The authors did not recognize 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 action to their demand for public remarks were some variation of a kind letter that NAR made up, published on its website, and motivated its 1.
This letter praised the competitive nature of the real estate industry. Commenters using this form highlighted local competitors in between private agents as an outstanding example of strenuous competition to which the rest of the economy should aim - how to invest in commercial real estate. In addition, they declared that the 10s of thousands of brokerages, more than 2 million licensed realty professionals, and numerous organization designs across the country offer customers with a good deal of option.
realtor.org/law_and_policy/mls/ild/regulator_letters. html) for more details on the association's guidelines and suggested content. 174. NAR, Public Remark 208, at 1 (comment). 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 prior relationship with the representative).
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Reppert, Public Remark 294, at 1. See also 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 typical commission has actually dropped over the last 10 years from 3% to about 2.
179. Paulsen, Public Comment 364, at 1. A number of panelists and commenters mentioned Genuine 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 Remark 55, at 1.
There are a range https://ameblo.jp/charliehkoi218/entry-12757060937.html of options offered to purchasers and sellers from complete representatives to really restricted service representatives with a wide array of fee structures."); Big, Public Comment 241, at 1 (" our average commission per deal side has dropped 13% this year compared to last year as a result of competition from discount rate brokerage company designs operating 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 percentage of the home prices that the broker maintains as a commission, and commission "costs" are the overall dollar amount paid by customers genuine estate brokerage services.
185. Weicher, supra note 167, at 121. what are cc&rs in real estate. 186. NAR a rational source of commission information, offered its size and access to MLS information through its regional associations does not study or report commission rates. A NAR economist described at the workshop that any typical commission rate reported by a prominent entity such as NAR could be used by industry participants as a centerpiece 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 issues that the research results have the result of setting a 'focal point' for specialists to set their commissions."). 187. Weicher, supra note 167, at 124. Weicher's estimations utilize average home sales rates, not typical home list prices.
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Id. 189. See Hearing, supra note 1, at 5 (testament 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, readily available at http://www. sec.gov/ Archives/edgar/data/ 1355001/000095012307003335/e31090e10vk. htm #tocpage. 192. A detailed review of the empirical research study conducted in the realty brokerage market is beyond the scope of this Report.
Turnbull, Trends in Property Research, 1988-2001: What's Hot and What's Not, 29 JOURNAL OF PROPERTY FINANCE AND ECONOMICS 47 (2004 ); John D. Benjamin, G. Click here Donald Jud & G. Stacy Sirmans, What Do We Know About Realty Brokerage?, 20 JOURNAL OF REALTY 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 Pricing of Home 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 house lowers the commission rate by about 0. 5 percentage points"). The average prices of an existing house in 1980 was $72,800. See U.S. Department of Real Estate and Urban Advancement, U.S.
2006) [hereinafter "HUD REPORT"], offered at http://www. huduser.org/periodicals/ushmc/fall06/USHMC_Q306. pdf. At that rate, the research study's statistical results anticipate a matching commission rate of 6. 25%, resulting in a commission fee 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 (excluding 5 areas with insufficient observations for new homes, in 59 percent of the remaining market areas the mean commission rate paid was statistically substantially higher for existing houses than for 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 substantial at the one percent level for each of the formulas tested. See id. at 83. Nevertheless, Weicher keeps in mind that the magnitude of the prices impact appears to be small. 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 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. Because the authors just observed the cooperative commission rate, they keep in mind that their conclusion Have a peek at this website 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 Rates under Competition, 41 JOURNAL OF URBAN ECONOMICS 102 (1997 ). This study apparently incorporates the information and relevant findings of an earlier 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 performed regressions analyzing how the agreement commission rate was affected by different market conditions and housing variables. As the authors explain, the commission rate captured in the sample is "the contract rate and therefore does not show any change or modifications that might be renegotiated in between the home 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, extra details can be used to calculate 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 period 1985-1987.