Deed Types, House Prices and Mortgage Interest Rates |
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Authors: | David M. Brasington Robert F. Sarama Jr. |
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Affiliation: | Economics Department, University of Cincinnati, Cincinnati, OH 45221-0371 or .;Economics Department, The Ohio State University, Columbus, OH 43210 or . |
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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. |
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