Client influence on valuation: does language matter?

Abstract

PurposeThe purpose of this paper is to attempt to analyze client influence on valuation in both Taiwan and Singapore. Both countries are chosen because of the similar level of economic development as well as professionalism amongst valuers. However, although both are Chinese‐dominated by population, the culture and language used are substantially different.Design/methodology/approachThe study uses a survey questionnaire to sample valuers' response to client influence in both Taiwan and Singapore. The questionnaire is organized into five parts: social economic data, client influence situation, potential factors, influence method, and influence abilities. The survey findings were analyzed using SPSS and subjected to a number of standard procedures to check for missing values and multivariate normality. Mean difference and F‐test were used to judge whether the valuers in the two countries have significantly different views on client influence.FindingsThe results show that client influence on valuation practices does exist in both Taiwan and Singapore. This is despite the differences in the market structures, development background and modes of doing business. Furthermore, the study finds that the degree and extent of the problem are different. These differences, as reflected in the differing views and opinions on the causes and factors leading to client pressure, are largely due to the systemic differences in the two countries, particularly, in the way businesses are conducted as well as the medium of communication being used.Originality/valueThe paper contributes to the research on client influence on valuation through a comparative study of two countries with substantially different business environments and language of communication. These differences seem to have an impact on how valuers view client influence despite their similar economic, educational and professional backgrounds.

Age and Experience versus Susceptibility to Client Pressure among Property Valuation Professionals—Implications for Rethinking Institutional Framework

“…Wolverton [34] has interpreted the positive impact of valuer affiliation with the firm offering consulting services on coercive client pressure as the result of probable internal conflicts of interest in these kinds of firms. A partly opposite conclusion can be drawn from the studies by Chen and Yu [41], in which the investigated valuers in Taiwan indicated that multiservice companies providing broader consultancy services are better at resisting client pressure. According to research by Liao, Chu, and Peng [43] in Taiwan, company size in practice weakens the independence of appraisals as a consequence of the pressure under which large appraisal companies perform.…”

“…They point at the client as a major party dictating the circumstances under which the property is valued. So far, studies verifying this belief have been conducted only in a few countries: New Zealand [28,29], the USA [9,[30][31][32][33][34][35], the UK [5,10,30,36,37], Nigeria [38][39][40], Singapore [41,42], Taiwan [41,43], and Malaysia [44]. To the best of our knowledge, there is only one published work (see [45]) relating to the impact of client pressure on Polish valuers; however, the survey method used to identify biased valuations seems debatable.…”

High-impact information types on market value: property appraisers’ information sources and assessment confidence

“…Moreover, the study showed that most appraisers' confidence in their valuations grew with greater access to information. Chen and Yu (2009) also found that as property appraisers' local knowledge and experience increased, so too did their confidence and ability to resist client influence. Lim et al (2006) found differences between the Chinese and Hong Kong territories in the use of information and in appraisal behaviour related to client influence and access to market information.…”

“…Depending on the purpose of the appraisal (for use as collateral for obtaining credit or preparing annual accounts), clients may want a higher or lower estimate of the property's value. Previous research (Chen & Yu, 2009;Levy & Schuck, 1999 suggests that clients have 'information power' , meaning that their information can bias the appraisal. Levy and Schuck (2005) distinguish between information power and expert power as means of influence by defining information power as clients' control over information relevant to valuations and expert power as clients' expertise in property and the practice of valuation.…”

“…This article uses seven of these constructs based on previous property research (Chen & Yu, 2009;French & Gabrielli, 2005;Levy & Schuck, 2005;Nordlund, 2008;Tidwell & Gallimore, 2014): (1) information comes, to a small-large extent, from the property owner, (2) assessment is based, to a small-large extent, on property-specific information, (3) assessment is based, to a small-large extent, on market-specific information, (4) information is slightly-highly reliable, (5) information is difficult-easy to assess, (6) assessment requires many-few second opinions and (7) information has little-major impact on the property's estimated market value. Each construct is ranked on a 7-point Likert-type scale with endpoints at 1 and 7 (cf.…”