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Explaining Variation in Title Charges: A Study of Five Metropolitan Residential Real Estate Markets

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  • Robert Feinberg
  • Daniel Kuehn
  • Signe-Mary McKernan
  • Doug Wissoker
  • Sisi Zhang

Abstract

Title charges are costs that are related to establishing and insuring title in a real estate transaction. These charges vary considerably and include title insurance premiums and other fees involved in closing a mortgage loan. This study analyzes the variation in title charges using data from almost 3,000 FHA-insured, 30-year fixed-rate home purchase loans in five metropolitan areas. Even after controlling for cost-related and other characteristics, more than one-half of the variation in title charges remains unexplained in four of the five markets. Substantial differences in charges between settlement agents suggest that consumers would benefit by shopping for settlement services. Copyright Springer Science+Business Media New York 2015

Suggested Citation

  • Robert Feinberg & Daniel Kuehn & Signe-Mary McKernan & Doug Wissoker & Sisi Zhang, 2015. "Explaining Variation in Title Charges: A Study of Five Metropolitan Residential Real Estate Markets," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 46(2), pages 145-167, March.
    • Handle: RePEc:kap:revind:v:46:y:2015:i:2:p:145-167
    DOI: 10.1007/s11151-014-9441-0
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    References listed on IDEAS

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    1. James M. Lacko & Janis K. Pappalardo, 2010. "The Failure and Promise of Mandated Consumer Mortgage Disclosures: Evidence from Qualitative Interviews and a Controlled Experiment with Mortgage Borrowers," American Economic Review, American Economic Association, vol. 100(2), pages 516-521, May.
    2. Harold W. Elder & Leonard V. Zumpano & Edward A. Baryla, 2000. "Buyer Brokers: Do They Make a Difference? Their Influence on Selling Price and Search Duration," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 28(2), pages 337-362.
    3. Dwight Jaffee, 2006. "Monoline Restrictions, with Applications to Mortgage Insurance and Title Insurance," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 28(2), pages 83-108, March.
    4. Susan E. Woodward & Robert E. Hall, 2010. "Consumer Confusion in the Mortgage Market: Evidence of Less Than a Perfectly Transparent and Competitive Market," American Economic Review, American Economic Association, vol. 100(2), pages 511-515, May.
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