Complexity in valuation practice: an inquiry into valuers’ perceptions of task complexity in the Dutch real estate market

Abstract

The aim of this paper is to examine valuer judgement behaviour, by exploring the manifestation of task complexity in Dutch commercial valuation practice. For this purpose, we adopted a grounded theory approach and undertook 18 in-depth interviews with senior valuation professionals across the Netherlands. Our findings indicate a strong presence of situational task complexity in commercial valuation practice, as professionals operating in large valuation teams perceive different elements of task complexity throughout commercial valuation practice in comparison to peers working in small valuation teams or self-employed valuers. Further, coping strategies used to deal with task complexity vary substantially by type of valuer as well. From our data, we deducted three types of task environment constructs in which valuers operate, which basically represent the various levels of professional standards required by clients as well as organisational settings composed to meet client standards. As such, we found that task environment settings strongly coincide with perceptions of task complexity. The presence of situational task complexity in commercial real estate valuation practice points to the need for customisation of professional valuer's development programs to facilitate valuers to deal with task complexity in different stages of valuation practice and hence contribute to advancing valuer judgement skills.

How client attachment affects information verification in commercial valuation practice

“…The three cases involve practical work situations in different stages of valuation practice (i.e. input/process/output stage) and are based on prior research on valuer's perception of task complexity (Klamer et al, 2018). The respondent is required to select one (out of three) recurring answer modes in each case.…”

Today's Market Needs Modernized Property Appraisers

“…Development of a flexible suite of professional qualifications and educational programs (RICS, 2015;Wilkinson, et al, 2017). The specific knowledge and skills that are essential on the modern real estate market can be identified based on the results of research studies examining property valuers in Australia (Wilkinson, et al, 2018), the Netherlands (Klamer, et al, 2018), Poland and Lithuania (Źróbek, et al, 2016). The preparation of programs for training and improving the knowledge and skills of real estate professionals is a key task if representatives of these professions are to meet current and future expectations (Hannah, 2006;Hughes & Hughes, 2013).…”

“…The requirements for candidates to obtain full qualifications of real estate appraisers are quite strict and often differ from country to country (Lorenz, 2006;Act, 1997;Adair, et al, 2012;Mooya, 2015;Act, 2012). According to some authors, professional development should not be structured as a one-size-fits-all educational program, as the valuation profession, at least in the Netherlands is a heterogenic population that deals with task complexity issues at different levels and in different settings (Klamer, et al, 2018).…”

Urban development and cooperation games

“…Much intrinsic knowledge and 'gut feelings' goes into human decision-making, and gut feelings are based on predictable heuristics (Kahneman & Tversky, 1984). Real estate scholars investigate for instance how heuristics cause risk (Wofford, Troilo, & Dorchester, 2010), affect risk perceptions (Dittmann, 2014), which in turn affect housing prices (Freybote & Fruits, 2015), and which settings push decision makers to lean on heuristics (Klamer, Bakker, & Gruis, 2018). While heuristics are often reasonable and can lead to better outcomes when decision makers face uncertainty, they will occasionally lead to solutions that are suboptimal at an individual or social level: As subconscious biases, they will influence decisions independently of applicability in a given situation.…”