A New Web Site for Rental Apartments, Hold the Fees

By KAYVON AFSHARI, Special to the Sun | October 25, 2007

In the latest move by real estate companies to reach customers by reaching online, the owners of the brokerage firm and management company City Wide Apartments are launching a Web site to list their 2,000 rental apartments fee-free. The site, UrbanSherpaNY.com, is set to go live Friday.

"The market has kept information in the hands of brokers and hasn't let it be given to users," a co-founder of Urban Sherpa, Michael Jacobs, said. "I felt like it was time to break down these barriers and make it easy for users to find an apartment themselves." Peter Hungerford is the other co-founder.

Urban Sherpa could take customers away from the brokerage arm of City Wide Apartments, as tenants may decide to avoid fees and rent a unit online rather than visit a broker, where they will have to pay a rental fee that can run as much as 15% of a month's rent, Mr. Jacobs said.

Regardless of fees, some tenants will continue to rely on brokers. "There are people who need the service just because the opportunity cost doesn't make sense for them to put in the footwork; there are also people who are new to the city and want to talk to a broker as well," Mr. Jacobs said.

"There are a lot of Web sites out there, but brokers probably have the best knowledge of what's available in the city," the president of the Real Estate Board of New York, Steven Spinola, said. "I would encourage people to use brokers because it's a complicated process."

A growing number of Web sites boast fee-free rental apartments, including Craig's List, although many such listings do come with a hidden brokerage fees attached. Urban Sherpa will also feature Google Maps to indicate the location of the apartment, landlord and building information, and photographs when available. Other available tools include historical and current market statistics, neighborhood information, and a downloadable application for a lease. The development of the site took about a year and cost "several hundred thousand dollars," according to Mr. Jacobs.