The authors did not determine the source of the U.S. commission data. See NAR, Public Remark 208, at 15-16; Delcoure & Miller, supra, at 15. 173. Roughly half of the public remarks submitted to the Agencies in action to their ask for public remarks were some variation of a form letter that NAR composed, published on its website, and motivated its 1.
This letter applauded the competitive nature of the property industry. Commenters using this type highlighted regional competitors between private agents as an outstanding example of rigorous competition to which the rest of the economy need to aim - how long does it take to get real estate license. In addition, they claimed that the tens of thousands of brokerages, more than 2 million certified real estate professionals, and various service designs throughout the nation supply customers with an excellent offer of option.
realtor.org/law_and_policy/mls/ild/regulator_letters. html) for more details on the association's instructions and recommended content. 174. NAR, Public Comment 208, at 1 (remark). 175. Id. at 2. 176. Blann, Public Comment 250, at 1. But see NAR 2006 STUDY, supra note 4, at 74 (69% of sellers contacted just one representative; 74% of sellers found their agent through either a recommendation or a previous 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, Click here Public Comment 73, at 1-2 (typical commission is "well under 6%"); Giorgianni, Public Comment 200, at 1 (" My typical commission has dropped over the last ten years from 3% to about 2.
179. Paulsen, Public Comment 364, at 1. Numerous 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 Remark 208, at 12 (remark). 180. Lord, Public Remark 254, at 1. 181. Id. at 1. 182. Dwyer, Public Remark 55, at 1.
There are a range of alternatives readily available to buyers and sellers from complete service agents to extremely restricted service representatives with a wide range of cost structures."); Large, Public Comment 241, at 1 (" our typical commission per deal side has dropped 13% this year compared to last year as a result of competitors from discount rate brokerage service 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 prices that the broker keeps as a commission, and commission "charges" are the overall dollar amount paid by customers for real estate brokerage services.
185. Weicher, supra note 167, at 121. what is an encumbrance in real estate. 186. NAR a logical source of commission data, given its size and access to MLS data through its regional associations does not study or report commission rates. A NAR economist explained at the workshop that any average commission rate reported by a popular entity such as NAR might be utilized by industry individuals as a centerpiece for collusion on commission rates.
at 225-26. See also NAR, Public Remark 208, at 12 (comment) (" [NAR] does not carry out research study on commission rates out of concerns that the research outcomes have the effect of setting a 'focal point' for professionals to set their commissions."). 187. Weicher, supra note 167, at 124. Weicher's estimations utilize average home sales rates, not typical house list prices.
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Id. 189. See Hearing, supra note 1, at 5 (testimony 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 fiscal year ending Dec. 31, 2006, available at http://www. sec.gov/ Archives/edgar/data/ 1355001/000095012307003335/e31090e10vk. htm #tocpage. 192. A thorough evaluation of the empirical research carried out in the property brokerage market 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 REAL ESTATE FINANCE 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 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 Prices of Home Brokerage Solutions, 10 JOURNAL OF THE AMERICAN REALTY AND URBAN how to get out of wyndham timeshare ECONOMICS ASSOCIATION 331 (1982 ). 199. Id.
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200. Id. at 336. 201. Id. at 348 (" [O] n average, a $100,000 rise in the cost of the house decreases the commission rate by about 0. 5 portion points"). The average prices of an existing house in 1980 was $72,800. See U.S. Department of Real Estate and Urban Development, U.S.
2006) [hereinafter "HUD REPORT"], readily available at http://www. huduser.org/periodicals/ushmc/fall06/USHMC_Q306. pdf. At that cost, the research study's statistical results anticipate a corresponding commission rate of 6. 25%, resulting in a commission charge of $4,550. A house 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 brand-new houses, in 59 percent of the staying market areas the mean commission rate paid was statistically significantly 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 significant at the one percent level for each of the formulas evaluated. See id. at 83. Nevertheless, Weicher keeps in mind that the magnitude of the sales price result seems small. 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 boost in home cost, e. g., from 5. 90 percent to 5. 84 or 5. 79 percent."). 208. Goolsby & Childs, supra note 205, at 85. Given that the authors just 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 overall listing commission.
See id. at 81 n. 1. 209. See C.F. Sirmans & Geoffrey K. Turnbull, Brokerage Prices under Competitors, 41 JOURNAL OF URBAN ECONOMICS 102 (1997 ). This research study obviously incorporates the data and pertinent findings of an earlier research study conducted 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 contract commission rate was impacted by various market conditions and housing variables. As the authors explain, the commission rate caught in the sample is "the agreement rate and therefore does not show any adjustment or modifications that https://penzu.com/p/424d00fa may be renegotiated between your home seller and the agent at the time of sale." Id.
213. While it is not possible to measure the relative inflexibility based upon info reported by the authors, extra details can be utilized to calculate a rough approximation. Weicher, supra note 166, at 121, reports that Sirmans and Turnbull determined an average agreement commission rate of 5. 8% in Baton Rouge over the duration 1985-1987.