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The Economic Role and Emergence of Professional Valuers in Real Estate Markets

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  • Stephan Bartke

    (Department of Economics, UFZ—Helmholtz Centre for Environmental Research, 04318 Leipzig, Germany
    German Environment Agency, 06844 Dessau-Rosslau, Germany)

  • Reimund Schwarze

    (Department of Economics, UFZ—Helmholtz Centre for Environmental Research, 04318 Leipzig, Germany
    Faculty of Economics (Wiwi), European University Viadrina, 15230 Frankfurt/Oder, Germany)

Abstract

Land is a scarce resource. It is usually traded as real estate, an economic good with a market value. Often, this market value is not negotiated simply between the seller and the potential buyer, but is based on an assessment performed by a professional valuer, known as a surveyor or appraiser. This article questions the economic role and the emergence of valuers in real estate markets. An institutionally embedded framework for valuation intermediation is developed that elucidates a multi-tiered imperfect information cascade. First, valuers are understood as middlemen, counteracting information uncertainties regarding product quality, namely real estate herein. An additional constraint is constituted by information asymmetries between the valuer and the contractor. The contribution presents a conceptual integration of theories of price formation (and regulation) and theories of intermediation. Investigating new institutional economics concepts considering the emergence of professional associations and the specific formal and informal regulation of nature-related transactions, the contribution then discusses how the valuation professional with regularizations evolves as a superior institutional response to this cascade of information imperfections.

Suggested Citation

  • Stephan Bartke & Reimund Schwarze, 2021. "The Economic Role and Emergence of Professional Valuers in Real Estate Markets," Land, MDPI, vol. 10(7), pages 1-20, June.
    • Handle: RePEc:gam:jlands:v:10:y:2021:i:7:p:683-:d:583778
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    1. Agnieszka Ma³kowska & Ma³gorzata Uhruska, 2022. "Factors affecting SMEs growth: the case of the real estate valuation service industry," Oeconomia Copernicana, Institute of Economic Research, vol. 13(1), pages 79-108, March.

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