The authors did not identify 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 remarks sent to the Agencies in reaction to their ask for public comments were some variation of a type letter that NAR how to get out of a timeshare contract made up, published on its website, and encouraged its 1.
This letter applauded the competitive nature of the realty industry. Commenters using this kind highlighted regional competition in between private representatives as an exceptional example of extensive competitors to which the remainder of the economy ought to aspire - how to become a real estate developer. In addition, they claimed that the 10s of countless brokerages, more than two million licensed realty how timeshare works professionals, and numerous business models across the nation supply consumers with a lot of option.
realtor.org/law_and_policy/mls/ild/regulator_letters. html) for more information on the association's instructions and suggested material. 174. NAR, Public Comment 208, at 1 (remark). 175. Id. at 2. 176. Blann, Public Remark 250, at 1. But see NAR 2006 SURVEY, supra note 4, at 74 (69% of sellers contacted just one representative; 74% of sellers discovered their agent through either a recommendation or a previous relationship with the representative).
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Reppert, Public Comment 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 dropped over the last ten years from 3% to about 2.
179. Paulsen, Public Remark 364, at 1. Numerous panelists and commenters cited Genuine Trends price quotes of commission rates. See, e. g., Kunz, Tr. at 81-82; Lewis, Tr. at 172; NAR, Public Remark 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 readily available to purchasers and sellers from complete representatives to extremely limited service representatives with a variety of fee 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 competition from discount rate brokerage company 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 prices that the broker maintains as a commission, and commission "fees" are the total dollar quantity paid by consumers genuine estate brokerage services.
185. Weicher, supra note 167, at 121. how much do real estate agents make per sale. 186. NAR a logical source of commission data, given 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 prominent entity such as NAR might be utilized by market participants as a centerpiece for collusion on commission rates.
at 225-26. See likewise NAR, Public Remark 208, at 12 (comment) (" [NAR] does not carry out research study on commission rates out of concerns that the research outcomes have the result of setting a 'focal point' for specialists to set their commissions."). 187. Weicher, supra note 167, at 124. Weicher's computations use average home prices, not mean home prices.
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Id. 189. See Hearing, supra note 1, at 5 (testament of David G. Wood), readily 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, readily available at http://www. sec.gov/ Archives/edgar/data/ 1355001/000095012307003335/e31090e10vk. htm #tocpage. 192. A thorough review of the empirical research conducted in the genuine estate 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 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 REAL ESTATE RESEARCH 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, Expenses and Rates of House Brokerage Solutions, 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 rise in the price 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.
2006) [hereinafter "HUD REPORT"], readily available at http://www. huduser.org/periodicals/ushmc/fall06/USHMC_Q306. pdf. At that price, the research study's analytical results predict a corresponding commission rate of 6. 25%, causing a commission charge of $4,550. A house 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 (omitting five areas with insufficient observations for new homes, in 59 percent of the staying market areas the mean commission rate paid was statistically significantly higher 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 significant at the one percent level for each of the equations tested. See id. at 83. Nevertheless, Weicher notes that the magnitude of the sales price impact seems small. See Weicher, supra note 167, at 121 (" Goolsby and Childs discover that the commission rate declines about 0.
11 portion points for each $10,000 boost in house rate, e. g., from 5. 90 percent to 5. 84 or 5. 79 percent."). 208. Goolsby & Childs, supra note 205, at 85. Since the authors only observed the cooperative commission rate, they note 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 research study obviously includes the data and appropriate findings of an earlier research 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 carried out regressions analyzing how the contract commission rate was affected by numerous market conditions and housing variables. As the authors describe, the commission rate recorded in the sample is "the contract rate and for that reason does not reflect any change or changes that might be renegotiated in between what happens if you stop paying on your timeshare your home 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, 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.