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Awareness of Independence of Real Estate Appraisers: An Empirical Analysis

Author

Listed:
  • Hsueh-Fei Liao

    (National Taipei University)

  • Nan-Yu Chu

    (Feng Chia University)

  • Chien-Wen Peng

    (National Taipei University)

Abstract

Previous studies on the impact of clients on real estate appraisals have been limited in terms of their research method and selection of variables. They have been unable to effectively measure the impact of clients on the behavior of appraisers, and also neglected the influence of appraisers on their own behavior. The objective of this study is to therefore focus on real estate appraisers in Taiwan by investigating their awareness of appraiser independence and the factors that influence such independence through a questionnaire survey. The results show that appraisers generally agree that they are highly independent of the decision regarding the final appraisal, but the actual appraisal may be affected by the behavior of the client. The most critical factors that affect the awareness of appraiser independence of appraisers are the size of the appraising company, impact of the behavior of other appraisers, and extent to which appraisers are affected by industry regulations. Accordingly, we recommend building an external environment to make independent appraisals and a third party who plays an intermediary role during the process of appointment to reduce the pressure by clients on appraisers.

Suggested Citation

  • Hsueh-Fei Liao & Nan-Yu Chu & Chien-Wen Peng, 2018. "Awareness of Independence of Real Estate Appraisers: An Empirical Analysis," International Real Estate Review, Global Social Science Institute, vol. 21(3), pages 295-316.
    • Handle: RePEc:ire:issued:v:21:n:03:2018:p:295-316
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    References listed on IDEAS

    as
    1. 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.
    2. Neil Crosby & Colin Lizieri & Patrick McAllister, 2010. "Means, motive and opportunity? Disentangling client influence on performance measurement appraisals," Journal of Property Research, Taylor & Francis Journals, vol. 27(2), pages 181-201, April.
    3. Fong Yao Chen & Shi Ming Yu, 2009. "Client influence on valuation: does language matter?," Journal of Property Investment & Finance, Emerald Group Publishing Limited, vol. 27(1), pages 25-41, February.
    4. Pat McAllister & Andrew Baum & Neil Crosby & Paul Gallimore & Adelaide Gray, 2003. "Appraiser behaviour and appraisal smoothing: some qualitative and quantitative evidence," Journal of Property Research, Taylor & Francis Journals, vol. 20(3), pages 261-280, January.
    5. 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.
    6. Paul Gallimore & Marvin Wolverton, 2000. "The objective in valuation: a study of the influence of client feedback," Journal of Property Research, Taylor & Francis Journals, vol. 17(1), pages 47-57, January.
    7. Neil Crosby & Steven Devaney & Colin Lizieri & Patrick McAllister, 2018. "Can Institutional Investors Bias Real Estate Portfolio Appraisals? Evidence from the Market Downturn," Journal of Business Ethics, Springer, vol. 147(3), pages 651-667, February.
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    Cited by:

    1. Agnieszka Małkowska & Małgorzata Uhruska & Mateusz Tomal, 2019. "Age and Experience versus Susceptibility to Client Pressure among Property Valuation Professionals—Implications for Rethinking Institutional Framework," Sustainability, MDPI, vol. 11(23), pages 1-23, November.
    2. Mei-Hsing Lee & Chien-Wen Peng & Hsueh-Fei Liao, 2020. "An Analysis of Objectivity in the Real Estate Appraisal Process," International Real Estate Review, Global Social Science Institute, vol. 23(4), pages 483-504.

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    More about this item

    Keywords

    Real Estate Appraisal; Client Influence; Awareness of Appraiser Independence; Herding Behavior;
    All these keywords.

    JEL classification:

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

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