The authors did not recognize the source of the U.S. commission data. See NAR, Public Remark 208, at 15-16; Delcoure & Miller, supra, at 15. 173. Approximately half of the public comments sent to the Agencies in action to their request for public comments were some variation of a form letter that NAR made up, posted on its site, and motivated its 1.
This letter applauded the competitive nature of the realty industry. Commenters using this form highlighted regional competition between private representatives as an impressive example of strenuous competitors to which the rest of the economy ought to aspire - how much does it cost to get a real estate license. In addition, they declared that the tens of countless brokerages, more than 2 million licensed real estate specialists, and numerous company designs across the nation provide consumers with a good deal of choice.
realtor.org/law_and_policy/mls/ild/regulator_letters. html) for more details on the association's directions and suggested content. 174. NAR, Public Remark 208, at 1 (remark). 175. Id. at 2. 176. Blann, Public Remark 250, at 1. However see NAR 2006 SURVEY, supra note 4, at 74 (69% of sellers gotten in touch with just one agent; 74% of sellers discovered their agent through either a referral or a previous relationship with the representative).
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Reppert, Public Comment 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 Comment 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 mentioned Real 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 Comment 254, at 1. 181. Id. at 1. 182. Dwyer, Public Comment 55, at 1.
There are a variety of options offered to purchasers and sellers from complete representatives to really restricted service agents with a wide array of fee structures."); Big, Public Comment 241, at 1 (" our typical commission per deal side has actually dropped 13% this year compared to last year as a result of competition from discount brokerage organization 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 portion of the home list prices that the broker maintains as a commission, and commission "charges" are the overall dollar quantity paid by customers for genuine estate brokerage services.
185. Weicher, supra note 167, at 121. how long does it take to get a real estate license. 186. NAR a rational source of commission data, offered its size and access to MLS information through its local associations does not study or report commission rates. A NAR timeshareadvisor economic expert explained at the workshop that any typical commission rate reported by a prominent entity such as NAR might be used by industry participants as a focal point for collusion on commission rates.
at 225-26. See likewise NAR, Public Comment 208, at 12 (comment) (" [NAR] does not carry out research on commission rates out of concerns that the research outcomes have the result of setting a 'centerpiece' for specialists to set their commissions."). 187. Weicher, supra note 167, at 124. Weicher's estimations utilize typical home sales costs, not median home list prices.
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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 financial year ending Dec. 31, 2006, offered at http://www. sec.gov/ Archives/edgar/data/ 1355001/000095012307003335/e31090e10vk. htm #tocpage. 192. A thorough evaluation of the empirical research conducted in the genuine estate 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 https://manuelwvsl058.wordpress.com/2022/08/04/the-facts-about-what-do-real-estate-agents-make-uncovered/ REALTY FINANCING 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 STUDY 5 (2000 ). 193. 1983 FTC STAFF REPORT, supra note 9, at 45.
Id. 195. Id. at Website link 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 Rates of Home 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 cost of the house minimizes the commission rate by about 0. 5 percentage points"). The typical sales rate 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 cost, the research study's statistical results predict a corresponding commission rate of 6. 25%, causing a commission fee 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 (excluding 5 locations with insufficient observations for new homes, in 59 percent of the remaining market locations the mean commission rate paid was statistically significantly greater for existing houses 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 significant at the one percent level for each of the equations tested. See id. at 83. However, Weicher keeps in mind that the magnitude of the prices result appears to be little. See Weicher, supra note 167, at 121 (" Goolsby and Childs find that the commission rate decreases about 0.
11 percentage points for each $10,000 increase in house price, 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 assumption that the cooperative split is a fixed share of the overall 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 includes the information 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. The authors performed regressions evaluating how the agreement commission rate was affected 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, extra details can be used to calculate a rough approximation. Weicher, supra note 166, at 121, reports that Sirmans and Turnbull determined a typical agreement commission rate of 5. 8% in Baton Rouge over the duration 1985-1987.