Decisions in the property valuation process

All decisions in a property valuation—such as the valuation method, the choice of data and the application of valuation parameters—are made by humans and are therefore subject to human decision-making characteristics such as cognitive biases. These have a significant impact on the accuracy and overall quality of property valuations, as numerous studies have shown. However, the results of this research have not yet found their way into valuation standards or textbooks. In particular, a process description with an explicit specification of the decisions to be made is lacking. This is problematic because a bad process can lead to bad results, i.e., inaccurate values. A good process, on the other hand, creates awareness of the decision situation, helps to analyse the situation and provides guidance on the best course of action. The overall aim of this paper is to improve the quality of property valuations by identifying and classifying the key decisions in the valuation process and proposing an improved valuation process. To achieve this goal, the authors have analysed not only the current valuation literature, but also literature from Total Quality Management and other fields. Interviews were also conducted with valuers.