The authors did not determine the source of the U.S. commission data. See NAR, Public Remark 208, at 15-16; Delcoure & Miller, supra, at 15. 173. Around half of the public comments sent to the Agencies in reaction to their request for public remarks were some variation of a form letter that NAR made up, posted on its website, and motivated its 1.
This letter praised the competitive nature of the realty market. Commenters utilizing this kind highlighted regional competitors between private representatives as an impressive example of strenuous competition to which the remainder of the economy must strive - how long does it take to get real estate license. In addition, they claimed that the tens of countless brokerages, more than 2 million certified genuine estate specialists, and numerous organization models across the country provide consumers with a lot of choice.
realtor.org/law_and_policy/mls/ild/regulator_letters. html) for more details on the association's directions and recommended material. 174. NAR, Public Remark 208, at 1 (remark). 175. Id. at 2. 176. Blann, Public Comment 250, at 1. However see NAR 2006 SURVEY, supra note 4, at 74 (69% of sellers contacted just one agent; 74% of sellers discovered their agent through either a referral or a prior relationship with the agent).
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Reppert, Public Remark 294, at 1. See likewise Tradii, Public Remark 340, at 1; Wharton, Public Comment 179, at 1. 178. See, e. g., Earman, Public Comment 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 10 years from 3% to about 2.
179. Paulsen, Public Comment 364, at 1. Several panelists and commenters mentioned 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 Comment 254, at 1. 181. Id. at 1. 182. Dwyer, Public Comment 55, at 1.
There are a variety of alternatives available to buyers and sellers from complete representatives to very minimal service representatives with a variety of cost structures."); Large, Public Remark 241, at 1 (" our average commission per deal side has dropped 13% this year compared to in 2015 as an outcome of competitors from discount rate 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 percentage of the home prices that the broker keeps as a commission, and commission "charges" are the total dollar quantity paid by https://arthurikog.bloggersdelight.dk/2022/08/09/some-of-what-is-due-diligence-in-real-estate/ consumers for genuine estate brokerage services.
185. Weicher, supra note 167, at 121. what can i do with a real estate license. 186. NAR a sensible source of commission data, provided its size and access to MLS information through its local associations does not study or report commission rates. A NAR economic expert described at the workshop that any average commission rate reported by a popular entity such as NAR might be used by market participants as a focal point for collusion on commission rates.
at 225-26. See also NAR, Public Comment 208, at 12 (comment) (" [NAR] does not carry out research on commission rates out of issues that the research results have the impact of setting a 'focal point' for practitioners to set their commissions."). 187. Weicher, supra note 167, at 124. Weicher's computations use typical house prices, not typical home list 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 ending Dec. 31, 2006, available at http://www. sec.gov/ Archives/edgar/data/ 1355001/000095012307003335/e31090e10vk. htm #tocpage. 192. A detailed review of the empirical research carried out in the genuine 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 PROPERTY FINANCE AND ECONOMICS 47 (2004 ); John D. Benjamin, G. Donald Jud & G. Stacy Sirmans, What Do We Understand About Real Estate Brokerage?, 20 JOURNAL OF PROPERTY RESEARCH STUDY 5 (2000 ). 193. 1983 FTC PERSONNEL 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 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 reduces the commission rate by about 0. 5 percentage 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.
/real-estate-agent-2866537-FINAL-6597bd9583b2470abbb7267d9c90a67b.png)
2006) [hereinafter "HUD REPORT"], available at http://www. huduser.org/periodicals/ushmc/fall06/USHMC_Q306. pdf. At that price, the research study's analytical outcomes forecast a corresponding commission rate of 6. 25%, leading to a commission cost 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 (omitting 5 locations with insufficient observations for brand-new houses, in 59 percent of the staying market areas the mean commission rate paid was statistically substantially higher for existing homes 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 substantial at the one percent level for each of the equations evaluated. See id. at 83. However, Weicher keeps in mind that the magnitude of the list prices effect appears to be small. See Weicher, supra note 167, at 121 (" Goolsby and Childs discover that the commission rate declines about 0.
11 percentage points for wesley financial group careers each $10,000 increase in home price, e. g., from 5. 90 percent to 5. 84 or 5. 79 percent."). 208. Goolsby & Childs, supra note 205, at 85. Given that the authors only observed the cooperative commission rate, they note that their conclusion rests on the presumption 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 Competitors, 41 JOURNAL OF URBAN ECONOMICS 102 (1997 ). This research study obviously incorporates the information and pertinent findings of an earlier 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 analyzing how the contract commission rate was affected by various market conditions and housing variables. As the authors discuss, the commission rate recorded in the sample is "the agreement rate and therefore does not reflect any modification or changes that might be renegotiated in between your house seller and the representative at the time of sale." Id.
213. While it is not possible to quantify the relative inflexibility based upon info 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.