The authors did not identify the source of the U.S. commission information. See NAR, Public Remark 208, at 15-16; Delcoure & Miller, supra, at 15. 173. Roughly half of the general public remarks sent to the Agencies in action to their demand for public comments were some variation of a kind letter that NAR composed, posted on its site, and encouraged its 1.
This letter applauded the competitive nature of the realty industry. Commenters using this form highlighted local competitors between private representatives as an impressive example of rigorous competition to which the rest of the economy must strive - what is cap rate real estate. In addition, they declared that the 10s of countless brokerages, more than two million licensed real estate professionals, and various service designs across the country provide customers with an excellent deal of choice.
realtor.org/law_and_policy/mls/ild/regulator_letters. html) for more information on the association's guidelines and suggested material. 174. NAR, Public Comment 208, at 1 (comment). 175. Id. at 2. 176. Blann, Public Remark 250, at 1. However see NAR 2006 STUDY, supra note 4, at 74 (69% of sellers gotten in touch with just one representative; 74% of sellers found their agent through either a referral or a previous relationship with the representative).
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Reppert, Public Remark 294, at 1. See also Tradii, Public Remark 340, at 1; Wharton, Public Remark 179, at 1. 178. See, e. g., Earman, Public Comment 73, at 1-2 (average commission is "well under 6%"); Giorgianni, Public Comment 200, at 1 (" My average commission has actually dropped over the last ten years from 3% to about 2.
179. Paulsen, Public Remark 364, at 1. Several panelists and commenters pointed out Real Trends estimates of commission rates. See, e. g., Kunz, Tr. at 81-82; Lewis, Tr. at 172; NAR, Public Remark 208, at 12 (remark). 180. Lord, Public Remark 254, at 1. 181. Id. at 1. 182. Dwyer, Public Comment 55, at 1.
There are a range of choices offered to buyers and sellers from full service representatives to Browse this site extremely restricted service representatives with a variety of charge structures."); Big, Public Comment 241, at 1 (" our typical commission per transaction side has actually dropped 13% this year compared to in 2015 as a result of competition from discount rate brokerage organization designs running in our market").
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GAO REPORT, supra note 3, at 12. 184. As gone over in Chapter I of this Report, the commission "rate" is the portion of the home prices that the broker maintains as a commission, and commission "charges" are the total dollar quantity paid by consumers for real estate brokerage services.
185. Weicher, supra note 167, at 121. how much do real estate agents make a year. 186. NAR a rational 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 expert described at the workshop that any typical commission rate reported by a popular entity such as NAR could be utilized by industry individuals as a focal point for collusion on commission rates.
at 225-26. See likewise NAR, Public Remark 208, at 12 (comment) (" [NAR] does not carry out research on commission rates out of concerns that the research outcomes have the effect of setting a 'centerpiece' for specialists to set their commissions."). 187. Weicher, supra note 167, at 124. Weicher's calculations utilize average home sales rates, not mean home list prices.
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Id. 189. See Hearing, supra note 1, at 5 (testament of David G. Wood), offered 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. A thorough evaluation of the empirical research study conducted in the genuine estate brokerage industry is beyond the scope of this Report.
Turnbull, Trends in Property 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 Realty Brokerage?, 20 JOURNAL OF REAL ESTATE RESEARCH STUDY 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, Costs and Pricing of House Brokerage Services, 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 cost of the house reduces 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"], offered at http://www. huduser.org/periodicals/ushmc/fall06/USHMC_Q306. pdf. At that price, the study's statistical results forecast a matching commission rate of 6. 25%, resulting in a commission charge 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 (excluding five areas with insufficient observations for brand-new homes, in 59 percent of the staying market areas the mean commission rate paid was statistically considerably greater for existing houses than for new homes). 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. Nevertheless, Weicher notes that the magnitude of the prices result seems little. See Weicher, supra note 167, at 121 (" Goolsby and Childs discover that the commission rate declines about 0.
11 percentage points for each $10,000 increase in house cost, e. g., from 5. 90 percent to 5. 84 or 5. 79 percent."). 208. Goolsby & Childs, supra note 205, at 85. Because the authors only observed the cooperative commission rate, they keep in mind that their conclusion rests on the presumption that the cooperative split is a fixed share of the total listing commission.
See id. at 81 n. 1. 209. See C.F. Sirmans & Geoffrey K. Turnbull, Brokerage Pricing under Competition, 41 JOURNAL OF URBAN ECONOMICS 102 (1997 ). This research study apparently includes the information and appropriate findings of an earlier research 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 performed regressions evaluating how the contract commission rate was affected by various market conditions and housing variables. As the authors describe, the commission rate caught in the sample is "the contract rate and for that reason does not reflect any change Great post to read or modifications that might be renegotiated between your house seller and the representative at the time of sale." Id.
213. While it is not possible to measure the relative inflexibility based on information reported by the authors, supplemental details can be utilized to compute a rough approximation. Weicher, supra note 166, at 121, reports that Sirmans and Turnbull computed an average agreement commission rate of 5. 8% in Baton Rouge over the period 1985-1987.