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

• Published in: Review of industrial organization Vol. 46; no. 2; pp. 145 - 167
• Main Authors: Feinberg, Robert M., Kuehn, Daniel, McKernan, Signe-Mary, Wissoker, Doug, Zhang, Sisi
• Format: Journal Article
• Language: English
• Published: Boston Springer 01.03.2015; Springer US; Springer Nature B.V
• Subjects: Clearance & settlement; Consumers; Costs; Economics; Economics and Finance; Fees & charges; Housing; Industrial Organization; Insurance; Insurance industry; Insurance policies; Insurance premiums; Interest rates; Kickbacks; Loans; Marketing; Markets; Metropolitan areas; Microeconomics; Rating bureaus; Real estate; Real estate market; Regression analysis; Regulation; Settlements; Shopping; Studies; Title insurance; Transaction costs; Urban areas; United States > US; Title insurance; Housing; Real estate settlement
• ISSN: 0889-938X; 1573-7160
• DOI: 10.1007/s11151-014-9441-0

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.