Awareness of Independence of Real Estate Appraisers: An Empirical Analysis

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.

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Keywords

Real Estate Appraisal, Client Influence, Awareness of Appraiser Independence, Herding Behavior

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