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 general public remarks submitted to the Agencies in response to their demand for public comments were some variation of a form letter that NAR made up, posted on its site, and encouraged Learn more here its 1.
This letter praised the competitive nature of the realty market. Commenters using this form highlighted local competition between individual representatives as an exceptional example of strenuous competitors to which the rest of the economy should aim - what can i do with a real estate license. In addition, they claimed that the 10s of countless brokerages, more than 2 million certified real estate specialists, and different business models across the country offer consumers with an excellent offer of option.
realtor.org/law_and_policy/mls/ild/regulator_letters. html) for more information on the association's directions and suggested content. 174. NAR, Public Comment 208, at 1 (remark). 175. Id. at 2. 176. Blann, Public Comment 250, at 1. However see NAR 2006 SURVEY, supra note 4, at 74 (69% of sellers called only one representative; 74% of sellers found their agent through either a referral or a previous relationship with the agent).
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Reppert, Public Remark 294, 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 typical commission has 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 price 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 Remark 254, at 1. 181. Id. at 1. 182. Dwyer, Public Comment 55, at 1.
There Helpful resources are a range of choices offered to purchasers and sellers from complete service agents to really restricted service agents with a variety of fee structures."); Big, Public Remark 241, at 1 (" our average commission per transaction side has dropped 13% this year compared to in 2015 as an outcome of competition from discount brokerage service designs operating in our market").
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GAO REPORT, supra note 3, at 12. 184. As gone over in Chapter I of this Report, the commission "rate" is the percentage of the home sales price that the broker maintains as a commission, and commission "costs" are the overall dollar quantity paid by consumers for real estate brokerage services.
185. Weicher, supra note 167, at 121. what does arv mean in real estate. 186. NAR a sensible source of commission data, given its size and access to MLS data through its local associations does not study or report commission rates. A NAR financial expert described at the workshop that any average commission rate reported by a popular entity such as NAR might be utilized by market individuals as a centerpiece for collusion on commission rates.
at 225-26. See also NAR, Public Remark 208, at 12 (remark) (" [NAR] does not perform research study on commission rates out of issues that the research results have the effect of setting a 'centerpiece' for specialists to set their commissions."). 187. Weicher, supra note 167, at 124. Weicher's calculations utilize typical house sales rates, not mean home sales prices.
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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, offered at http://www. sec.gov/ Archives/edgar/data/ 1355001/000095012307003335/e31090e10vk. htm #tocpage. 192. An extensive evaluation of the empirical research conducted in the property brokerage market 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 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 Rates of Home Brokerage Providers, 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 house reduces 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 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 price, the research study's statistical results forecast a matching commission rate of 6. 25%, resulting in a commission charge of $4,550. A home costing $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 areas with inadequate observations for brand-new houses, in 59 percent of the remaining market areas the mean commission rate paid was statistically significantly greater for existing homes 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 considerable at the one percent level for each of the equations tested. See id. at 83. Nevertheless, Weicher notes that the magnitude of the list prices result seems small. See Weicher, supra note 167, at 121 (" Goolsby and Childs discover that the commission rate declines about 0.
11 percentage 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. Since the authors only 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 research study apparently incorporates the data and appropriate findings of an earlier 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. westlake financial services las vegas The authors performed regressions analyzing how the agreement commission rate was affected by various market conditions and housing variables. As the authors describe, the commission rate captured in the sample is "the contract rate and therefore does not show any modification or changes that might be renegotiated between the home seller and the representative at the time of sale." Id.
213. While it is not possible to quantify the relative inflexibility based on info reported by the authors, extra details can be utilized to calculate 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.