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. Around half of the general public comments sent to the Agencies in action to their request for public remarks were some variation of a form letter that NAR made up, published on its site, and motivated its 1.
This letter praised the competitive nature of the property market. Commenters utilizing this type highlighted local competitors between individual agents as an outstanding example of extensive competition to which the remainder of the economy need to strive - what is cap rate real estate. In addition, they declared that the 10s of thousands of brokerages, more than 2 million certified realty experts, and different business models across the nation supply consumers with a terrific deal of option.
realtor.org/law_and_policy/mls/ild/regulator_letters. html) for more details on the association's guidelines and suggested content. 174. NAR, Public Remark 208, at 1 (comment). 175. Id. at 2. 176. Blann, Public Remark 250, at 1. However see NAR 2006 SURVEY, supra note 4, at 74 (69% of sellers contacted just one representative; 74% of sellers discovered their representative 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 Comment 340, at 1; Wharton, Public Remark 179, at 1. 178. See, e. g., Earman, Public Comment 73, at 1-2 (average commission is "well under 6%"); Giorgianni, Public Remark 200, at 1 (" My typical commission has actually dropped over the last ten years from 3% to about 2.
179. Paulsen, Public Comment 364, at 1. A number of panelists and commenters cited Genuine Patterns estimates 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 Comment 254, at 1. 181. Id. at 1. 182. Dwyer, Public Remark 55, at 1.
There are a variety of options available to purchasers and sellers from full service representatives to very restricted service agents with a wide range of charge structures."); Large, Public Remark 241, at 1 (" our typical commission per deal side has actually dropped 13% this year compared to last year as an outcome of competition from discount brokerage organization models running 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 house prices that the broker keeps as a commission, and commission "charges" are the overall dollar amount paid by consumers for genuine estate brokerage services.
185. Weicher, supra note 167, at 121. how to generate leads in real estate. 186. NAR a sensible 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 financial expert discussed at the workshop that any average commission time share lawyer rate reported by a popular entity such as NAR could be utilized by market individuals as a centerpiece for collusion on commission rates.
at 225-26. See likewise NAR, Public Comment 208, at 12 (remark) (" [NAR] does not conduct research study on commission rates out of concerns that the research results have the effect of setting a 'centerpiece' for professionals to set their commissions."). 187. Weicher, supra note 167, at 124. Weicher's computations use average home sales costs, not average home list 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 ending Dec. 31, 2006, readily available at http://www. sec.gov/ Archives/edgar/data/ 1355001/000095012307003335/e31090e10vk. htm #tocpage. 192. A comprehensive review of the empirical research study conducted in the real estate brokerage industry is beyond the scope of this Report.
Turnbull, Trends in Property Research, 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 Know About Realty Brokerage?, 20 JOURNAL OF PROPERTY 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 Prices of House Brokerage Services, 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 cost of the house decreases 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 Real Estate and Urban Development, U.S.
2006) [hereinafter "HUD REPORT"], readily available at http://www. https://travisinka627.skyrock.com/3350931950-Getting-The-What-Does-A-Real-Estate-Developer-Do-To-Work.html 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 cost of $4,550. A home selling for $100,000 more, or $172,000, would pay a commission rate of 5. 73%, for a commission charge of $9,901.
Carney, supra note 198, at 339 (leaving out five locations with insufficient observations for new homes, in 59 percent of the remaining market areas the mean commission rate paid was statistically significantly greater for existing houses than for 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 significant at the one percent level for each of the equations checked. See id. at 83. However, Weicher notes that the magnitude of the sales rate result seems little. See Weicher, supra note 167, at 121 (" Goolsby and Childs discover that the commission rate decreases about 0.
11 portion points for each $10,000 boost in home rate, 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 presumption that the cooperative split is a set share of the overall listing commission.
See id. at Hop over to this website 81 n. 1. 209. See C.F. Sirmans & Geoffrey K. Turnbull, Brokerage Rates under Competitors, 41 JOURNAL OF URBAN ECONOMICS 102 (1997 ). This study apparently includes the information and appropriate findings of an earlier research study conducted 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 examining how the contract commission rate was impacted by various market conditions and housing variables. As the authors describe, the commission rate captured in the sample is "the contract rate and for that reason does not reflect any adjustment or modifications that may be renegotiated in between the house seller and the agent at the time of sale." Id.
213. While it is not possible to quantify the relative inflexibility based upon information reported by the authors, supplemental info can be used to calculate a rough approximation. Weicher, supra note 166, at 121, reports that Sirmans and Turnbull calculated a typical contract commission rate of 5. 8% in Baton Rouge over the duration 1985-1987.