Nothing is free, and that’s especially true of real estate. So true, that even the word free should set off alarm bells in your head.
After the mess I had experienced with bad real estate agents (see Bullying Realtors and Do I Need A Real Estate Agent?) I found an agent on referral from a coworker.
The agent worked for ApartmentPeople.com, “Chicago’s largest FREE apartment finding service” as it’s dubbed on their website. These agents will show you as many apartments as you want with no fees and they have access to thousands of listings in the city (the “no fees” part, you will later read, is not true).
The realtor we worked with there was great. He worked within our parameters and contacted us daily with new listings. He even met us at 8PM one night when he heard a place was available he thought we’d love. A week or two later we found our apartment.
We loved the place and decided to apply before someone else did so our agent rushed us to the ApartmentPeople office. Once there we were separated from him and given application documents.
The application forms were pretty minimal, and the company needed proof of employment forms from my roommate and I before the application would be processed.
Next, we were asked to pay a, one-time, nonrefundable, $200 application fee to the company. It sounded familiar, but I asked about what the fee was for. The fee supposedly replaced all of the other application fees you would have to pay at other realty groups (which we did come across). ApartmentPeople’s reasoning was if you wanted to apply to five apartments at other companies it might cost you $75 a pop, so the $200 flat fee was cheaper than paying as you go. We wrote a check and forked over the cash.
Next, the man whom I had never met before asked for a month’s rent from my roommate and me. He said we had to put down the money to prove we were serious, and if we didn’t get the apartment it would be returned.
I asked him if he meant this was earnest money (I do work for ThinkGlink afterall…) and he said, “Yes, it’s like a good faith deposit.”
“And you won’t cash it” I asked. “No,” he said.
There I sat at the desk, across from me someone just took $700 of my money in ten minutes. I had no guarantee that I would get the apartment, no lease has been signed, I hadn’t met the management company that owned the apartment and I had the sneaking suspicion I’d been took.
The money was cashed three days later; at least 36 hours before we were told we got the apartment.
When I applied to college, you applied to a few schools, got accepted to a couple and then chose which one to attend. I thought it was the same with apartments. Apparently not, according to ApartmentPeople. For them, it’s more like early admission: if you get in, you’re going.
Have you ever felt taken or tricked by a real estate company? What did you do?
Per usual, great article Claire. I have had my fair share of times when I felt taken advantage of by a real estate agent. Recently, my future roommate and I were looking for apartments, and found one that we absolutely loved (through a real estate agent). He kept informing us that there were only a few other people looking at the apartment, and one person had applied but they had already been rejected. He said he was good friends with the listing agent (because that was an entirely separate entity) and that he trusted her and that he saw no reason we would not get the apartment. We were trying to move out quickly, so he was trying to rush the signing of the lease for our sake so Tuesday before Thanksgiving, we put in our application thinking we could sign the lease Monday (mainly because of the holiday). The listing agent had told him there were no other applications at the time. Sunday night, however, we get an email from our agent, after not hearing from anybody really for a few days, saying that we did not get the apartment and they already had somebody else sign the lease! Now, in my opinion, that means somebody was lying to us – there is NO way they had somebody come in, view the apartment, apply, and sign the lease over the 4 days of Thanksgiving weekend. I was incredibly disappointed, not only because we lost our “dream” apartment, but also because the process was approached in such an unprofessional manner, in my opinion. What do you think about this? Do you have any advice for me so that next time I can prevent something like this from happening?
Finding an apartment can be so frustrating! I recently had a terrible experience locating an apartment in a small city, and when I finally did I was hit with realty fees. I wish there was a universal system for finding and paying for apartments. At least I got some good advice from Claire.
Good to know about these hidden costs. Sounds like the first months rent and a couple hundred extra dollars for the “application” fee are needed to even look at apartments.