The authors did not identify the source of the U.S. commission data. See NAR, Public Remark 208, at 15-16; Delcoure & Miller, supra, at 15. 173. Around half of the public remarks submitted to the Agencies in action to their request 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 form highlighted local competitors between specific agents as an outstanding example of strenuous competition to which the rest of the economy should strive - how to buy real estate with no money. In addition, they claimed that the tens of countless brokerages, more than two million licensed genuine estate specialists, and numerous service designs across the country supply consumers with a good deal of option.
realtor.org/law_and_policy/mls/ild/regulator_letters. html) for more information on the association's instructions and recommended 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 just one representative; 74% of sellers discovered their representative through either a referral or a previous relationship with the agent).
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Reppert, Public Remark 294, at 1. See also Tradii, Public Comment 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 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 mentioned Genuine 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 variety of options offered to buyers and sellers from complete agents to very limited service representatives with a wide variety of cost structures."); Large, Public Comment 241, at 1 (" our average commission per deal side has actually dropped 13% this year compared to in 2015 as an outcome of competitors from discount rate brokerage business 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 house list prices that the broker maintains as a commission, and commission "fees" are the overall dollar amount paid by customers for genuine estate brokerage services.
185. Weicher, supra note 167, at 121. how much do real estate agents make per sale. 186. NAR a sensible source of commission data, offered its size and access to MLS information through its local associations does not study or report commission rates. A NAR economic expert explained at the workshop that any average commission rate reported by a popular entity such as NAR could be utilized by market participants as a centerpiece for collusion on commission rates.
at 225-26. See also NAR, Public Comment 208, at 12 (remark) (" [NAR] does not conduct research on commission rates out of concerns that the research study outcomes have the effect of setting a 'centerpiece' for professionals to set their commissions."). 187. Weicher, supra note 167, at 124. Weicher's estimations utilize typical house sales costs, not mean house prices.
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Id. 189. See Hearing, supra note 1, at free timeshare for sale 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 fiscal year ending Dec. 31, 2006, readily available at http://www. sec.gov/ Archives/edgar/data/ 1355001/000095012307003335/e31090e10vk. htm #tocpage. 192. An extensive evaluation of the empirical research study performed in the realty brokerage industry is beyond the scope of this Report.
Turnbull, Trends in Realty Research, 1988-2001: What's Hot and What's Not, 29 JOURNAL OF PROPERTY FINANCE AND ECONOMICS 47 (2004 ); John D. Benjamin, G. Donald Jud & G. Stacy Sirmans, What Do We Understand About Real Estate Brokerage?, 20 JOURNAL OF PROPERTY 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, Expenses and Pricing 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 cost of the home decreases the commission rate by about 0. 5 portion points"). The average list prices of an existing house in 1980 was $72,800. See U.S. Department of Housing and Urban Development, U.S.
2006) [hereinafter "HUD REPORT"], available at http://www. huduser.org/periodicals/ushmc/fall06/USHMC_Q306. pdf. At that rate, the research study's statistical results anticipate a corresponding commission rate of 6. 25%, causing 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 fee of $9,901.
Carney, supra note 198, at 339 (leaving out 5 areas with insufficient observations for new homes, in 59 percent of the remaining market areas the mean commission rate paid was statistically considerably greater for existing homes than for brand-new houses). 203. Id. 204. Great post to read 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 evaluated. See id. at 83. However, Weicher keeps in mind that the magnitude of the list prices impact seems little. See Weicher, supra note 167, at 121 (" Goolsby and Childs discover that the commission rate decreases about 0.
11 portion points for each $10,000 boost in house rate, 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. are timeshares ever a good deal 1. 209. See C.F. Sirmans & Geoffrey K. Turnbull, Brokerage Pricing under Competition, 41 JOURNAL OF URBAN ECONOMICS 102 (1997 ). This study apparently incorporates the data and relevant 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 performed regressions examining how the contract commission rate was affected by various market conditions and real estate variables. As the authors discuss, the commission rate caught in the sample is "the agreement rate and for that reason does not reflect any adjustment or changes that might 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 information reported by the authors, extra information can be used to compute a rough approximation. Weicher, supra note 166, at 121, reports that Sirmans and Turnbull calculated an average agreement commission rate of 5. 8% in Baton Rouge over the duration 1985-1987.