The authors did not determine the source of the U.S. commission data. See NAR, Public Comment 208, at 15-16; Delcoure & Miller, supra, at 15. 173. Roughly half of the general public remarks sent to the Agencies in reaction to their demand for public remarks were some variation of a type letter that NAR made up, published on its site, and motivated its 1.
This letter applauded the competitive nature of the property industry. Commenters using this kind highlighted regional competitors between private agents as an exceptional example of rigorous competitors to which the rest of the economy need to aspire - how to become real estate agent. In addition, they declared that the 10s of thousands of brokerages, more than two million certified property professionals, and numerous company designs throughout the country provide consumers with a good deal of choice.
realtor.org/law_and_policy/mls/ild/regulator_letters. html) for more details on the association's guidelines and suggested content. 174. NAR, Public Comment 208, at 1 (comment). 175. Id. at 2. 176. Blann, Public Remark 250, at 1. But see NAR 2006 SURVEY, supra note 4, at 74 (69% of sellers called only one representative; 74% of sellers found their representative through either a referral or a prior relationship with the representative).
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Reppert, Public Remark 294, at 1. See likewise Tradii, Public Remark 340, at 1; Wharton, Public Comment 179, at 1. 178. See, e. g., Earman, Public Remark 73, at 1-2 (typical commission is "well under 6%"); Giorgianni, Public Remark 200, at 1 (" My average commission has dropped over the last ten years from 3% to about 2.
179. Paulsen, Public Comment 364, at 1. A number of panelists and commenters mentioned Real Patterns price quotes of commission rates. See, e. g., Kunz, Tr. at 81-82; Lewis, Tr. at 172; NAR, Public Comment 208, at 12 (comment). 180. Lord, Public Remark 254, at 1. 181. Id. at 1. 182. Dwyer, Public Remark 55, at 1.
There are a variety of alternatives offered to buyers and sellers from complete service representatives to extremely restricted service representatives with a wide array of cost structures."); Big, Public Comment 241, at 1 (" our typical commission per deal side has actually dropped 13% this year compared to in 2015 as a result of competition from discount brokerage organization models running in our market").
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GAO REPORT, supra note 3, at 12. 184. As talked about in Chapter I of this Report, the commission "rate" is the percentage of the house sales cost that the broker maintains as a commission, and commission "charges" are the total dollar quantity paid by consumers genuine estate brokerage services.
185. Weicher, supra note 167, at 121. how to buy commercial real estate. 186. NAR a sensible source of commission data, given its size and access to MLS information through its local associations dreams timeshare does not study or report commission rates. A NAR financial expert described at the workshop that any average commission rate reported by a prominent entity such as NAR could be used by market participants as a focal point for collusion on commission rates.
at 225-26. See likewise NAR, Public Comment 208, at 12 (comment) (" [NAR] does not conduct research on commission rates out of issues that the research study outcomes have the effect of setting a 'centerpiece' for specialists to set their commissions."). 187. Weicher, supra note 167, at 124. Weicher's estimations use average house list prices, not average house list prices.
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Id. 189. See Hearing, supra note 1, at 5 (statement of David G. Wood), readily available at http://financialservices. house.gov/ media/pdf/072506dgw. pdf. 190. Id. at 6. 191. See Realogy Corporation 10-K for ending Dec. 31, 2006, offered at http://www. sec.gov/ Archives/edgar/data/ 1355001/000095012307003335/e31090e10vk. htm #tocpage. 192. An extensive review of the empirical research performed in the realty brokerage industry is beyond the scope of this Report.
Turnbull, Trends in Real Estate Research, 1988-2001: What's Hot and What's Not, 29 JOURNAL OF REALTY FINANCING AND ECONOMICS 47 (2004 ); John D. Benjamin, G. Donald Jud & G. Stacy Sirmans, What Do We Know About Real Estate Brokerage?, 20 JOURNAL OF PROPERTY RESEARCH 5 (2000 ). 193. 1983 FTC STAFF REPORT, supra note 9, at 45.
Id. 195. Id. at 46 (49. 6% of sample paid 6%, while 27. 9% paid 7%). 196. Id. at 48. 197. Id. at 52. 198. See Michael Carney, Expenses and Pricing of House Brokerage Providers, 10 JOURNAL OF THE AMERICAN PROPERTY AND URBAN ECONOMICS ASSOCIATION 331 (1982 ). 199. Id.
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200. Id. at 336. 201. Id. at 348 (" [O] n average, a $100,000 increase in the cost of the home minimizes the commission rate by about 0. 5 percentage points"). The typical prices of an existing house in 1980 was $72,800. See U.S. Department of Real Estate and Urban Advancement, U.S.
2006) [hereinafter "HUD REPORT"], available at http://www. huduser.org/periodicals/ushmc/fall06/USHMC_Q306. pdf. At that cost, the study's statistical outcomes anticipate a matching commission rate of 6. 25%, causing a commission fee of $4,550. A house offering for $100,000 more, or $172,000, would pay a commission rate of 5. 73%, for a commission cost of $9,901.
Carney, supra note 198, at 339 (leaving out 5 areas with inadequate observations for brand-new houses, in 59 percent of the remaining market areas the mean commission rate paid was statistically significantly greater for existing homes than for brand-new houses). 203. Id. 204. Id. at 248. 205. See William C. Goolsby & Barbara J.
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206. Id. at 84. 207. This finding was substantial at the one percent level for each of the formulas tested. See id. at 83. Nevertheless, Weicher keeps in mind that the magnitude of the prices impact seems small. See Weicher, supra note 167, at 121 (" Goolsby and Childs find that the commission rate declines about 0.
11 portion points for each $10,000 increase in home price, e. g., from 5. 90 percent to 5. 84 or 5. 79 percent."). 208. Goolsby & Childs, supra note 205, at 85. Considering that the authors only observed the cooperative Click here for more info commission rate, they note that their conclusion rests on the assumption that the cooperative split is a fixed share of the overall listing commission.
See id. at 81 n. 1. 209. See C.F. Sirmans & Geoffrey K. Turnbull, Brokerage Pricing under Competitors, 41 JOURNAL OF URBAN ECONOMICS are time shares a good investment 102 (1997 ). This research study obviously integrates the data and appropriate findings of an earlier research study performed by the authors. See C.F. Sirmans, Geoffrey K. Turnbull & John D.
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210. Sirmans & Turnbull, supra note 209, at 111. 211. Id. at 113-115. 212. Id. at 113-14. The authors carried out regressions examining how the contract commission rate was impacted by numerous market conditions and housing variables. As the authors describe, the commission rate captured in the sample is "the contract rate and for that reason does not reflect any change or modifications that may be renegotiated between the home seller and the agent at the time of sale." Id.
213. While it is not possible to measure the relative inflexibility based upon details reported by the authors, additional information can be used to compute a rough approximation. Weicher, supra note 166, at 121, reports that Sirmans and Turnbull calculated a typical agreement commission rate of 5. 8% in Baton Rouge over the duration 1985-1987.