Investigation on Experts’ Surveys in Germany

Experts’ decisions influence appraisals. The choice of model and of data sources have a direct impact on the valuation results. In Germany, the committee of valuation experts (Gutachterausschuss) which derives the public market data is using the instrument of experts surveys regularly. Also, some private appraisers use this instrument if no data is available. The average number of participants is regularly less than 10 people. The results are used in reports and for court decisions. However, the reports do not indicate the accuracy of the survey result. Although the uncertainty of the experts cannot be quantified, the highest court in Germany accepted a subjective expert’s survey in the context of real estate appraisal in 2012.While experts’ knowledge and its influence are widely studied in international context, a research gap can be identified for the German market. To improve the use of surveys in real estate valuation the following research questions should be answered: Do the topic and structure of the survey lead to a different dispersion in the answers? Is it possible to structure the response behavior of participants by different categories?In the investigation, we collected the raw material of surveys made by the committees of valuation experts in Germany and appraisers. Firstly, the structure of the survey is investigated (clear question, available meta-information, etc.). We categorize them by the topic and structure of the survey with a content analyzes. Afterward, we derive accuracy indicators from the dispersion within each category and discuss differences within the same category of different surveys. In this discussion, we will have a look at the spatial or temporal experiences of the experts in relation to dispersion and if there are systematic biases. Based on our findings, recommendations are derived.