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Article
Publication date: 6 February 2009

Fong Yao Chen and Shi Ming Yu

The purpose of this paper is to attempt to analyze client influence on valuation in both Taiwan and Singapore. Both countries are chosen because of the similar level of…

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1135

Abstract

Purpose

The purpose of this paper is to attempt to analyze client influence on valuation in both Taiwan and Singapore. Both countries are chosen because of the similar level of economic development as well as professionalism amongst valuers. However, although both are Chinese‐dominated by population, the culture and language used are substantially different.

Design/methodology/approach

The study uses a survey questionnaire to sample valuers' response to client influence in both Taiwan and Singapore. The questionnaire is organized into five parts: social economic data, client influence situation, potential factors, influence method, and influence abilities. The survey findings were analyzed using SPSS and subjected to a number of standard procedures to check for missing values and multivariate normality. Mean difference and F‐test were used to judge whether the valuers in the two countries have significantly different views on client influence.

Findings

The results show that client influence on valuation practices does exist in both Taiwan and Singapore. This is despite the differences in the market structures, development background and modes of doing business. Furthermore, the study finds that the degree and extent of the problem are different. These differences, as reflected in the differing views and opinions on the causes and factors leading to client pressure, are largely due to the systemic differences in the two countries, particularly, in the way businesses are conducted as well as the medium of communication being used.

Originality/value

The paper contributes to the research on client influence on valuation through a comparative study of two countries with substantially different business environments and language of communication. These differences seem to have an impact on how valuers view client influence despite their similar economic, educational and professional backgrounds.

Details

Journal of Property Investment & Finance, vol. 27 no. 1
Type: Research Article
ISSN: 1463-578X

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Article
Publication date: 1 August 1995

Terry Boyd

The approaches used by valuers in assessing the market value ofinvestment property are explained with reference to a survey ofpractising valuers in Australia. The survey…

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1701

Abstract

The approaches used by valuers in assessing the market value of investment property are explained with reference to a survey of practising valuers in Australia. The survey examined the profile of the valuers, their interpretation of market value in a volatile market and details of the valuation methodology used for urban investment property. Identifies the cross‐tabulations between valuation qualifications, experience and methodology. The need for greater market research and a specialist group of valuers with sound cash flow analysis skills to undertake major urban investment valuation are proposed.

Details

Journal of Property Valuation and Investment, vol. 13 no. 3
Type: Research Article
ISSN: 0960-2712

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Article
Publication date: 1 April 1986

STUART GRONOW and IAN SCOTT

Expert systems are currently being developed in many and varied professions. A major problem however is the extraction of knowledge from the required expert in order that…

Abstract

Expert systems are currently being developed in many and varied professions. A major problem however is the extraction of knowledge from the required expert in order that it can be represented within the system. This paper will summarise the problems of knowledge elicitation, outline the methods currently used to acquire expert knowledge and describe the method we have refined from these general principles as the most suitable for ‘capturing’ the expertise of a practicising residential mortgage valuer. The basis of this paper is a research project investigating the application of expert systems to the valuation of vacant possession residential properties for mortgage purposes continuing at the Polytechnic of Wales.

Details

Journal of Valuation, vol. 4 no. 4
Type: Research Article
ISSN: 0263-7480

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Article
Publication date: 26 February 2021

Georgia Warren-Myers and Lucy Cradduck

The purpose of this research is to investigate Australian property valuers' identification and consideration of physical risks to properties in valuation practice. The…

Abstract

Purpose

The purpose of this research is to investigate Australian property valuers' identification and consideration of physical risks to properties in valuation practice. The research further explores valuers' considerations of climate change-related risks.

Design/methodology/approach

The research approach comprised an online survey of Australian valuers who were members of the Australian Property Institute. The online survey included structured and unstructured questions to explore types and extent of risk investigations in valuation practice.

