The objective in valuation: a study of the influence of client feedback

Gallimore, Paul; Wolverton, Marvin L.

doi:10.1080/095999100368010

Cited by 53 publications

(65 citation statements)

References 7 publications

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“…For instance, Cloyd and Spilker (1999) found that tax advisors, although required by professional standards and statute to produce accurate assessments, tended to overemphasise evidence supporting their clients' position. In the real estate context, Gallimore and Wolverton (2000) point out that appraisers' estimates of Market Value may be biased by the anticipated (adverse) reaction of their client. A similar point is made in relation to valuers acting as expert witnesses by Crosby, Lavers and Murdoch (1998).…”

Section: Background and Context 21 Client Influence: A Definitionmentioning

confidence: 98%

“…Of residential and commercial appraisers responding to a postal questionnaire in the US posing hypothetical client pressure to revise a valuation, 41% said that they would move their appraisal (see Worzala, 1997 andKinnard, 1998 2 ). Focusing on valuations for loan purposes, in studies of UK and US appraisers based on postal questionnaires, Gallimore and Wolverton investigated whether appraisers reframed the valuation task in response to client feedback so as to validate sale price rather than to estimate Market Value (see Gallimore, 1999 andWolverton, 2000). While they found mixed results according to whether respondents were residential or commercial appraisers, and evidence of reframing in US appraisers being associated with client feedback, they found little evidence of UK appraisers systematically reframing due to client pressure.…”

Section: Previous Researchmentioning

confidence: 99%

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Means, motive and opportunity? Disentangling client influence on performance measurement appraisals

Crosby¹,

Lizieri²,

McAllister³

2010

Journal of Property Research

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This paper investigates the extent to which clients were able to influence performance measurement appraisals during the downturn in commercial property markets that began in the UK during the second half of 2007. The sharp change in market sentiment produced speculation that different client categories were attempting to influence their appraisers in different ways. In particular, it was recognised that the requirement for open-ended funds to meet redemptions gave them strong incentives to ensure that their asset values were marked down to market. Using data supplied by Investment Property Databank, we demonstrate that, indeed, unlisted open-ended funds experienced sharper drops in capital values than other fund types in the last quarter of 2007, after the market turning point and at the time when redemptions were at their highest. These differences are statistically significant and cannot simply be explained by differences in portfolio composition. Client influence on appraisal forms one possible explanation of the results observed: the different pressures on fund managers resulting in different appraisal outcomes.

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Section: Background and Context 21 Client Influence: A Definitionmentioning

confidence: 98%

Section: Previous Researchmentioning

confidence: 99%

Means, motive and opportunity? Disentangling client influence on performance measurement appraisals

Crosby¹,

Lizieri²,

McAllister³

2010

Journal of Property Research

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“…However, no such result is found outside the USA for UK or Nigerian valuers (Amidu et al, 2008;Gallimore & Wolverton, 2000).…”

Section: Interpersonal Valuer Judgement Biasmentioning

confidence: 71%

“…In interpersonal studies, we have come across similar experimental design, as well as survey questionnaires, which are mostly used to collect self-perceptions of behaviour when confronted with for instance, client influence (see for instance, Wolverton & Gallimore, 1999;Gallimore & Wolverton, 2000;Amidu et al, 2008;Chen & Yu, 2009;Nwuba et al, 2015aNwuba et al, , 2015b. In recognition of its key advantages of generating statistical significant results and granting anonymous participation in research of delicate matters such as value revision (Gallimore, 1996), we also point to the risk of respondent unwillingness or unconsciousness to provide genuine answers as may be opportune in judgement behaviour (De Lange, Schuman, & Montesano Montessori, 2016).…”

Section: Discussion Of Resultsmentioning

confidence: 99%

“…Next, we grouped relevant studies based on the research angle applied. Following Gallimore and Wolverton (2000), valuer judgement bias is defined here as a deviation from prescribed information-processing valuation procedures. Based on examination of available studies, a distinction is made between two forms of valuer judgement studies:…”

Section: Data Search and Analysismentioning

confidence: 99%

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Research bias in judgement bias studies – a systematic review of valuation judgement literature

Klamer

Gruis

2017

Journal of Property Research

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a faculty of economics and Management, hu university of applied sciences, utrecht, the netherlands; b faculty of humanities, utrecht university, utrecht, the netherlands; c faculty of education, hu university of applied sciences, utrecht, the netherlands; d faculty of architecture and the Built environment, Delft university of technology, Delft, the netherlands ABSTRACT Valuation judgement bias has been a research topic for several years due to its proclaimed effect on valuation accuracy. However, little is known on the emphasis of literature on judgement bias, with regard to, for instance, research methodologies, research context and robustness of research evidence. A synthesis of available research will establish consistency in the current knowledge base on valuer judgement, identify future research opportunities and support decision-making policy by educational and regulatory stakeholders how to cope with judgement bias. This article therefore, provides a systematic review of empirical research on real estate valuer judgement over the last 30 years. Based on a number of inclusion and exclusion criteria, we have systematically analysed 32 relevant papers on valuation judgement bias. Although we find some consistency in evidence, we also find the underlying research to be biased; the methodology adopted is dominated by a quantitative approach; research context is skewed by timing and origination; and research evidence seems fragmented and needs replication. In order to obtain a deeper understanding of valuation judgement processes and thus extend the current knowledge base, we advocate more use of qualitative research methods and scholars to adopt an interpretative paradigm when studying judgement behaviour.

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Research review

Adair

2001

Briefings Real Est Finance

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The aim of the Research review is to focus on current academic research which contributes to and enhances professional practice. The objective is to provide the busy practitioner with a synopsis of leading edge research in the area and hopefully to stimulate a desire for greater understanding and application of knowledge and techniques that will enhance professional practice.Four papers on the topic of option pricing are reviewed in this research review. The themes covered include:. What are real options in real estate development? . The pricing of real options . Optimal timing of real estate development under uncertainty . The value of waiting to invest Real options are important in property decision making as sometimes land may be left undeveloped because the site is more valuable for future development rather than being developed now. Titman (1985) highlighted the classic case of under-utilised parking lots in Los Angeles. From an option theory perspective the decision to withhold development on a highly valuable site is not irrational. Rather it could be shown to be economically sustainable in view of an unpredictable and volatile market. The rationale is that the potential of the site can be maximised by keeping the development option alive, which is more valuable than constructing a building at the current time.Real estate in general and property development in particular operate under conditions of uncertainty. A vacant site may be viewed as an option to purchase one of a number of different potential buildings at exercise prices that are equal to the respective construction costs. Thus the right to commence or delay construction, to abandon or continue development, to expand or contract operations is a valuable right. In this context real estate professionals are therefore familiar with real options. From a financial perspective an option is a contract in which the issuer/seller transfers to the buyer the right, for a certain sum of money, to buy from/sell to the issuer a specified number of assets at a fixed price or exercise price within a specified period. A right to buy is termed a call option while a right to sell is a put option. Real options are embedded implicitly in strategic investments decision making.While the real options literature related to finance has developed over the last decade its application to property has been rather limited, reflecting the tension between traditional valuation Alastair Adair is Professor of Property Investment and Head of the School of the Built Environment, University of Ulster.

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The objective in valuation: a study of the influence of client feedback

Cited by 53 publications

References 7 publications

Means, motive and opportunity? Disentangling client influence on performance measurement appraisals

Means, motive and opportunity? Disentangling client influence on performance measurement appraisals

Research bias in judgement bias studies – a systematic review of valuation judgement literature

Research review

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