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Does It Cost More to Settle with a Real Estate Attorney?

Friday, January 22, 2010

Cathy Christiansen

The Real Estate Attorneys Coalition for Housing (REACH) has released the results of a new study that questions assertions made by the FTC and the Department of Justice (DOJ) that attorneys charge more than non-attorney settlement agents to close residential real estate loans.

The study, directed by a leading independent global economics and business consulting firm (CRA International), is based on a detailed survey of 1,260 residential borrowers across the country. It finds that closing costs are influenced by a wide range of factors, and that it is rare for the type of firm conducting the settlement (attorney vs. title company) to be the most important influence on costs. The results contradict the FTC and DOJ position, but are consistent with previous research performed by HUD and the VA.

The REACH study is based on a carefully designed survey, using a randomly selected, nationally representative panel of individuals who did real estate closings in 2005 and 2006. The survey was completed on-line and required the respondents to enter information from the uniform settlement statements used in their purchase of refinance transactions. The data collected was analyzed to explore how variations in the reported closing costs relate to the characteristics of the transaction, the characteristics of the borrower and the characteristics of the geographic region.

posted by: Cathy Christiansen

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