Findings

The analysis reflects that while valuers easily identified and engaged with physical risks, there is a lack of understanding of, and engagement with, climate change risks. This supports the need for better information sources and guidance to inform valuers of climate change risks per se, as well as the development of specific mechanisms for consideration of such risks to be included in valuation processes, practices and reports.

Research limitations/implications

The research is limited by the small sample size achieved due to the timing of the survey deployment, which occurred during the first wave of COVID-19 lockdowns in Australia. Thus, the findings are not necessarily representative of the Australian valuation profession, but they do provide indications of current approaches to risk identification in practice and the need for more guidance in relation to climate change risks.

Practical implications

This research identifies that more support, guidance, information and tools, as well as awareness-raising, are required to enable valuers to accurately identify all risks affecting a property.

Originality/value

The research provides a snapshot of current understandings of physical risk identification in valuation practice. As investors and other organisations integrate and build up their analysis of climate risks to their portfolios and organisations, this research indicates that valuers also need to be aware of changing market assessment of physical and climate risks associated with property for consideration in valuation.

Details

Journal of Property Investment & Finance, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1463-578X

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Article
Publication date: 15 February 2021

Rotimi Boluwatife Abidoye, Wei Huang, Abdul-Rasheed Amidu and Ashad Ali Javad

This study updates and extends the current work on the issue of accuracy of property valuation. The paper investigates the factors that contribute to property valuation…

Abstract

Purpose

This study updates and extends the current work on the issue of accuracy of property valuation. The paper investigates the factors that contribute to property valuation inaccuracy and examines different strategies to achieve greater accuracy in practice.

Design/methodology/approach

An online questionnaire was designed and administered on the Australian Property Institute (API) registered valuers, attempting to examine their perceptions on the current state of valuation accuracy in Australia. The variables/statements from responses are ranked overall and compared for differences by the characteristics of respondents.

Findings

Using mean rating point, the survey ranked three factors; inexperience valuers, the selection, interpretation and use of comparable evidence in property valuation exercise and the complexity of the subject property in terms of design, age, material specification and state of repairs as the most significant factors currently affecting valuation inaccuracy. The results of a Chi-square test did not, however, show a significant statistical relationship between respondents' profile and the perception on the comparative importance of the factors identified. Except for valuers' age and inexperience valuers and valuers' educational qualification and inexperience valuers and the selection, interpretation and use of comparable evidence in property valuation exercise. Also, the three highly ranked strategies for reducing the level of inaccuracy are: developing a global mindset, use of advanced methodology and training valuers on market forecasting skills.

Practical implications

In order for valuers to provide state-of-the-art service to the public and to remain relevant, there is a need to accurately and reliably estimate valuation figures. Hence, the strategies highlighted in this study could be considered in a bid to reduce property valuation inaccuracy in practice.

Originality/value

This study provides an updated overview of the issue of property valuation inaccuracy in the Australia valuation practice and examines the strategies to reduce it.

Details

Property Management, vol. 39 no. 3
Type: Research Article
ISSN: 0263-7472

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Article
Publication date: 4 December 2020

Pim Klamer, Vincent Gruis and Cok Bakker

The purpose of this paper aims to disclose shared beliefs and understandings about the concept of professionalism amongst Dutch commercial real estate valuers. It examines…

Abstract

Purpose

The purpose of this paper aims to disclose shared beliefs and understandings about the concept of professionalism amongst Dutch commercial real estate valuers. It examines prevailing logics of action in a mature European valuation industry and reflects on the potential influence of these logics on the occurrence of judgement bias in valuation.

Design/methodology/approach

The underlying study adopted a grounded theory approach to facilitate reflexive in-depth interview sessions with 20 experienced valuation professionals in the Netherlands. Emerging data on core categories of professionalism were initially identified and grouped; and subsequently conceptualised into ideal role types of valuers using institutional logics theory.

