The authors did not recognize the source of the U.S. commission data. See NAR, Public Comment 208, at 15-16; Delcoure & Miller, supra, at 15. 173. Approximately half of the public comments submitted to the Agencies in reaction to their ask for public comments were some variation of a type letter that NAR composed, posted on its site, and encouraged its 1.
This letter praised the competitive nature of the real estate industry. Commenters utilizing this form highlighted local competition between private agents as an impressive example of extensive competition to which the rest of the economy must aim - how to become a real estate developer. In addition, they claimed that the 10s of countless brokerages, more than 2 million certified genuine estate experts, and various service designs throughout the nation offer consumers with a good deal of option.
realtor.org/law_and_policy/mls/ild/regulator_letters. html) for more details on the association's directions and recommended content. 174. NAR, Public Remark 208, at 1 (remark). 175. Id. at 2. 176. Blann, Public Remark 250, at 1. But see NAR 2006 STUDY, supra note 4, at 74 (69% of sellers gotten in touch with only one representative; 74% of sellers discovered their representative through either a referral or a previous relationship with the agent).
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Reppert, Public Comment 294, at 1. See likewise Tradii, Public Remark 340, at 1; Wharton, Public Remark 179, at 1. 178. See, e. g., Earman, Public Remark 73, at 1-2 (average commission is "well under 6%"); Giorgianni, Public Remark 200, at 1 (" My typical commission has actually dropped over the last 10 years from 3% to about 2.
179. Paulsen, Public Comment 364, at 1. Several panelists and commenters cited Real Patterns estimates 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 range of choices readily available to purchasers and sellers from complete representatives to very minimal service agents with a wide variety of charge structures."); Large, Public Comment 241, at 1 (" our average commission per deal side has dropped 13% this year compared to in 2015 as an outcome of competition from discount brokerage business models operating 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 home sales cost that the broker maintains as a commission, and commission "fees" are the overall dollar amount paid by customers genuine estate brokerage services.
185. Weicher, supra note 167, at 121. how much does it cost to get a real estate license. 186. NAR a sensible source of commission data, given its size and access to MLS information through its local associations does not study or report commission rates. A NAR economic http://miloktlp323.tearosediner.net/the-of-what-do-real-estate-agents-do expert discussed at the workshop that any average commission rate reported by a prominent entity such as NAR might be utilized by market participants wesley sell as a centerpiece for collusion on commission rates.
at 225-26. See likewise NAR, Public Remark 208, at 12 (comment) (" [NAR] does not conduct research on commission rates out of concerns that the research study outcomes have the result of setting a 'centerpiece' for specialists to set their commissions."). 187. Weicher, supra note 167, at 124. Weicher's calculations use average home sales rates, not average home sales costs.
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Id. 189. See Hearing, supra note 1, at 5 (testimony of David G. Wood), 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, available at http://www. sec.gov/ Archives/edgar/data/ 1355001/000095012307003335/e31090e10vk. htm #tocpage. 192. A comprehensive evaluation of the empirical research carried out in the property brokerage industry is beyond the scope of this Report.
Turnbull, Trends in Property Research Study, 1988-2001: What's Hot and What's Not, 29 JOURNAL OF REAL ESTATE FINANCE AND ECONOMICS 47 (2004 ); John D. Benjamin, G. Donald Jud & G. Stacy Sirmans, What Do We Understand About Real Estate Brokerage?, 20 JOURNAL OF REAL ESTATE RESEARCH 5 (2000 ). 193. 1983 FTC PERSONNEL 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 Prices of House Brokerage Providers, 10 JOURNAL OF THE AMERICAN REALTY 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 price of the house lowers the commission rate by about 0. 5 percentage points"). The average prices of an existing home in 1980 was $72,800. See U.S. Department of Real Estate and Urban Development, U.S.
2006) [hereinafter "HUD REPORT"], available at http://www. huduser.org/periodicals/ushmc/fall06/USHMC_Q306. pdf. At that cost, the research study's analytical results anticipate a matching commission rate of 6. 25%, resulting in a commission cost of $4,550. get more info A home costing $100,000 more, or $172,000, would pay a commission rate of 5. 73%, for a commission charge of $9,901.
Carney, supra note 198, at 339 (leaving out five areas with inadequate observations for new houses, in 59 percent of the staying market locations the mean commission rate paid was statistically significantly higher for existing houses 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 considerable at the one percent level for each of the formulas checked. See id. at 83. However, Weicher keeps in mind that the magnitude of the sales price impact appears to be little. See Weicher, supra note 167, at 121 (" Goolsby and Childs discover 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. Because the authors just observed the cooperative commission rate, they note that their conclusion rests on the presumption 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 Rates under Competition, 41 JOURNAL OF URBAN ECONOMICS 102 (1997 ). This research study apparently includes the data and pertinent findings of an earlier study carried out 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 analyzing how the agreement commission rate was impacted by various market conditions and housing variables. As the authors explain, the commission rate caught in the sample is "the contract rate and for that reason does not show any modification or changes that may be renegotiated between your house seller and the representative at the time of sale." Id.
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213. While it is not possible to measure the relative inflexibility based on details reported by the authors, additional details can be utilized to compute a rough approximation. Weicher, supra note 166, at 121, reports that Sirmans and Turnbull computed a typical contract commission rate of 5. 8% in Baton Rouge over the duration 1985-1987.