The authors did not identify 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 comments submitted to the Agencies in reaction to their request for public comments were some variation of a type letter that NAR made up, posted on wellesley financial group its site, and motivated its 1.
This letter praised the competitive nature of the realty industry. Commenters utilizing this form highlighted regional competitors in between private representatives as an outstanding example of strenuous competition to which the rest of the economy ought to strive - how to become a real estate agent in va. In addition, they claimed that the https://zanderjlwn013.simplesite.com/452976980 tens of countless brokerages, more than 2 million certified property specialists, and various service models throughout the nation offer consumers with a good deal of choice.
realtor.org/law_and_policy/mls/ild/regulator_letters. html) for more information on the association's instructions and suggested content. 174. NAR, Public Remark 208, at 1 (comment). 175. Id. at 2. 176. Blann, Public Comment 250, at 1. But see NAR 2006 STUDY, supra note 4, at 74 (69% of sellers called only one representative; 74% of sellers discovered their representative through either a referral or a previous relationship with the agent).
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Reppert, Public Comment 294, at 1. See also Tradii, Public Comment 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 average commission has actually dropped over the last 10 years from 3% to about 2.
179. Paulsen, Public Comment 364, at 1. Numerous panelists and commenters pointed out Real Patterns estimates 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 Remark 254, at 1. 181. Id. at 1. 182. Dwyer, Public Comment 55, at 1.
There are a variety of choices offered to purchasers and sellers from complete representatives to extremely minimal service representatives with a large range of cost structures."); Big, Public Comment 241, at 1 (" our average commission per deal side has actually dropped 13% this year compared to in 2015 as an outcome of competition from discount brokerage business designs 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 house prices that the broker maintains as a commission, and commission "fees" are the total dollar quantity paid by consumers for real estate brokerage services.
185. Weicher, supra note 167, at 121. what is a real estate appraiser. 186. NAR a logical source of commission data, provided its size and access to MLS data through its local associations does not study or report commission rates. A NAR economist described at the workshop that any typical commission rate reported by a popular entity such as NAR could be utilized by market participants 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 on commission rates out of concerns that the research results have the impact of setting a 'centerpiece' for professionals to set their commissions."). 187. Weicher, supra note 167, at 124. Weicher's estimations utilize average house sales prices, not mean house prices.
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Id. 189. See Hearing, supra note 1, at 5 (testament 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 fiscal year 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 carried out in the property brokerage market 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 FINANCING AND ECONOMICS 47 (2004 ); John D. Benjamin, G. Donald Jud & G. Stacy Sirmans, What Do We Know 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 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 Pricing of Home Brokerage Solutions, 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 lowers the commission rate by about 0. 5 portion points"). The typical sales cost of an existing home 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 cost, the study's analytical results forecast a corresponding commission rate of 6. 25%, causing a commission charge of $4,550. A home selling for $100,000 more, or $172,000, would pay a commission rate of 5. 73%, for a commission cost 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 Have a peek here greater for existing homes 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 substantial at the one percent level for each of the formulas checked. See id. at 83. However, Weicher notes that the magnitude of the sales cost result appears to be small. See Weicher, supra note 167, at 121 (" Goolsby and Childs discover that the commission rate decreases about 0.
11 percentage points for each $10,000 increase 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 only observed the cooperative commission rate, they keep in mind that their conclusion rests on the assumption that the cooperative split is a set share of the overall listing commission.
See id. at 81 n. 1. 209. See C.F. Sirmans & Geoffrey K. Turnbull, Brokerage Rates under Competition, 41 JOURNAL OF URBAN ECONOMICS 102 (1997 ). This study obviously includes the information 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 carried out regressions evaluating how the contract commission rate was impacted by numerous market conditions and real estate variables. As the authors discuss, the commission rate caught in the sample is "the contract rate and therefore does not reflect any change 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 info 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 determined an average agreement commission rate of 5. 8% in Baton Rouge over the period 1985-1987.