Findings

Three different ideal types appear to guide Dutch valuation practice: the expert, the service provider and the reporter. The expert emphasises professional standards and technical quality, while the service provider advocates commercial quality and the reporter aims to uphold procedural quality. The authors find that the attention for technical quality associated with the expert role may be at risk of underexposure, fostering concerns about judgement quality and associated bias risks.

Research limitations/implications

The potential impact of both commercial and bureaucratic logics on valuation quality may raise authoritative and educational concerns over judgement bias effects. However, while trends in professionalism may transcend national boundaries, the specifics of local real estate market structures and regulations require replication of results in other markets.

Originality/value

Institutional logics provide an alternative, socio-economic perspective on present-day valuer behaviour that progresses the understanding of the valuer–client relationship, thereby advancing the knowledge base on valuer judgement and client influence. Furthermore, the authors' role typology offers future research opportunities in terms of measurement and explanation of differences.

Details

Property Management, vol. 39 no. 2
Type: Research Article
ISSN: 0263-7472

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Article
Publication date: 26 September 2008

David Lorenz and Thomas Lützkendorf

The purpose of this paper is to explain the rationale for integrating sustainability issues into property valuation theory and practice and to provide initial suggestions…

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13085

Abstract

Purpose

The purpose of this paper is to explain the rationale for integrating sustainability issues into property valuation theory and practice and to provide initial suggestions for valuers on how to account for sustainability issues within valuation reports.

Design/methodology/approach

The authors emphasise the key role of valuation professionals and of the valuation process itself in achieving a broader market penetration of sustainable construction. It is explained that, on the one hand, property valuation represents the major mechanism to align economic return with environmental and social performance of property assets, and thus to express and communicate the advantages and benefits of sustainable buildings. On the other hand, it is explained that gradual changes in market participants' perceptions in favour of sustainable buildings must be reflected within the property valuation and associated risk assessment process (otherwise valuers would produce misleading price estimates). The authors identify both the financial benefits and risk reduction potential of sustainable design as well as valuation input parameters that would allow these benefits to be reflected in property price estimates.

Findings

The authors show that the main reasons for immediately and rigorously integrating sustainability issues into property valuation are as follows: more sustainable patterns of behaviour are urgently necessary to sustain the viability of the Earth's ecosystems; a huge untapped market potential exists for sustainable property investment products and consulting services; sustainable buildings clearly outperform their conventional competitors in all relevant areas (i.e. environmentally, socially and financially); neglecting the benefits of sustainable design leads to distorted price estimates; and reflecting sustainability issues in property price estimates is already possible and the validity of this decision depends solely on the valuer's capability and sophistication to explain and justify his/her assumptions within the valuation report. However, it is also shown that efforts need to be undertaken to improve the description of property assets in transaction databases in order to provide the informational databases necessary to empirically underpin a valuer's decision to assign a “valuation bonus” to a sustainable building or a “valuation reduction” to an unsustainable/conventional one.

Originality/value

The paper postulates that valuation reports should be extended to include the following additional elements: a clear description of the availability of certain sustainability‐related property characteristics and attributes; a statement of the valuer's opinion about the benefits of these characteristics and attributes; and a statement of the valuer's opinion about the impact of these benefits and/or risks on property value.

Details

Journal of Property Investment & Finance, vol. 26 no. 6
Type: Research Article
ISSN: 1463-578X

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Article
Publication date: 1 August 2001

Miles Keeping

There has been much discussion in the academic and practitioner press about the valuation of contaminated land. Most of this discussion has centred upon the various…

