How Are Rental Agency Fees Calculated?
Most cities still adhere to the original regulatory standards, while many others have liberalized the market and now allow self-regulated pricing (meaning there’s no fixed standard—you can charge whatever the two signing parties agree on).
Standards in effect as of 2014:
Brokerage fees for residential rentals amount to half a month’s to one month’s rent. For home purchases, brokerage fees are 2.5% of the total sale price, capped at 3% and floored at 0.5%.
Unless otherwise specified, brokerage fees are split equally between the two parties to the contract.
In practice, even with a maximum cap in place, agencies would routinely exceed the 3% limit by inventing additional charge categories—such as a 2.5% information service fee, a 0.5% document preparation fee, a 0.4% mortgage brokerage commission, and a 0.4% transfer-of-title commission.
