign a lease. I rescinded my application way before the co-op board was supposed to meet, and the broker went ballistic. The broker even gave the owner of the unit my email address. After a harsh email from the owner, I wrote back and explained what had happened and suggested she may want to change brokers. She did, and the unit sold in less than months.

So, there are happy endings! Don't let an unscrupulous broker bully you :)
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