Explaining Variation in Title Charges: A Study of Five Metropolitan Residential Real Estate Markets
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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.
KeywordsTitle insurance Real estate settlement Housing
This article is based on a report funded by the U.S. Department of Housing and Urban Development Order Number C-CHI-01027CHI-T0001. The views expressed are those of the authors and should not be attributed to the Urban Institute, its trustees, or its funders. We thank William Reid, William Reeder, Kurt Usowski, and all of HUD’s Office of Policy Development and Research staff for their helpful suggestions. The authors also thank the settlement agents, industry representatives, and title insurance experts who contributed to our understanding of the industry, as well as Larry White and two anonymous reviewers for their comments on an earlier draft.
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