As a Realtor, I’m increasingly asked about the new trend of “apartment locator” companies. What’s all the hoopla about?

An apartment finder or locator does exactly that: they scout available rental housing and provide a list of properties that meet their specifications. Typically the services range from simply providing a list of available units, all the way up through touring properties on behalf of out-of-town clients and advising them on where to lease. Often these companies claim to have exclusive listings not available elsewhere, and charge a high fee to find renters the “best deal” on an apartment.

Apartment finders are not to be confused with leasing agents, who list a rental property for rent, show it to prospective renters, collects rental applications and screens tenants.


Are They Legal?

Many states require a real estate license to show apartments or list apartments for a fee. But there is little regulation for companies finding a home for renter clients.

In New Jersey’s publication “Tenants’ Rights in New Jersey” (page 17 to be exact), there is a loud warning against using rental referral agencies, citing that many of these companies showcase old listings in their marketing – apartments that are not actually available for rent. New Jersey’s law N.J.A.C 11:5-1:32 strictly regulates these types of services.

New Hampshire is very direct in its requirements for Rental Referral Agencies in their Consumer Sourcebook. It states that the agency cannot charge more than $10 for services unless a property is obtained by their client through direct assistance of the company.

Pennsylvania requires licensure of rental listing referral agents. Tennessee follows par with the requirement that to be a rental location agent, one must be licensed as a real estate agent or broker.

But most states do not regulate rental referral agencies or apartment locator services.

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A Common Con & How It Works

The adage “if it sounds too good to be true” rings all too true on this rental rip-off. Less scrupulous apartment finder services create a captivating advertisement for the rental of your dreams at a ridiculously cheap rate. Often, potential renters discover the apartment listings are not private placements but publicly listed apartments for rent. And once they receive their paid “private” list from these apartment location firms, more often than not, the best rentals turn out to be already rented and unavailable. Some apartment finder services guarantee your money back if they fail to find you a home within ninety days. All well and good, but most renters have less than ninety-days to work with. Even worse, consumer report websites are full of customer complaints that the services refused to deliver the promised refund.  

Scam or Not Scam? 

Not all apartment finder services are frauds. Some are legitimate services for out-of-town clients who are moving to a new city and need help finding appropriate housing. Here are some clues whether a service is a scammer or not:
  1. They are vague about fees.
  2. They guarantee to find an apartment for you regardless of income, credit, etc.
  3. They claim extraordinarily low rents compared to comparable homes in the neighborhood.
  4. They flood Craigslist, Facebook groups, and anywhere else they can find free advertising.
*Craigslist tip: Generally, you will see no picture with these rentals and you will also notice that the same phone number is appearing when clicking on the “reply to” links.  

How Can Renters Protect Themselves?

Just as if you were purchasing a home, get your credit in order before searching. If you have blemishes on your credit report, be honest about them. Consider lining up a co-signor, if you have any of the following:
  1. Credit issues
  2. Low income compared to the rent
  3. A short employment history, perhaps new to your job
  4. Young adult, newly entering the job market who never rented before
Another option is offering to put up extra security deposit or pay extra months up-front (make sure this is legal in your state). You can also offer to automate your rent payments, whether through ACH deductions or SparkRental’s soon to be launched RentDeduct™ program. Not all rental referral agencies are out to scam. There are good, reputable services, who will be upfront about their fees. Do your homework! Consider working with a Realtor® from an established real estate office in your area. Have firsthand experience with an apartment finder service? Share your thoughts and experiences!    

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