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Client Feedback and the Role of the Appraiser

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Abstract

Appraisers routinely work at solving ill-structured valuation problems where the normative performance criterion is an objective judgement of market value as of the valuation date. This study, theoretically grounded in the lens model of perceptual theory, investigates the effect of client feedback on appraisers’ perceptions of their role in the loan underwriting process. It investigates the extent of cognitive departure from the normative role toward perception of being a validator of pending sale prices. An instrument is devised to measure environmental perception feedback, coercive feedback and positive reinforcement of the normative performance criterion. Client feedback is found to have a significant effect on appraisers’ role perceptions and on appraisers’ perceptions of the of the lender-client’s performance criterion. Appraisers who receive a great deal of environmental perception feedback and coercive feedback are more likely to view themselves as price validators, whereas appraisers exposed to positive reinforcement of the normative performance criterion are more likely view themselves as providers of objective opinions of market value.

Suggested Citation

  • 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.
  • Handle: RePEc:jre:issued:v:18:n:3:1999:p:415-432
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    References listed on IDEAS

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    1. 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.
    2. N/A, 1991. "Appraisal," National Institute Economic Review, National Institute of Economic and Social Research, vol. 138(1), pages 3-5, November.
    3. Kerry D. Vandell, 1993. "Handing Over the Keys: A Perspective on Mortgage Default Research," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 21(3), pages 211-246.
    4. Cho, Man & Megbolugbe, Isaac F, 1996. "An Empirical Analysis of Property Appraisal and Mortgage Redlining," The Journal of Real Estate Finance and Economics, Springer, vol. 13(1), pages 45-55, July.
    5. Julian Diaz & Marvin L. Wolverton, 1998. "A Longitudinal Examination of the Appraisal Smoothing Hypothesis," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 26(2), pages 349-358.
    6. Jerry T. Ferguson, 1988. "After-Sale Evaluations: Appraisals or Justifications?," Journal of Real Estate Research, American Real Estate Society, vol. 3(1), pages 19-26.
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    Cited by:

    1. Diego Salzman, 2013. "Behavioural Real Estate," ERES eres2013_334, European Real Estate Society (ERES).
    2. Christian Weistroffer & Steffen Sebastian, 2015. "The German Open-End Fund Crisis – A Valuation Problem?," The Journal of Real Estate Finance and Economics, Springer, vol. 50(4), pages 517-548, May.
    3. Alm, James & Buschman, Robert D. & Sjoquist, David L., 2014. "Foreclosures and local government revenues from the property tax: The case of Georgia school districts," Regional Science and Urban Economics, Elsevier, vol. 46(C), pages 1-11.
    4. Alm, James & Buschman, Robert D. & Sjoquist, David L., 2011. "Rethinking local government reliance on the property tax," Regional Science and Urban Economics, Elsevier, vol. 41(4), pages 320-331, July.
    5. Jessica Shui & Shriya Murthy, 2017. "Under What Circumstances do First-time Homebuyers Overpay? – An Empirical Analysis Using Mortgage and Appraisal Data," FHFA Staff Working Papers 17-03, Federal Housing Finance Agency.
    6. James Alm & J. Sebastian Leguizamon, 2018. "The Housing Crisis, Foreclosures, and Local Tax Revenues," Working Papers 1803, Tulane University, Department of Economics.
    7. Diego A. Salzman & Remco C.J. Zwinkels, 2013. "Behavioural Real Estate," Tinbergen Institute Discussion Papers 13-088/IV/DSF58, Tinbergen Institute.

    More about this item

    JEL classification:

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

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