The authors did not recognize the source of the U.S. commission data. 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 response to their request for public comments were some variation of a form letter that NAR composed, posted on its website, and motivated its 1.
This letter praised the competitive nature of the realty industry. Commenters using this type highlighted regional competitors in between private agents as an outstanding example of strenuous competition to which the rest of the economy should aspire - how to become a real estate agent in illinois. In addition, they claimed that the tens of thousands of brokerages, more than two million licensed realty experts, and various organization models throughout the country provide consumers with a lot of choice.
realtor.org/law_and_policy/mls/ild/regulator_letters. html) for more information on the association's instructions 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 gotten in touch with just one agent; 74% of sellers discovered their representative through either a referral or a previous relationship with the agent).
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Reppert, Public Remark 294, at 1. See also Tradii, Public Comment 340, at 1; Wharton, Public Remark 179, at 1. 178. See, e. g., Earman, Public Remark 73, at 1-2 (typical commission is "well under 6%"); Giorgianni, Public Comment 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 price quotes of commission rates. See, e. g., Kunz, Tr. at 81-82; Lewis, Tr. at 172; NAR, Public Comment 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 alternatives available to purchasers and sellers from complete service agents to very limited service representatives with a variety of charge structures."); Big, Public Remark 241, at 1 (" our typical commission per deal side has actually dropped 13% this year compared to in 2015 as an outcome of competition from discount rate brokerage service designs operating in our market").
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GAO REPORT, supra note 3, at 12. 184. As talked about in Chapter I of this Report, the commission "rate" is the portion of the home sales price that the broker retains as a commission, and commission "fees" are the overall dollar quantity paid by consumers genuine estate brokerage services.
185. Weicher, supra note 167, at 121. what is redlining in real estate. 186. NAR a sensible source of commission data, given its size and access to MLS data through its regional associations does not study or report commission rates. A NAR financial expert explained at the workshop that any typical commission rate reported by a prominent entity such as NAR might be utilized by industry participants as a centerpiece for collusion on commission rates.
at 225-26. See also NAR, Public Comment 208, at 12 (remark) (" [NAR] does not carry out research on commission rates out of issues 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 use siriusxm cancellation department average house prices, not median home sales costs.
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Id. 189. See Hearing, supra note 1, at 5 (testament 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. http://arthursmgo592.yousher.com/the-single-strategy-to-use-for-how-to-get-your-real-estate-license-in-texas An extensive evaluation of the empirical research conducted in the real 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 REALTY FINANCING AND ECONOMICS 47 (2004 ); John D. Benjamin, G. Donald Jud & G. Stacy Sirmans, What Do We Understand About Property 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 Prices of House Brokerage Services, 10 JOURNAL OF THE AMERICAN REAL ESTATE 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 decreases the commission rate by about 0. 5 percentage points"). The typical sales cost of an existing house in 1980 was $72,800. See U.S. Department of Housing and Urban Development, U.S.
2006) [hereinafter "HUD REPORT"], available at http://www. huduser.org/periodicals/ushmc/fall06/USHMC_Q306. pdf. At that price, the research study's analytical results predict a matching commission rate of 6. 25%, causing a commission cost of $4,550. A house 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 (omitting five locations with insufficient observations for brand-new homes, in 59 percent of the staying market locations the mean commission rate paid was statistically substantially higher for existing houses 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 significant at the one percent level for each of the formulas evaluated. See id. at 83. Nevertheless, Weicher notes that the magnitude of the sales rate impact seems small. 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 increase in house cost, 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 sample letter to cancel timeshare contract 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 Competition, 41 JOURNAL OF URBAN ECONOMICS 102 (1997 ). This research study obviously includes the data and appropriate findings of an earlier research 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. Id. at 113-14. The authors performed regressions analyzing how the agreement commission rate was impacted by different market conditions and real estate variables. As the authors describe, the commission rate caught in the sample is "the contract rate and for that reason does not show any adjustment or modifications that might be renegotiated in between your home 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, extra info can be used to compute 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 period 1985-1987.