Abstract

There has been much discussion in the academic and practitioner press about the valuation of contaminated land. Most of this discussion has centred upon the various techniques that can be used to determine an “appropriate figure” and what the effect, if any, might be of contamination “stigma”. Despite a re‐emergence in recent times of papers discussing professional liabilities in other aspects of valuation practice (particularly concerning bank loan valuations), there has been little discussion about the possibility of negligence being committed by valuers of contaminated land. The professional body which represents most professional valuers in the UK, the Royal Institution of Chartered Surveyors (RICS) has issued guidance for the benefit of its members which attempts to clarify the complexities of law and valuation methodology which exist in this area. It has been suggested that due to the complex nature of the valuation of contaminated assets, as evidenced by the quantum of papers on this matter, many practising valuers might still not be discharging the professional duty to an adequate degree. This paper seeks to determine whether this is an accurate suggestion by verifying the existence and clarity of the guidance and then investigating both whether professional practitioners are familiar with it and implement it. Existing literature and case law are referred to in order to assist these tasks and a questionnaire survey to 400 practitioners was administered. The paper concludes that levels of valuers’ competence in this area, as measured against an objective standard, is often very low and that many valuers are possibly negligent when acting for clients with an interest in a potentially or actually contaminated site. Assessment and monitoring of professional competence in this area is recommended.

Details

Journal of Property Investment & Finance, vol. 19 no. 4
Type: Research Article
ISSN: 1463-578X

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Article
Publication date: 1 July 2006

Lay Cheng Lim, Alastair Adair, Stanley McGreal and James Webb

The paper aims to contribute to the understanding of the current valuation practices and services offered across Asia, in particular the valuation techniques and…

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2083

Abstract

Purpose

The paper aims to contribute to the understanding of the current valuation practices and services offered across Asia, in particular the valuation techniques and methodology used by practising valuers in Hong Kong.

Design/methodology/approach

In order to gain professional opinions and an in‐depth understanding of Hong Kong valuation service providers, the methods and concepts used, and the extent of involvement with Chinese clients and businesses, the paper reports the findings of interviews with major real estate valuation firms and a survey of individual valuers involved in the appraisal of properties in Hong Kong and China.

Findings

The results show that there are significant differences between the strategic management and the operational level across several facets of the valuation process in Hong Kong and China. The paper contributes to an understanding of behavioural influences within valuation.

Research limitations/implications

The main limitation is the restriction of the survey on Hong Kong‐based valuers. Further research will widen evidence to valuers based in mainland China.

Originality/value

This paper presents the results of original empirical research utilising data drawn from interviews and survey questionnaires. The value of the work lies in the analysis of the strategic overview of the organisation, management and operation of appraisal practice in Hong Kong.

Details

Journal of Property Investment & Finance, vol. 24 no. 4
Type: Research Article
ISSN: 1463-578X

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Article
Publication date: 17 August 2015

Chukwuma C. Nwuba, Uche S. Egwuatu and Babatunde M. Salawu

The purpose of this paper is to investigate client influence on mortgage valuation in Nigeria to establish and rank the means of influence clients employ, and the impact…

Abstract

Purpose

The purpose of this paper is to investigate client influence on mortgage valuation in Nigeria to establish and rank the means of influence clients employ, and the impact of firm characteristics on client influence.

Design/methodology/approach

A combination of cross-sectional survey and focus groups research designs was adopted. Questionnaire structured on five-point Likert format was used to collect data from a sample of valuation firms in five Nigerian cities. Descriptive statistics, χ2, and moderated hierarchical linear model were used for data analysis.

Findings

Clients’ means of influence on valuation are more of subtle approach than threat or coercion. The most prevalent means are respectively, plea for assistance, promise of continued retainership on banks’ valuer panels, and disclosing the loan amount. Client influence differs across cities; firm characteristics have no influence on client pressure.

Practical implications

The research provides basis for valuation bodies to review practice rules and standards and seek for legislation for valuer independence. It can serve as material for teaching and training in professional ethics.

Social implications

Biased valuations jeopardises credit risk mitigation process with potential for destabilising banks, finance sector, and consequences for the economy.

Originality/value

The study provides empirical evidence of the nature of client influence across several major Nigerian cities. In contrast to existing Nigerian studies that focus on single cities, the study covers several cities. It therefore provides a broad basis for problem-solving and decision-making.

Details

Property Management, vol. 33 no. 4
Type: Research Article
ISSN: 0263-7472

Keywords

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