The authors did not identify the source of the U.S. commission information. See NAR, Public Comment 208, at 15-16; Delcoure & Miller, supra, at 15. 173. Roughly half of the general public remarks submitted to the Agencies in response to their ask for public comments were some variation of a kind letter that NAR composed, published on its website, and motivated its 1.
This letter praised the competitive nature of the property market. Commenters using this kind highlighted regional competition between specific agents as an outstanding example of strenuous competitors to which the rest of the economy should aspire - how to get a real estate license in ohio. In addition, they declared that the 10s of countless brokerages, more than two million certified realty specialists, and numerous business designs throughout the nation supply consumers with an excellent deal of choice.
realtor.org/law_and_policy/mls/ild/regulator_letters. html) for more details on the association's instructions and suggested material. 174. NAR, Public Comment 208, at 1 (comment). 175. Id. at 2. 176. Blann, Public Comment 250, at 1. However see NAR 2006 SURVEY, supra note 4, at 74 (69% of sellers contacted only one agent; 74% of sellers discovered their representative through either a referral or a prior relationship with the agent).
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Reppert, Public Comment 294, is timeshare a good idea 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 (average commission is "well under 6%"); Giorgianni, Public Remark 200, at 1 (" My average commission has actually dropped over the last 10 years from 3% to about 2.
179. Paulsen, Public Remark 364, at 1. A number of 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 Comment 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 options offered to buyers and sellers from complete service agents to really limited service agents with a wide array of cost structures."); Large, Public Comment 241, at 1 (" our typical commission per deal side has actually dropped 13% this year compared to in 2015 as an outcome of competitors from discount rate brokerage organization models running in our market").
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GAO REPORT, supra note 3, at 12. 184. As discussed in Chapter I of this Report, the commission "rate" is the portion of the home sales rate that the broker keeps as a commission, and commission "costs" are the overall dollar quantity paid by customers for genuine estate brokerage services.
185. Weicher, supra note 167, at 121. what is a real estate novelist. 186. NAR a logical source of commission information, provided its size and access to MLS information through its regional associations does not study or report commission rates. A NAR economic expert described at the workshop that any typical commission rate reported by a prominent entity such as NAR could be utilized by market individuals as a focal point for collusion on commission rates.
at 225-26. See likewise NAR, Public Comment 208, at 12 (remark) (" [NAR] does not conduct research on commission rates out of concerns that the research results have the impact of setting a 'centerpiece' for specialists to set their commissions."). 187. Weicher, supra note 167, at 124. Weicher's calculations utilize average home prices, not mean house sales rates.
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Id. 189. See Hearing, supra note 1, at 5 (testimony 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 financial year ending Dec. 31, 2006, readily available at http://www. sec.gov/ Archives/edgar/data/ 1355001/000095012307003335/e31090e10vk. htm #tocpage. 192. A detailed evaluation of the empirical research conducted in the genuine estate brokerage market 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 PROPERTY 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 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 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 rise in the price of the house minimizes the commission rate by about 0. 5 portion points"). The typical list 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 outcomes predict a corresponding commission rate of 6. 25%, resulting in 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 charge of $9,901.
Carney, supra note 198, at 339 (excluding 5 locations with inadequate observations for new houses, in 59 percent of the staying market locations the mean commission rate paid was statistically considerably higher for existing homes 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 substantial at the one percent level for each of the equations checked. See id. at 83. Nevertheless, Weicher keeps in mind that the magnitude of the sales cost impact appears to be little. See Weicher, supra note 167, at 121 (" Goolsby and Childs find that the commission rate declines about 0.
11 percentage points for each $10,000 increase in house rate, 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 just observed the cooperative commission rate, they note that their conclusion rests on the assumption that the cooperative split is a set share of the overall listing commission.
See id. at 81 n. 1. 209. See C.F. Sirmans & Geoffrey K. Turnbull, Brokerage Prices under Competition, 41 JOURNAL OF URBAN ECONOMICS 102 (1997 ). This study apparently incorporates the information and pertinent 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 carried out regressions examining how the agreement commission rate was affected by numerous market conditions and housing variables. As the authors describe, the commission rate captured in the sample is "the agreement rate and therefore does not show any change or modifications that might be renegotiated in between your house seller and the agent at the time of sale." Id.
213. While it is not possible to quantify the relative inflexibility based on details reported by the authors, additional details can be utilized to calculate 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.