The authors did not recognize the source of the U.S. commission information. See NAR, Public Remark 208, at 15-16; Delcoure & Miller, supra, at 15. 173. Around half of the general public remarks sent to the Agencies in rent my time share action to their ask for public comments were some variation of a form letter that NAR composed, posted on its site, and encouraged its 1.
This letter applauded the competitive nature of the realty industry. Commenters using this type highlighted regional competition between private representatives as an impressive example of strenuous competition to which the remainder of the economy should aspire - how to generate real estate leads. In addition, they claimed that the tens of thousands of brokerages, more than two million certified real estate specialists, and various company designs across the country offer consumers with a fantastic offer of choice.
realtor.org/law_and_policy/mls/ild/regulator_letters. html) for more information on the association's instructions and recommended content. 174. NAR, Public Comment 208, at 1 (comment). 175. Id. at 2. 176. Blann, Public Comment 250, at 1. However see NAR 2006 SURVEY, supra note 4, at 74 (69% of sellers gotten in touch with only one agent; 74% of sellers found their agent through either a recommendation or a prior relationship with the agent).
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Reppert, Public Comment 294, at 1. See likewise Tradii, Public Remark 340, at 1; Wharton, Public Remark 179, at 1. 178. See, e. g., Earman, Public Remark 73, at 1-2 (average commission is "well under 6%"); Giorgianni, Public Comment 200, at 1 (" My typical commission has dropped over the last 10 years from 3% to about 2.
179. Paulsen, Public Remark 364, at 1. A number of panelists and commenters cited Real Trends estimates of commission rates. See, e. g., Kunz, Tr. at 81-82; Lewis, Tr. at 172; NAR, Public Comment 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 options offered to purchasers and sellers from complete agents to very restricted service representatives with a wide range of cost structures."); Large, Public Comment 241, at 1 (" our average commission per transaction side has dropped 13% this year compared to last year as a result of competitors from discount brokerage service designs operating in our market").
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GAO REPORT, supra note 3, at 12. 184. As discussed in Chapter I of this Report, the commission "rate" is the percentage of the home prices that the broker retains as a commission, and commission "fees" are the total dollar amount paid by customers genuine estate brokerage services.
185. Weicher, supra note 167, at 121. what does mls stand for in real estate. 186. NAR a sensible source of commission data, offered its size and access to MLS data through its regional associations does not study or report commission rates. A NAR economic expert described at the workshop that any typical commission rate reported by a popular entity such as NAR might be utilized by market participants as a focal point for collusion on commission rates.
at 225-26. See also NAR, Public Remark 208, at 12 (remark) (" [NAR] does not perform research study on commission rates out of issues that the research outcomes have the impact of setting a 'centerpiece' for professionals to set their commissions."). 187. Weicher, supra note 167, at 124. Weicher's computations utilize average house prices, not median home sales prices.
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Id. 189. See Hearing, supra note 1, at 5 (testimony 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 evaluation of the empirical research study performed in the real estate 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 REALTY FINANCE AND ECONOMICS 47 (2004 ); John D. Benjamin, G. Donald Jud & G. Stacy Sirmans, What Do We Know About Property 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 donate my timeshare reviews 27. 9% paid 7%). 196. Id. at 48. 197. Id. at 52. 198. See Michael Carney, Expenses and Prices of House Brokerage Solutions, 10 JOURNAL OF THE AMERICAN REALTY 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 cost of the home reduces the commission rate by about 0. 5 portion 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 price, the study's analytical results anticipate a corresponding commission rate of 6. 25%, leading to 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 cost of $9,901.
Carney, supra note 198, at 339 (leaving out five areas with inadequate observations for new houses, in 59 percent of the remaining market areas the mean commission rate paid was statistically significantly higher for existing homes 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 finding was significant at the one percent level for each of the formulas tested. See id. at 83. However, 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 discover that the commission rate decreases about 0.
11 portion points for each $10,000 boost in house cost, 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 overall listing commission.
See id. at 81 n. 1. 209. See C.F. Sirmans & Geoffrey K. Turnbull, Brokerage Pricing under Competition, 41 JOURNAL OF URBAN ECONOMICS 102 (1997 ). This study apparently incorporates the information and relevant findings of an earlier research 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 analyzing how the agreement commission rate was affected by different market conditions and housing variables. As the authors Have a peek at this website explain, the commission rate caught in the sample is "the contract rate and therefore does not show any modification or changes that may be renegotiated between your home seller and the agent at the time of sale." Id.
213. While it is not possible to measure the relative inflexibility based upon info reported by the authors, additional information can be used to compute a rough approximation. Weicher, supra note 166, at 121, reports that Sirmans and Turnbull determined a typical agreement commission rate of 5. 8% in Baton Rouge over the duration 1985-1987.