Tenant Realtor Commission Policy Update

RentWerx Client FAQ’s:

Does this affect me if my home is NOT on the market For Rent?
No.  This only affects owners that have a home currently on the market or will be on the market For Rent in the future.  Our processes will gather the information from you to document the following questions at the appropriate time: 
1) Do you want to offer a Tenant Realtor Commission on top of the existing Leasing Fee?
2) If you do want to offer a Tenant Realtor Commission, how much would you like to offer?
3) Would you consider offering an approved applicant a move in concession of that similar amount in lieu of a Tenant Realtor Commission? (RentWerx Recommended)

Does RentWerx think owners should offer a Tenant Realtor Commission?
No.  There are dozens of large markets in the US where similar property management companies offering similar homes for rent have NEVER offered any sort of co-broker Tenant Realtor Commission.  Homes in those markets rent just as fast as anywhere else and without the involvement of a tenant Realtor.  Your future applicants will find their home on their own through the dozens of websites our homes are advertised on.  After they find the home themselves online, they are allowed to schedule a showing without a Realtor being present.  This has been ongoing with RentWerx close to 10 years now. 

If I offer a Tenant Realtor Commission, will this be on top of the existing leasing fee?
Yes.  We do not advocate for a Tenant Realtor Commission to be offered for a myriad of reasons.  Should you feel that offering a commission is necessary in attracting quality applicants, which we feel does not help and only hurts the process, that offered commission would be on top of the existing leasing fee.  It is billed one time at lease execution, and only applies if another Realtor was indicated by the applicant to be their representation. 

If I do offer a Tenant Realtor Commission, how much would you recommend?
We previously offered a $300 commission payable to the Realtor indicated on the application at time of lease execution. 

Why would it be wise to consider offering an approved applicant a move in concession of that similar amount in lieu of a Tenant Realtor Commission?
Offering a move in concession of any amount lowers the total cost for a tenant to move into their home.  If that approved tenant is represented by a Realtor, they would most likely be obligated to pay that Realtor outside of this leasing process if there is no co-broker commission being offered.  By offering a move in concession, that newly approved Tenant who is obligated to pay their Realtor out of their own pocket can apply that credit to the check they will have to write directly to the Realtor. 

Will offering a Tenant Realtor Commission potentially lead to STEERING?
Without a doubt, this will 100% lead to Realtors STEERING their clients to the highest paying rental homes on the market.  We feel this will only lead to a Fair Housing Complaint with HUD at some point, dragging the owner into a federal lawsuit.  If there is no commission involved, there is no chance of this becoming an issue to get sued by HUD and an overzealous tenant with an attorney attempting a money grab. This is the number one reason we DO NOT recommend offering a Tenant Realtor Commission.  

What if the Tenant Realtor ASKS for a commission?
If an application is submitted with a Tenant Realtor Commission attached to the pending approved applicant soon to be tenant, RentWerx will present that applicant’s offer to the owner client for consideration.  The owner client can decide at that time if they want to pay that commission. 

Example:  Owner client receives an application to rent their home.  With that application comes a request for an unadvertised $500 Tenant Realtor Commission.  That commission, if approved, would be added on top of the RentWerx leasing fee as an additional line item.  Keep in mind, that if the owner client said “no” to the commission – that the applicant would still be able to rent the home.  The Tenant Realtor would have to seek compensation from their client – the applicant now approved tenant – or not get paid at all. 

***This also brings on future questions of Tenant Realtors suing their clients (your tenant) over an unpaid commission.  Then dragging RentWerx and the homeowner into that lawsuit.***

Will my home take longer to rent?
At the time of this policy letter update, the best summary we can offer to the rental market is that it’s a weird time.  Days on Market are higher than we would like across the board in the entire region.  Monthly rental prices have increased faster than most tenants are able to afford moving into the market, or moving up into a bigger home.  We feel there are two things that rent homes – Price and Condition.  Our policy of only renting vacant homes ensures the condition is as good as possible, while leaving only one variable to the leasing solution – Price.  We would encourage owner clients to be aggressive in their pricing expectations to ensure their home is rented quickly. 

Will the leasing fee be reduced?
No. RentWerx has adopted a new program that would reduce the leasing fee if the home takes 31 days or longer to lease called the 30 Day Leasing Fee Guarantee.

Why do we charge a leasing fee?
The RentWerx leasing fee is a one-time charge applied at the successful completion of an updated or new lease agreement. This fee is designed to cover the comprehensive process required to ensure a property is leased to a qualified tenant as efficiently as possible. This fee is not merely an extra cost but an investment into maintaining the high standard of living expected at our properties and ensuring the leasing process runs smoothly and professionally. Here’s what the leasing fee typically covers:

1. **Marketing of the Property**: This includes professional photography, creating compelling property descriptions, and advertising the property on various expensive platforms to ensure it reaches a broad audience. Effective marketing is crucial in minimizing vacancy periods and attracting a wide pool of potential tenants.

2. **Tenant Screening**: To ensure the quality and reliability of tenants, the leasing fee covers the cost of comprehensive screening processes. This includes credit checks, criminal background checks, employment verification, and rental history reviews. These screenings are vital for mitigating risks and ensuring that only the most qualified tenants are selected.

3. **Showings and Tours**: The fee compensates for the time and effort spent by the RentWerx leasing team to conduct showings of the property to prospective tenants. These showing methods have shown to be the most effective means benefitting all parties.

4. **Client Market Updates**: Every Monday, our clients receive an update on the current status of marketing for their home. This includes internet traffic, in person showings, and applications.  We also offer pricing recommendations putting our best advice forward with the effort of getting your home rented to best possible tenant in quick order.

5. **Lease Negotiation and Execution**: Preparing our custom lease agreement that is designed to protect the owner’s interests for an approved applicant is worth the leasing fee by itself. That document is the tool that turns a marginal tenant into a great tenant. Executing that lease agreement with an approved applicant can take time and effort to field questions and make modifications.  In addition, funds must be collected involving bank wires and solid accounting practices, all handled in a professional manner with good customer communication procedures and service.  The leasing fee covers the professional handling of these negotiations and the finalization of the contract, ensuring all parties are clear about their obligations.

6. **Move-in Coordination**: The fee also supports the administrative and operational tasks associated with preparing for a new tenant, including scheduling move-ins, preparing the property for occupancy, and conducting initial inspections. This ensures that tenants are moving into a property that meets all agreed-upon standards.

**Conclusion** By charging a leasing fee, we ensure that the process of finding and placing a tenant is handled professionally and thoroughly, reflecting the high standards of our property management services. This fee enables us to continue providing exceptional service and support to our tenants and property owners alike.