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. Approximately half of the public remarks submitted to the Agencies in action to their demand for public comments were some variation of a kind letter that NAR composed, posted on its website, timeshare attorneys of america and encouraged its 1.
This letter praised the competitive nature of the realty industry. Commenters utilizing this form highlighted local competition between private agents as an exceptional example of strenuous competitors to which the rest of the economy should strive - how to make money in real estate with no money. In addition, they declared that the tens of thousands of brokerages, more than two million licensed property professionals, and various service models across the country provide customers with a fantastic offer of option.
realtor.org/law_and_policy/mls/ild/regulator_letters. html) for more information on the association's directions 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 contacted only one agent; 74% of sellers found their representative through either a recommendation or a previous relationship with the representative).
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Reppert, Public Comment 294, at 1. See likewise Tradii, Public Comment 340, at 1; Wharton, Public Comment 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 actually dropped over the last 10 years from 3% to about 2.
179. Paulsen, Public Comment 364, at 1. Numerous panelists and commenters mentioned Real Trends 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 readily available to buyers and sellers from complete representatives to very minimal service agents with a variety of cost structures."); Large, Public Remark 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 service 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 house sales cost that the broker retains as a commission, and commission "charges" are the total dollar amount paid by consumers for 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 data 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 popular entity such as NAR might be used by market participants as a focal point for collusion on commission rates.
at 225-26. See likewise NAR, Public Comment 208, at 12 (remark) (" [NAR] does not carry out research on commission rates out of issues that the research study 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 home sales prices, not typical home list prices.
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Id. 189. See Hearing, supra note 1, at 5 (testimony of David G. Wood), Look at this website 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, 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 Realty Research Study, 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 Realty Brokerage?, 20 JOURNAL OF REALTY 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 Prices 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 rate of the house decreases the commission rate by about 0. 5 percentage points"). The typical sales price 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 rate, the research study's analytical results anticipate a matching commission rate of 6. 25%, resulting in a commission cost of $4,550. A home 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 brand-new homes, in 59 percent of the remaining market areas the mean commission rate paid was statistically significantly greater 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 formulas evaluated. See id. at 83. Nevertheless, Weicher notes that the magnitude of the sales cost impact seems small. See Weicher, supra note 167, at 121 (" Goolsby and Childs find time share vacation that the commission rate declines about 0.
11 percentage 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 just observed the cooperative commission rate, they note 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 Rates under Competition, 41 JOURNAL OF URBAN ECONOMICS 102 (1997 ). This study obviously includes the information and appropriate 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 performed regressions examining how the contract commission rate was impacted by various market conditions and real estate variables. As the authors discuss, the commission rate caught in the sample is "the contract rate and for that reason does not reflect any adjustment or modifications that might be renegotiated in between your home seller and the representative at the time of sale." Id.
213. While it is not possible to measure the relative inflexibility based upon info reported by the authors, extra details can be used to calculate 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.