The authors did not determine 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 comments submitted to the Agencies in reaction to their ask for public comments were some variation of a type Helpful hints letter that NAR made up, posted on its site, and motivated its 1.
This letter applauded the competitive nature of the genuine estate industry. Commenters utilizing this kind highlighted regional competition between specific agents as an exceptional example of extensive competition to which the remainder of the economy need to strive - how much do real estate agents make per sale. In addition, they claimed that the tens of thousands of brokerages, more than two million licensed real estate experts, and numerous service models across the country offer consumers with a terrific deal of option.
realtor.org/law_and_policy/mls/ild/regulator_letters. html) for more information on the association's guidelines and recommended content. 174. NAR, Public Remark 208, at 1 (comment). 175. Id. at 2. 176. Blann, Public Comment 250, at 1. But see NAR 2006 STUDY, supra note 4, at 74 (69% of sellers called just 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 also 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 ten years from 3% to about 2.
179. Paulsen, Public Comment 364, at 1. A number of panelists and commenters pointed out Real Trends 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 Comment 254, at 1. 181. Id. at 1. Learn more 182. Dwyer, Public Remark 55, at 1.
There are a variety of alternatives offered to buyers and sellers from full service representatives to really restricted service representatives with a wide range of fee structures."); Large, Public Remark 241, at 1 (" our typical commission per transaction side has dropped 13% this year compared to in 2015 as a result of competitors from discount rate brokerage service designs running 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 percentage of the home prices that the broker retains as a commission, and commission "fees" are the overall dollar quantity paid by consumers for genuine estate brokerage services.
185. Weicher, supra note 167, at 121. what percentage do real estate agents get. 186. NAR a logical source of commission information, provided its size and access to MLS information through its local associations does not study or report commission rates. A NAR economic expert explained at the workshop that any average commission rate reported by a popular entity such as NAR might be used by industry participants as a focal point for collusion on commission rates.
at 225-26. See also NAR, Public Comment 208, at 12 (remark) (" [NAR] does not carry out research on commission rates out of issues that the research outcomes have the effect of setting a 'focal point' for professionals to set their commissions."). 187. Weicher, supra note 167, at 124. Weicher's calculations use typical house sales rates, not mean house prices.
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Id. 189. See Hearing, supra note 1, at 5 (testament of David G. Wood), available at http://financialservices. house.gov/ media/pdf/072506dgw. pdf. 190. Id. at 6. 191. See Realogy Corporation 10-K for financial year ending Dec. 31, 2006, offered at http://www. sec.gov/ Archives/edgar/data/ 1355001/000095012307003335/e31090e10vk. htm #tocpage. 192. A detailed evaluation of the empirical research carried out in the realty brokerage industry is beyond the scope of this Report.
Turnbull, Trends in Real Estate Research Study, 1988-2001: What's Hot and What's Not, 29 JOURNAL OF REAL ESTATE FINANCE AND ECONOMICS 47 (2004 ); John D. Benjamin, G. Donald Jud & G. Stacy Sirmans, What Do We Understand About Real Estate Brokerage?, 20 JOURNAL OF REAL ESTATE RESEARCH STUDY 5 (2000 timeshare legal services ). 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 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 price of the home reduces the commission rate by about 0. 5 percentage points"). The average list prices of an existing house 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 study's statistical results forecast a matching commission rate of 6. 25%, resulting in 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 charge of $9,901.
Carney, supra note 198, at 339 (omitting five locations with insufficient observations for brand-new houses, in 59 percent of the remaining market locations the mean commission rate paid was statistically considerably higher for existing houses 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 substantial at the one percent level for each of the formulas evaluated. See id. at 83. Nevertheless, Weicher notes that the magnitude of the list prices effect appears to be small. See Weicher, supra note 167, at 121 (" Goolsby and Childs discover that the commission rate decreases about 0.
11 percentage points for each $10,000 increase in house 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 assumption 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 Pricing under Competitors, 41 JOURNAL OF URBAN ECONOMICS 102 (1997 ). This research study apparently integrates the information and pertinent 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 affected by various market conditions and housing variables. As the authors discuss, the commission rate captured in the sample is "the contract rate and therefore does not show any adjustment or changes that may 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 on information reported by the authors, extra information can be utilized to compute a rough approximation. Weicher, supra note 166, at 121, reports that Sirmans and Turnbull computed a typical contract commission rate of 5. 8% in Baton Rouge over the period 1985-1987.