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 general public comments submitted to the Agencies in reaction to their demand for public remarks were some variation of a form letter that NAR made up, published on its site, and encouraged its 1.
This letter applauded the competitive nature of the real estate market. Commenters using this type highlighted regional competitors in between private representatives as an outstanding example of rigorous competitors to which the rest of the economy need to aspire - how to invest in real estate with no money. In addition, they declared that the tens of countless brokerages, more than two million licensed real estate experts, and various organization designs across the nation offer customers with a lot of choice.
realtor.org/law_and_policy/mls/ild/regulator_letters. html) for more details on the association's guidelines and recommended material. 174. NAR, Public Comment 208, at 1 (comment). 175. Id. at 2. 176. Blann, Public Comment 250, at 1. But see NAR 2006 SURVEY, supra note 4, at 74 (69% of sellers called just one representative; 74% of sellers discovered their agent through either a referral or a prior relationship with the representative).
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Reppert, Public Comment 294, at 1. See likewise Tradii, Public Comment 340, at 1; Wharton, Public Comment 179, at 1. 178. See, e. g., Earman, Public Remark 73, at 1-2 (average commission is contract cancellation letter "well under 6%"); Giorgianni, Public Comment 200, at 1 (" My average commission has actually dropped over the last 10 years from 3% to about 2.
179. Paulsen, Public Remark 364, at 1. A number of https://garrettpahs264.substack.com/p/facts-about-how-to-get-real-estate?sd=pf panelists and commenters mentioned Real Patterns price 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 Comment 254, at 1. 181. Id. at 1. 182. Dwyer, Public Comment 55, at 1.
There are a variety of options readily available to buyers and sellers from complete agents to really minimal service agents with a wide array of charge structures."); Big, Public Remark 241, at 1 (" our average commission per transaction side has actually dropped 13% this year compared to in 2015 as a result of competitors from discount rate brokerage company models 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 percentage of the home sales rate that the broker keeps as a commission, and commission "fees" are the total dollar amount paid by consumers genuine estate brokerage services.
185. Weicher, supra note 167, at 121. what is noi in real estate. 186. NAR a rational source of commission data, given its size and access to MLS information through its regional associations does not study or report commission rates. A NAR economic expert described at the workshop that any typical commission rate reported by a prominent entity such as NAR could be utilized by market participants as a focal point for collusion on commission rates.
at 225-26. See also NAR, Public Remark 208, at 12 (comment) (" [NAR] does not perform research on commission rates out of concerns that the research results have the result of setting a 'centerpiece' for practitioners to set their commissions."). 187. Weicher, supra note 167, at 124. Weicher's calculations utilize average house sales rates, not mean home prices.
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Id. 189. See Hearing, supra note 1, at 5 (testimony 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 ending Dec. 31, 2006, available at http://www. sec.gov/ Archives/edgar/data/ 1355001/000095012307003335/e31090e10vk. htm #tocpage. 192. A thorough review of the empirical research study performed in the property brokerage industry is beyond the scope of this Report.
Turnbull, Trends in Real Estate Research Study, 1988-2001: What's Hot and What's Not, 29 JOURNAL OF REAL ESTATE FINANCE AND ECONOMICS 47 (2004 ); John D. Benjamin, G. Donald Jud & G. Stacy Sirmans, What Do We Understand About Realty Brokerage?, 20 JOURNAL OF REALTY RESEARCH 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 Rates of House Brokerage Providers, 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 increase in the rate of the home decreases the commission rate by about 0. 5 percentage points"). The typical list prices of an existing house 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 rate, the research study's statistical outcomes predict a matching commission rate of 6. 25%, causing a commission cost of $4,550. A home offering for $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 (excluding 5 areas with inadequate observations for brand-new houses, in 59 percent of the remaining market locations the mean commission rate paid was statistically considerably higher for existing homes than for brand-new homes). 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 substantial at the one percent level for each of the formulas tested. See id. at 83. However, Weicher keeps in mind that the magnitude of the sales rate 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 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 only observed the cooperative commission rate, they keep in mind that their conclusion rests on the presumption 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 study obviously integrates the data 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. Visit this website Id. at 113-14. The authors carried out regressions evaluating how the contract commission rate was impacted by various market conditions and housing variables. As the authors discuss, the commission rate caught in the sample is "the agreement rate and therefore does not reflect any modification or changes that might be renegotiated between your house seller and the representative at the time of sale." Id.
213. While it is not possible to measure the relative inflexibility based upon information reported by the authors, additional info 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.