The authors did not recognize 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 ask for public remarks were some variation of a type letter that NAR composed, posted on its website, and motivated its 1.
This letter applauded the competitive nature of the realty market. Commenters utilizing this kind highlighted local competition between private representatives as an outstanding example of strenuous competition to which the remainder of the economy need to strive - how to become a real estate agent in ga. In addition, they claimed that the tens of countless brokerages, more than 2 million certified realty professionals, and various company designs throughout the nation provide customers with an excellent deal of choice.
realtor.org/law_and_policy/mls/ild/regulator_letters. html) for more details on the association's guidelines and suggested material. 174. NAR, Public Remark 208, at 1 (remark). 175. Id. at 2. 176. Blann, Public Remark 250, at 1. However see NAR 2006 SURVEY, supra note 4, at 74 (69% of sellers gotten in touch with only one representative; 74% of sellers found their representative through either a referral or a previous relationship with the representative).
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Reppert, Public Remark 294, at 1. See also Tradii, Public Remark 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 Remark 200, at 1 (" My average commission has actually 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 Comment 208, at 12 (remark). 180. Lord, Public Remark 254, at 1. 181. Id. at 1. 182. Dwyer, Public Remark 55, at 1.
There are a variety of options readily available to purchasers and sellers from complete agents to really restricted service agents with a variety of charge structures."); Large, Public Remark 241, at 1 (" our average commission per deal side has actually dropped 13% this year compared to last year as a result of competitors from discount brokerage organization designs running 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 portion of the home sales price 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 to become a real estate developer. 186. NAR a rational 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 economist explained at the workshop that any typical commission rate reported by a prominent entity such as NAR might be used by industry participants as a focal point for collusion on commission rates.
at 225-26. See likewise NAR, Public Comment 208, at 12 (comment) (" [NAR] does not conduct research on commission rates out of issues that the research study results have the impact of setting a 'centerpiece' for practitioners to set their commissions."). 187. Weicher, supra note 167, at 124. Weicher's computations use average home prices, not average house 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 comprehensive review of the empirical research conducted in the realty brokerage industry is beyond the scope of this Report.
Turnbull, Trends in Realty Research, 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 PROPERTY 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 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 cost of the home reduces the commission rate by about 0. 5 portion 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"], offered at http://www. huduser.org/periodicals/ushmc/fall06/USHMC_Q306. pdf. At that cost, the research study's analytical outcomes forecast a corresponding commission rate of 6. 25%, resulting in a commission fee of $4,550. A house costing $100,000 more, or $172,000, would pay a commission rate of 5. 73%, for a commission charge of $9,901.
Carney, supra note 198, at 339 (omitting five areas with inadequate observations for new houses, in 59 percent of the remaining market locations the mean commission rate paid was statistically considerably greater for existing houses than for 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 get rid of timeshare for free finding was considerable at the one percent level for each of the equations checked. See id. at 83. Nevertheless, Weicher keeps in mind that the magnitude of the list prices impact appears to be little. See Weicher, supra note 167, at 121 (" Goolsby and Childs find that the commission rate declines about 0.
11 portion points for 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. Because 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 fixed share of the total 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 study apparently incorporates the information and appropriate findings of an earlier 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 evaluating how the contract commission rate was affected by various market conditions and housing variables. As the authors explain, the commission rate recorded in the sample is "the contract rate and for that reason does not reflect any change or modifications that might be renegotiated between your house 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, what are the best timeshare companies supplemental information can be used to compute a rough approximation. Weicher, supra note 166, at 121, reports that Sirmans and Turnbull computed an average contract commission rate of 5. 8% in Baton Rouge over the duration 1985-1987.