Deed Types, House Prices and Mortgage Interest Rates

24 Pages Posted: 4 Aug 2008

See all articles by David M. Brasington

David M. Brasington

University of Cincinnati - Department of Economics

Robert F. Sarama

Ohio State University (OSU) - Economics

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Abstract

When houses are sold they come with a deed attached that spells out the legal guarantees on good title. Some deeds give clues about the characteristics of the seller or the house. Using a 37,043-observation house price hedonic with a Bayesian spatial error model, we find the type of deed attached to a housing sale can have a dramatic correlation with the sale price. Ten deed types command a discount, and one commands a premium relative to warranty deeds. Mortgage rates for sheriff's deeds and foreclosure deeds are lower than for warranty deeds, indicating more sophisticated buyers.

Suggested Citation

Brasington, David M. and Sarama, Robert F., Deed Types, House Prices and Mortgage Interest Rates. Real Estate Economics, Vol. 36, Issue 3, pp. 587-610, Fall 2008, Available at SSRN: https://ssrn.com/abstract=1189953 or http://dx.doi.org/10.1111/j.1540-6229.2008.00223.x

David M. Brasington (Contact Author)

University of Cincinnati - Department of Economics ( email )

Carl H. Lindner Hall 2925 Campus Green Drive
PO Box 0371
Cincinnati, OH 45221-0211
United States

Robert F. Sarama

Ohio State University (OSU) - Economics ( email )

410 Arps Hall
1945 N. High St.
Columbus, OH 43210-1172
United States

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