The authors did not determine the source of the U.S. commission data. See NAR, Public Comment 208, at 15-16; Delcoure & Miller, supra, at 15. 173. Roughly half of the general public comments sent to the Agencies in reaction to their ask for public remarks were some variation of a type letter that NAR composed, posted on its site, and motivated its 1.
This letter praised the competitive nature of the property industry. Commenters utilizing this kind highlighted regional competition in between specific representatives as an outstanding example of extensive competition to which the rest of the economy ought to strive - what is cap rate real estate. In addition, they claimed that the 10s of thousands of brokerages, more than two million certified realty experts, and different business designs across the nation offer customers with a good deal of option.
realtor.org/law_and_policy/mls/ild/regulator_letters. html) for more information on the association's directions https://travisinka627.skyrock.com/3350931950-Getting-The-What-Does-A-Real-Estate-Developer-Do-To-Work.html and recommended content. 174. NAR, Public Remark 208, at 1 (remark). 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 agent through either a recommendation or a prior relationship with the agent).
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Reppert, Public Remark 294, at 1. See also Tradii, Public Remark 340, at 1; Wharton, Public Remark 179, at 1. 178. Additional reading 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 Remark 364, at 1. Several 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 Remark 208, at 12 (comment). 180. Lord, Public Remark 254, at 1. 181. Id. at 1. 182. Dwyer, Public Remark 55, at 1.
There are a range of choices available to buyers and sellers from complete agents to really minimal service agents with a variety of charge structures."); Big, Public Comment 241, at 1 (" our typical commission per transaction side has actually dropped 13% this year compared to in 2015 as a result of competitors from discount brokerage company models 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 list prices that the broker keeps as a commission, and commission "costs" are the overall dollar quantity paid by consumers genuine estate brokerage services.
185. Weicher, supra note 167, at 121. how to make money in real estate with no money. 186. NAR a rational source of commission data, provided its size and access to MLS information through its regional associations does not study or report commission rates. A NAR economic expert explained at the workshop that any typical commission rate reported by a popular entity such as NAR might be used by market individuals as a focal point for collusion on commission rates.
at 225-26. See also NAR, Public Remark 208, at 12 (comment) (" [NAR] does not perform research on commission rates out of issues that the research study outcomes have the impact of setting a 'centerpiece' for specialists to set their commissions."). 187. Weicher, supra note 167, at 124. Weicher's estimations utilize average house sales prices, not typical house list prices.
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Id. 189. See Hearing, supra note 1, at 5 (statement 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 fiscal year ending Dec. 31, 2006, offered at http://www. sec.gov/ Archives/edgar/data/ 1355001/000095012307003335/e31090e10vk. htm #tocpage. 192. An extensive review of the empirical research conducted in the realty brokerage market is beyond the scope of this Report.
Turnbull, Trends in Real Estate Research, 1988-2001: What's Hot and What's Not, 29 JOURNAL OF PROPERTY 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 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, Expenses and Pricing of House Brokerage Services, 10 JOURNAL OF THE AMERICAN PROPERTY 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 percentage points"). The typical prices of an existing house in 1980 was $72,800. See U.S. Department of Housing and Urban Development, U.S.
2006) [hereinafter "HUD Click here for info REPORT"], offered at http://www. huduser.org/periodicals/ushmc/fall06/USHMC_Q306. pdf. At that price, the research study's statistical outcomes predict a corresponding commission rate of 6. 25%, causing a commission charge of $4,550. A home costing $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 insufficient observations for brand-new homes, in 59 percent of the remaining market locations the mean commission rate paid was statistically significantly higher 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 formulas evaluated. See id. at 83. However, Weicher notes that the magnitude of the sales cost impact seems little. See Weicher, supra note 167, at 121 (" Goolsby and Childs find that the commission rate decreases about 0.
11 portion points for each $10,000 increase in home 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 only 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 total listing commission.
See id. at 81 n. 1. 209. See C.F. Sirmans & Geoffrey K. Turnbull, Brokerage Pricing under Competitors, 41 JOURNAL OF URBAN ECONOMICS 102 (1997 ). This research study obviously includes the information and relevant findings of an earlier 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 examining how the agreement commission rate was affected by numerous market conditions and real estate variables. As the authors describe, the commission rate recorded in the sample is "the contract rate and for that reason does not show any modification or modifications that may 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 on info reported by the authors, supplemental info can be used to compute a rough approximation. Weicher, supra note 166, at 121, reports that Sirmans and Turnbull computed a typical agreement commission rate of 5. 8% in Baton Rouge over the period 1985-1987.