4 reasons you should not use a real estate agent to rent a house

Written on October 10, 2018 by , updated on February 1, 2019

Don't work with an agentCall me crazy, but I get a little annoyed when real estate agents call me about a rental listing.

Why?

Here’s a typical conversation:

Me: Hello.

Agent: Hello, this is John. I’m a real estate agent with AAA Real Estate. Is the home for rent at 123 Main Street still available?

Me: Yes it is.

Agent: Well, it’s not in the MLS.

Me: A silent pause

Agent: Anyway, my client requested to see it. And I want to show it now.

Me: I’m having an open house Saturday at 3 p.m., and your client is welcome to come.

Agent: No, that doesn’t work. My client wants to see it sooner. When can I show it?

Me: You can’t show it at all. Tenants are currently living there, and I’ve made arrangements to have an open house Saturday at 3. Please invite your client to come then.

Agent: Do you pay an agent commission?

Me: No.

Agent: Thank you. Goodbye.

And I never hear from this agent or their client again.

Here are four reasons why you shouldn’t use an agent when you want to rent a home:

1. Real estate agents use only the MLS

If you ask a real estate agent to find you a rental property, they will most likely look only on the Multiple Listing Service (MLS), which only agents can access.

In fact, I asked an agent the other day how he finds rental properties for clients. He said he finds them through the MLS.

Here’s the problem of looking only at the MLS for rental properties: Since only agents can list properties through the MLS, real estate agents are missing all the properties landlords like me advertise. And if your real estate agent is missing out on properties listed by non-agents, you are too.

You are better off, when looking for a rental property, to look at these sites:

  • Zillow
  • HotPads
  • Trulia
  • Realtor.com
  • Craigslist

You’ll probably find lots of rental homes on those sites, more than what your real estate agent will find by using only the MLS. Of course, you can always find properties and send them to your agent, but then why not just contact the person on the listing yourself?

Related: The Only 3 Websites You Need to List a Rental Property

2. Agents expect to be paid

Real estate agents mainly work with clients who are buying and selling homes. In those cases, the seller typically pays the real estate agent by giving the agent a percentage of the home’s selling price.

So the expectations for most real estate agents who are helping a client trying to rent is that the landlord will pay the agent for finding a tenant, typically one month’s rent (similar to getting a cut of a home’s sale).

But in a rental market where most applicants find rental properties without an agent, landlords have no reason to pay an agent. In other words, if I have five applicants for a property, four who represent themselves and one who comes with an agent who expects me to pay them a month’s rent, guess who I’m not renting to?

If you use an agent in a market where most people are finding properties on their own, you will likely be taking yourself out of the running to land a rental property.

3. Agents don’t really want to work with you

I’ve always suspected that statement to be true, and now I have a couple of stories to back this up. I think this probably represents what many agents think.

A real estate agent called me the other day on behalf of her client, and when I told her I don’t pay an agent commission, she let me know that she doesn’t know what to tell renters who call her for help. She wants to help them find a home, but if the landlord won’t pay her commission, she is not interested in working for free.

Another agent told me that he usually doesn’t work with clients looking to rent but that he will sometimes do so to help a friend out.

Since it’s not the norm for homebuyers to pay an agent (home sellers typically do), renters and agents expect the landlord or property owner to pay the agent just as home sellers (owners) do. But while most home sellers use and pay real estate agents, most small-time property owners do not use agents to get their property rented, so they have no interest in paying your agent.

If you really want to use a real estate agent to help you find a rental home, you might want to consider paying your agent yourself.

4. Agents often do more harm than good

Landlords who know their business find out what market rents are for similar rentals in their area. (I use the Cozy rent estimate tool in addition to keeping up with rent prices in my area.)

But when a real estate agent comes along, they are usually loaded for bear and ready to negotiate rent price—it’s just part of their job, like offering less than asking price for a home to buy. Although that’s standard practice for the home buying process, it’s not typical for landlords like me who plan to rent the property for the price listed.

