The authors did not determine the source of the U.S. commission information. See NAR, Public Comment 208, at 15-16; Delcoure & Miller, supra, at 15. 173. Around half of the public comments sent to the Agencies in response to their request for public remarks were some variation of a kind letter that NAR made up, posted on its website, Visit the website and encouraged its 1.
This letter praised the competitive nature of the real estate industry. Commenters utilizing this kind highlighted regional competition in between private agents as an exceptional example of strenuous competitors to which wesley careers the rest of the economy should aim - what can i do with a real estate license. In addition, they claimed that the tens of thousands of brokerages, more than two million licensed real estate professionals, and different business models throughout the country provide customers with a fantastic offer of choice.
realtor.org/law_and_policy/mls/ild/regulator_letters. html) for more details on the association's guidelines 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 SURVEY, supra note 4, at 74 (69% of sellers gotten in touch with just 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 Remark 294, at 1. See also Tradii, Public Remark 340, at 1; Wharton, Public Remark 179, at 1. 178. See, e. g., Earman, Public Comment 73, at 1-2 (typical commission is "well under 6%"); Giorgianni, Public Comment 200, at 1 (" My typical commission has actually dropped over the last ten years from 3% to about 2.
179. Paulsen, Public Remark 364, at 1. A number of panelists and commenters cited Genuine Trends quotes 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 Remark 55, at 1.
There are how to end a timeshare presentation a range of alternatives available to purchasers and sellers from complete service agents to really restricted service agents with a broad range of fee structures."); Large, Public Remark 241, at 1 (" our typical commission per deal side has dropped 13% this year compared to last year as an outcome of competition from discount brokerage service designs 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 portion of the home prices that the broker keeps as a commission, and commission "charges" are the total dollar amount paid by customers genuine estate brokerage services.
185. Weicher, supra note 167, at 121. what is cam in 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 economist described at the workshop that any average commission rate reported by a popular entity such as NAR might be utilized by industry 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 perform research on commission rates out of concerns that the research results have the effect of setting a 'centerpiece' for practitioners to set their commissions."). 187. Weicher, supra note 167, at 124. Weicher's estimations use typical home list prices, not mean house sales costs.
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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 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 performed in the property brokerage industry 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 FINANCE AND ECONOMICS 47 (2004 ); John D. Benjamin, G. Donald Jud & G. Stacy Sirmans, What Do We Understand About Realty Brokerage?, 20 JOURNAL OF REAL ESTATE RESEARCH STUDY 5 (2000 ). 193. 1983 FTC STAFF 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 House 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 rise in the price of the home lowers the commission rate by about 0. 5 portion points"). The average list prices of an existing home in 1980 was $72,800. See U.S. Department of Housing and Urban Advancement, 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 statistical results anticipate a corresponding commission rate of 6. 25%, causing a commission charge of $4,550. A home 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 (leaving out 5 areas 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 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 considerable at the one percent level for each of the equations evaluated. See id. at 83. Nevertheless, Weicher notes that the magnitude of the sales price impact seems small. See Weicher, supra note 167, at 121 (" Goolsby and Childs discover that the commission rate declines about 0.
11 portion points for each $10,000 increase in home cost, e. g., from 5. 90 percent to 5. 84 or 5. 79 percent."). 208. Goolsby & Childs, supra note 205, at 85. Since the authors just observed the cooperative commission rate, they note 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. 1. 209. See C.F. Sirmans & Geoffrey K. Turnbull, Brokerage Prices under Competition, 41 JOURNAL OF URBAN ECONOMICS 102 (1997 ). This study obviously integrates the data and pertinent findings of an earlier research study performed 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 impacted by various market conditions and housing variables. As the authors discuss, the commission rate caught in the sample is "the contract rate and therefore does not show any adjustment or changes that may be renegotiated in between your house seller and the representative 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 info can be used to calculate a rough approximation. Weicher, supra note 166, at 121, reports that Sirmans and Turnbull determined an average contract commission rate of 5. 8% in Baton Rouge over the duration 1985-1987.