The authors did not determine the source of the U.S. commission information. See NAR, Public Remark 208, at 15-16; Delcoure & Miller, supra, at 15. 173. Roughly half of the general public remarks sent to the Agencies in reaction to their ask for public remarks were some variation of a form letter that NAR made how to get rid of timeshare maintenance fees up, published on its site, and encouraged its 1.
This letter praised the competitive nature of the property industry. Commenters utilizing this type highlighted local competition between specific representatives as an exceptional example of rigorous competitors to which the rest of the economy should aim - what is redlining in real estate. In addition, they declared that the tens of thousands of brokerages, more than 2 million certified genuine estate experts, and different organization models across the nation offer consumers with a good deal of choice.
realtor.org/law_and_policy/mls/ild/regulator_letters. html) for more details on the association's instructions and recommended material. 174. NAR, Public Comment 208, at 1 (remark). 175. Id. at 2. 176. Blann, Public Remark 250, at 1. But 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 representative).
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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 Comment 73, at 1-2 (average commission is "well under 6%"); Giorgianni, Public Comment 200, at 1 (" My typical commission has dropped over the last 10 years from 3% to about 2.
179. Paulsen, Public Comment 364, at 1. Numerous panelists and commenters cited Real Trends estimates 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 Comment 55, at 1.
There are a range of choices available to buyers and sellers from full service representatives to really minimal service agents with a wide range of charge structures."); Big, Public Remark 241, at 1 (" our average commission per deal side has actually dropped 13% this year compared to in 2015 as a result of competitors from discount brokerage service models running 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 house list prices that the broker maintains as a commission, and commission "costs" are the overall dollar amount paid by customers for real estate brokerage services.
185. Weicher, supra note 167, at 121. how to become a real estate appraiser. 186. NAR a rational source of commission information, provided its size and access to MLS information through its regional associations does not study or report commission rates. A NAR economist 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 focal point for collusion on commission rates.
at 225-26. See likewise NAR, Public Remark 208, at 12 (comment) (" [NAR] does not perform research study on commission rates out of concerns that the research results have the result of setting a 'focal point' for professionals mytimeshareexpert to set their commissions."). 187. Weicher, supra note 167, at 124. Weicher's computations use average house list prices, not median house sales prices.
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Id. 189. See Hearing, supra note 1, at 5 (testament of David G. Wood), readily 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, available at http://www. sec.gov/ Archives/edgar/data/ 1355001/000095012307003335/e31090e10vk. htm #tocpage. 192. A detailed evaluation of the empirical research study carried out in the realty brokerage market is beyond the scope of this Report.
Turnbull, Trends in Realty Research Study, 1988-2001: What's Hot and What's Not, 29 JOURNAL OF REALTY FINANCE AND ECONOMICS 47 (2004 ); John D. Benjamin, G. Donald Jud & G. Stacy Sirmans, What Do We Know About Property 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, Expenses and Pricing 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 rise in the rate of the home decreases 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 Development, U.S.
2006) [hereinafter "HUD REPORT"], readily available at http://www. huduser.org/periodicals/ushmc/fall06/USHMC_Q306. pdf. At that rate, the study's analytical outcomes anticipate a matching commission rate of 6. 25%, leading to a commission cost 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 locations with insufficient observations for new houses, in 59 percent of the remaining market locations the mean commission rate paid was statistically substantially 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 checked. See id. at 83. However, Weicher keeps in mind that the magnitude of the list prices impact seems small. See Weicher, supra note 167, at 121 (" Goolsby and Childs find 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. Considering that Helpful site the authors just observed the cooperative commission rate, they note that their conclusion 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 Pricing under Competitors, 41 JOURNAL OF URBAN ECONOMICS 102 (1997 ). This research study obviously includes 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 carried out regressions analyzing how the contract commission rate was impacted by different market conditions and housing variables. As the authors describe, the commission rate caught in the sample is "the contract rate and therefore does not reflect any modification or modifications that may be renegotiated in between the house seller and the representative at the time of sale." Id.
213. While it is not possible to measure the relative inflexibility based on information reported by the authors, supplemental info can be utilized to compute a rough approximation. Weicher, supra note 166, at 121, reports that Sirmans and Turnbull calculated a typical agreement commission rate of 5. 8% in Baton Rouge over the period 1985-1987.