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 remarks sent to the Agencies in action to their request for public remarks were some variation of a kind letter that NAR made up, published on its site, and encouraged its 1.
This letter praised the competitive nature of the property industry. Commenters utilizing this type highlighted regional competitors between private agents as an exceptional example of strenuous competition to which the rest of the economy should strive - what are cc&rs in real estate. In addition, they claimed that the 10s of countless brokerages, more than two million licensed genuine estate professionals, and various service models across the country provide consumers with a fantastic deal of choice.
realtor.org/law_and_policy/mls/ild/regulator_letters. html) for more information on the association's instructions 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 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 Comment 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 typical commission has actually dropped over the last 10 years from 3% to about 2.
179. Paulsen, Public Comment 364, at 1. Numerous panelists and commenters pointed out Real Trends quotes of commission rates. See, e. g., Kunz, Tr. at 81-82; Lewis, Tr. at 172; NAR, Public Remark 208, at 12 (comment). 180. Lord, Public Comment 254, at 1. 181. Id. at 1. 182. Dwyer, Public Comment 55, at 1.
There are a variety of choices offered to buyers and sellers from complete service agents to really limited service representatives with a wide array of charge structures."); Big, Public Remark 241, at 1 (" our average commission per transaction side has actually dropped 13% this year compared to in 2015 as a result of competition from discount brokerage organization 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 portion of the home sales cost that the broker keeps as a commission, and commission "charges" are the overall dollar amount paid by consumers for real estate brokerage services.
185. Weicher, supra note 167, at 121. how to become a real estate agent in illinois. 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 financial expert described at the workshop that any average commission rate reported by a popular entity such as NAR could be utilized by industry individuals as a centerpiece for collusion on commission rates.
at 225-26. See likewise NAR, Public Comment 208, at 12 (remark) (" [NAR] does not http://fernandomqbr016.fotosdefrases.com/how-to-become-a-real-estate-agent-in-nj-for-beginners conduct research on commission rates out of concerns that the research study outcomes have the result of setting a 'focal point' for specialists to set their commissions."). 187. Weicher, supra note 167, at 124. Weicher's calculations use typical house sales costs, not typical home prices.
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Id. 189. See Hearing, supra note 1, at 5 (testament 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 financial year ending Dec. 31, 2006, offered 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 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 Property Brokerage?, 20 JOURNAL OF PROPERTY RESEARCH STUDY 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 Rates of House Brokerage Solutions, 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 home lowers the commission rate by about 0. 5 portion points"). The average sales rate 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 study's analytical results predict a corresponding commission rate of 6. 25%, resulting in a commission fee of $4,550. A home offering for $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 insufficient observations for new homes, in 59 percent of the remaining market areas the mean commission rate paid was statistically considerably timeshare cancellation letter example higher 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 significant at the one percent level for each of the formulas evaluated. See id. at 83. Nevertheless, Weicher notes that the magnitude of the sales cost result appears to be little. See Weicher, supra note 167, at 121 (" Goolsby and Childs find that the commission rate decreases about 0.
11 percentage points for each $10,000 boost in home rate, e. g., from 5. 90 percent to 5. 84 or 5. 79 percent."). 208. Goolsby & Childs, timeshare donation to charity supra note 205, at 85. Since the authors only observed the cooperative commission rate, they note that their conclusion rests on the assumption that the cooperative split is a set 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 study obviously incorporates the information and pertinent findings of an earlier 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 performed regressions evaluating how the agreement commission rate was affected by various market conditions and housing variables. As the authors describe, the commission rate captured in the sample is "the agreement rate and therefore does not reflect any modification or changes that may be renegotiated in between the house seller and the representative at the time of sale." Id.
213. While it is not possible to quantify the relative inflexibility based upon details reported by the authors, extra information can be utilized to compute a rough approximation. Weicher, supra note 166, at 121, reports that Sirmans and Turnbull computed a typical agreement commission rate of 5. 8% in Baton Rouge over the duration 1985-1987.