Real estate appraisal and subjectivity
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abstract
The discretionally and the appraisers’ subjectivity that characterize
traditional real estate valuation are still allowed to take part in the formation
of the asset price even when respecting international standards (EVS, IVS) or
Appraisal Institution´s regulations (TEGOVA, RICS, etc.).
The application of econometric and statistical methods to real estate
valuation (especially on mass appraisals that comprehend a huge amount of
data) aims at the elimination of subjectivity on the appraisal process. But the
unanswered questions underneath this subject are the following: In what
consists the subjective component on real estate appraisal value formation?
How much is the value presented by the appraiser influenced by the
economic environment or by the building or neighborhood social status?
What are the inherent and exterior factors that concur to the enhancement of
the subjective component on real estate price formation?
In this study an overview across appraisal’s bibliography is made in order to
determine which real estate inherent and exterior factors are more important
on price formation.
