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An Analysis of Objectivity in the Real Estate Appraisal Process

Author

Listed:
  • Mei-Hsing Lee

    (National Taipei University)

  • Chien-Wen Peng

    (National Taipei University)

  • Hsueh-Fei Liao

    (National Taipei University)

Abstract

Most existing studies on the behavior of real estate appraisers focus on the issues around the independence of the appraiser. This study uses a questionnaire to measure the objectivity of real estate appraisers which involves six indicators related to the appraisal process, and divides the factors that affect the objectivity of real estate appraisers in Taiwan into four categories, namely, the opinion of the appraiser regarding the future development of the real estate appraisal industry, current real estate appraisal approaches and behavior of other appraisers, and the characteristics of real estate appraisers and their firms. The empirical results reveal that the income of appraisers relative to other professionals and public opinion in relation to the fairness of real estate appraisers are the two most important factors that affect the objectivity of real estate appraisers. Furthermore, the work experience of the appraiser, total revenue of the real estate appraisal firm, and independence of the final appraisal result all significantly and positively affect the objectivity of the real estate appraisers, and the awareness of a lack of appraisers in the market significantly and negatively affects their objectivity. These findings are helpful to the healthy development of real estate appraisal and its related industries.

Suggested Citation

  • Mei-Hsing Lee & Chien-Wen Peng & Hsueh-Fei Liao, 2020. "An Analysis of Objectivity in the Real Estate Appraisal Process," International Real Estate Review, Global Social Science Institute, vol. 23(4), pages 483-504.
    • Handle: RePEc:ire:issued:v:23:n:04:2020:p:483-504
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    References listed on IDEAS

    as
    1. Marvin L. Wolverton & Paul Gallimore, 1999. "Client Feedback and the Role of the Appraiser," Journal of Real Estate Research, American Real Estate Society, vol. 18(3), pages 415-432.
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    3. Tsong‐Yue Lai & Ko Wang, 1996. "Comparing the Accuracy of the Minimum‐Variance Grid Method to Multiple Regression in Appraised Value Estimates," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 24(4), pages 531-549, December.
    4. Donald R. Epley, 1997. "A Note on the Optimal Selection and Weighting of Comparable Properties," Journal of Real Estate Research, American Real Estate Society, vol. 14(2), pages 175-182.
    5. Julian Diaz III, 1990. "How Appraisers Do Their Work: A Test of the Appraisal Process and the Development of a Descriptive Model," Journal of Real Estate Research, American Real Estate Society, vol. 5(1), pages 1-16.
    6. Paul Gallimore & Marvin Wolverton, 2000. "The objective in valuation: a study of the influence of client feedback," Journal of Property Research, Taylor & Francis Journals, vol. 17(1), pages 47-57, January.
    7. Kerry D. Vandell, 1991. "Optimal Comparable Selection and Weighting in Real Property Valuation," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 19(2), pages 213-239, June.
    8. Hsueh-Fei Liao & Nan-Yu Chu & Chien-Wen Peng, 2018. "Awareness of Independence of Real Estate Appraisers: An Empirical Analysis," International Real Estate Review, Global Social Science Institute, vol. 21(3), pages 295-316.
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    More about this item

    Keywords

    Real Estate Appraisal; Behavior of Appraisers; Objectivity; Independence;
    All these keywords.

    JEL classification:

    • L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services

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