In New York City, I used an agent to rent my 1BR apartment that the market wouldn't support selling at the time. In this market, it is typical to charge a renter one-month rent as a broker's fee. I split it with the renter, so yes it cost me a few dollars but I was all but assured good tenants... the broker ran a credit report, they submitted some financials (they were Belgian with no US-based credit, in the US for a 2-3 year assignment) and everything checked out. It has been almost two years so far and they have been great.
Now, I have a broker horror story, too.... my own experience as a renter.
Upon deciding to leave that 1BR (with a 14-month old and a second on the way soon) we set out in the neighborhood looking for units. We found one that was suitable, offered through a broker. When we decided to take it, we negotiated the rent right there with the broker and landlord in the unit. The next day, the landlord "increased" the price by several hundred dollars... the broker claimed we actually misheard them the day before. We settled on a figure in the middle... we needed the space and the clock was running out.
We paid the one-month fee... outrageous, but common. They then demanded an additional $50 for a credit check. Hmmm sounds expensive, but we've come this far already. We then asked them for a copy of that credit check... they claimed "oh, um, that's just a processing fee."
We find out later that that specific broker (a small chain in NYC called "Rapid Realty") often does no credit checks and no vetting of prospective tenants. They just take tenant's money and possibly place terrible people into landlords' properties... no one except the broker wins. How do I know? We lived in that apartment for two years and the landlord's office staff told us horror stories of some tenants that were supposedly "vetted" by the broker but turned out to be BS.
So, brokers can go both ways, from both the landlord's and renter's perspectives.
Always remember that as the landlord, the responsibility for vetting a tenant is yours. An RE or broker is only going to bring prospective tenants to you and may run credit checks, but they are not really looking far beyond the credit score. A property manager should do more than that, but the final decision is the landlord's. I've used an RE agent several times and had good experiences. But, I also had to keep telling myself that they are trying to move the property and will not have an interest after the lease is signed and new tenant moved in. My suggestions about prospective tenants are to::
- Look them up on Facebook and social media places like Twitter. Even the kids.
- Look over the rental application closely. If there are inconsistencies or omissions, ask for clarification
- Look them up in the court system, especially check for previous unlawful detainer cases. If they have any open judgements against them, move on. You can check for criminal and even traffic violations too.
- If they used to own a home, check their tax payment history on the tax assessor website.
- Check out the place where they work. Is it an established business with a good reputation? If they own their own business, check it out thoroughly too. If they change jobs often, then they may not stay in your house long.
All of this can be done for free and online.