Is There A Link Between Valuer Behaviour And Negligent Valuations?

This paper is based on extensive empirical research into commercial valuation practice in the UK. This research involved an analysis of valuation practice and procedure, long structured interviews with senior valuation professionals and experimental work with practising commercial valuers. It investigated the hypothesis that there was a link between valuer behaviour, the valuers relative familiarity with the geographical location where the property to be valued is located, and negligent valuations. This hypothesis was developed from an analysis of negligence cases and a survey of senior commercial valuers both of which strongly supported the link between negligent valuations and the familiarity of the valuer with the location. The mechanism that led otherwise competent valuers to fail in their task was, however, unclear from these sources. It was hypothesised a possible mechanism was that valuers miss-applied successful task completion strategies developed in familiar locations resulting in a greater risk of valuation failure in unfamiliar locations. The research findings supported most aspects of the research hypothesis. The experimental work and the practice survey illustrated that valuers do adopt a schema, or standard decision making strategy in carrying out valuation tasks. This schema commonly involves the adoption of an anchoring and adjustment strategy. This strategy was applied even where the valuer was unfamiliar with the location where the valuation took place. This strategy could be related to the resulting high levels of variance exhibited in the final valuation.