Just as I don’t pay agents a commission, I am not interested in taking less than my advertised rate for my rental properties. If you’re paying an agent for their great negotiating skills, your money is largely being wasted when it comes to renting versus buying a property.

When real estate agents are helpful

There’s a place for real estate agents and rental properties. In big cities like San Francisco or New York where it’s difficult to find housing, you might benefit from using an agent. Or if you are relocating and know nothing about the area, you might need help from an agent who can show you around. Other than that, you are typically better off to cut out the middleman and find a rental house yourself.

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9 CommentsLeave a Comment

  • Bridget Beck

    Your statements are not all entirely true. In the age of info at everyone’s fingertips. Agents AND their clients peruse many different sites to find their home. Having an agent that’s skilled in tenants rights is important. Many tenants do not know the conniving things landlords do and what’s legal in each state. As a landlord and a real estate agent I have experience on both sides. Typically where I’m at the commission is $50-$150 to bring a qualified renter. Many landlords have no problem with that. Facts and agents can be different in all states. Do a little more research and include the Benefit that landlords get. A good tenant, do not have to schedule showings yourself. If u don’t open options to agents your limiting your options.

  • Al Rivera

    Great info, Bridget.

    As a licensed agent and landlord myself, what you are saying is true. A good agent can help a tenant find a great deal and identify a slumlord. Too many tenants get burned by not knowing their rights when renting from a bad landlord/cheap landlord.

  • Bradford Schmeisser

    I used an agent this time because of too many other family matters. However we signed things we
    should’nt have in the contract lease. Now its hard to get out of it. Its a horrible lease, with even a threat in it.

    If i cancel, i still have to pay 10 percent of total rent if tenant
    if same tenant stays there.

  • Kevin Jamison

    This has Cozy written all over it. Often times, writers are paid by corporations to write articles in their favor and recommend their services.

    You cannot put all real estate agents in the same box. Our team works with residential and commercial landlords and tenants. We have been very successful with finding and identifying qualified tenants for our clients. In fact, the majority of our landlord and tenant clients are repeat clients.

    Being a landlord is a business and business owners must do their due diligence. They also have the right to except, reject or negotiate any contract.

    • Laura Agadoni

      Hi Kevin,
      Thanks for the comment! I just want to point out that this point was purely my idea, and it’s about my personal experience with real estate agents whenever I list a rental property. I have nothing against agents! And I use real estate agents for buying and selling. But in my years as a landlord, I’ve only had the experiences I outlined in my post. I did point out that in some cases, agents can be useful. But not for my business, a small-time landlord who rents single-family homes.

      • Linda

        Why would a renter not use an agent?
        Landlords are only looking for themselves.
        Renters need to know they are paying the correct price. Renters need to understand the terms and lease they are signing. Real estate agents work hard and yes they should be paid for their service.

  • Joseph Testa

    This article is a sin

  • John

    Two agents have inquired about my listing and both conversations ended swiftly when I told them I wouldn’t pay commissions. If I wanted to lose one month’s rent, I would’ve hired my own listing agent. Their can pick up the phone themselves rather than have someone else make easy money off me.

    If one month’s rent is valued at $2000, I’m losing $167 per month to commissions within a 12 month lease. I could simply list the house for $1833 without an agent and receive the same net rent, but I don’t need to list that low. Instead, I list at $1950 and get droves of inquiries because the rent is still below market value.

    • Laura Agadoni

      Hi John,
      That has been my experience as well. And while not all agents refuse to show homes to their clients if we landlords won’t pay a commission, some do refuse. If the renter really wants to use an agent, the renter should be prepared to pay the agent if the landlord won’t. If not, they probably won’t be seeing all the rental options available to them. Bottom line: if there is no commission on the deal for the agent, there is no incentive for them to show the property. And that’s the reason I wrote this, to help renters out, not to bash agents!

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