The authors did not determine the source of the U.S. commission data. See NAR, Public Comment 208, at 15-16; Delcoure & Miller, supra, at 15. 173. Roughly half of the public comments submitted to the Agencies in response to their ask for public remarks were some variation of a type letter that NAR made up, published on its website, and encouraged its 1.
This letter praised the competitive nature of the realty market. Commenters using this form highlighted local competition in between individual agents as an impressive example of extensive competition to which the remainder of the economy need to aspire - what is cam in real estate. In addition, they declared that the tens of countless brokerages, more than two million licensed property professionals, and various company models 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 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 called just one representative; 74% of sellers found their representative through either a referral or a prior relationship with the representative).
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Reppert, Public Comment 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 Remark 364, at 1. A number of panelists and commenters pointed out Genuine Patterns price quotes of commission rates. See, e. g., Kunz, Tr. at 81-82; Lewis, Tr. at 172; NAR, Public Comment 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 range of alternatives available to purchasers and sellers from complete service representatives to very limited service agents with a variety of cost structures."); Big, Public Remark 241, at 1 (" our typical commission per deal side has actually dropped 13% this year compared to last year as a result of competitors 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 portion of the home sales rate that the broker retains as a commission, and commission "charges" are the overall dollar quantity paid by customers for real estate brokerage services.
185. Weicher, supra note 167, at 121. how to get into commercial real estate. 186. NAR a logical 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 financial expert discussed at the workshop that any average commission rate reported by a prominent 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 Remark 208, at 12 (remark) (" [NAR] does not perform research on commission rates out of concerns that the research study results have the impact of setting a 'centerpiece' for practitioners to set their commissions."). 187. Weicher, supra note 167, at 124. Weicher's estimations use average home list prices, not typical home list prices.
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Id. 189. See Hearing, supra note 1, at 5 (testimony 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 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 study 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 PROPERTY FINANCE AND ECONOMICS 47 (2004 ); John D. Benjamin, G. Donald Jud & G. Stacy Sirmans, What Do We Know About Real Estate Brokerage?, 20 JOURNAL OF REAL ESTATE RESEARCH STUDY 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 how much does a timeshare cost monthly 48. 197. Id. at 52. 198. See Michael Carney, Costs and Prices of Home Brokerage Services, 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 increase in the rate of the home reduces the commission rate by about 0. 5 portion points"). The typical prices of an existing home 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 study's statistical outcomes anticipate a matching commission rate of 6. 25%, leading to 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 cost of $9,901.
Carney, supra note 198, at 339 (excluding 5 locations with insufficient observations for brand-new homes, in 59 percent of the staying market locations the mean commission rate paid was statistically considerably greater for existing houses than for brand-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 significant at the one percent level can you cancel an llc for each of the equations tested. See id. at 83. However, Weicher notes that the magnitude of the prices result seems 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 house price, 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 keep in mind that their conclusion rests on the assumption that the cooperative split is a fixed share of the total 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 research study apparently includes the information and appropriate findings of an earlier 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 performed regressions examining how the agreement commission rate was affected by different market conditions and real estate variables. As the authors explain, the commission rate caught in the sample is "the contract rate and for that reason does not show any modification or modifications that may be renegotiated in between the home seller and the representative at the time of sale." Id.
213. While it is not possible to measure the relative inflexibility based on info 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 contract commission rate of 5. 8% in Baton Rouge over the duration 1985-1987.