Deborah Levy

The influence of clients on valuations

The literature on appraisal smoothing and valuer behaviour contains frequent references to the “political pressures” faced by valuers. However, the vast majority of these are either unsubstantiated or based on anecdotal evidence or media reports. Recent research focusing on the issue of pressure similarly suffers from either a lack of formal evidence that particular sources of pressure (e.g. client) actually exist or preconceptions concerning the effect of such pressures. This paper reports on the results of a study which seeks to redress these shortcomings by identifying the non‐methodological factors that affect the values reported to, and ultimately accepted by, clients. The study consists of a series of individual in‐depth interviews with senior New Zealand Registered Valuers addressing the topic of “non‐methodological factors affecting reported values to clients”. Our results indicate that the primary factors affecting the degree to which clients influence valuations, are the type of client, the characteristics of valuers and valuation firms, the purpose of a valuation and the information endowments of clients and valuers.

Qualitative Methodology and Grounded Theory in Property Research

Abstract Much of the research published in the property discipline consists of work utilising quantitative methods. While research gained using quantitative methods, if appropriately designed and rigorous, leads to results which are typically generalisable and quantifiable, it does not allow for a rich and in-depth understanding of a phenomenon. This is especially so if a researcher’s aim is to uncover the issues or factors underlying that phenomenon. Such an aim would require using a qualitative research methodology, and possibly an interpretive as opposed to a positivist theoretical perspective. The purpose of this paper is to provide a general overview of qualitative methodologies with the aim of encouraging a broadening of methodological approaches to overcome the positivist methodological bias which has the potential of inhibiting property behavioural research.

The influence of clients on valuations: the clients' perspective

Purpose – This study aims to consider the theoretical potential for client influences to bias valuations, and assess the validity of the resulting framework by seeking input from practising valuers and commissioning clients.Design/methodology/approach – Reports upon a series of individual interviews with senior New Zealand property executives responsible for the management of large portfolios of institutional‐grade property assets.Findings – The results indicate that clients with expertise and a high level of knowledge of the property market are able to influence valuers by way of expert and information power. Opportunities to exert influence are afforded by the control the client has over the valuation process including the common practice in New Zealand of permitting clients to review draft valuations prior to their formalisation.Research limitations/implications – The general aim of this paper is to build on the theory as opposed to testing theory. In order to achieve this aim a qualitative approach wa...

The influence of family members on housing purchase decisions

Families and households make up a significant proportion of the real estate market. There is, however, little information in mainstream real estate literature on the impact of family behaviour on real estate decisions. This paper clarifies some of these issues by analysing and expanding on many of the findings from the marketing literature, in particular the topic of influence between different family members in the purchase of a new home. This paper presents some important issues to be considered when examining family decision‐making. These include the roles played by different family members and their influence at different stages of the decision‐making process. It also reports on the findings of a study involving a series of in‐depth interviews with real estate agents to determine their perception of the family decision‐making process in relation to a house purchase decision. This culminates in a conceptual framework on family decision making specifically for the purchase of residential real estate, before discussing the implications of these findings to the general real estate market, including service, promotion and valuation.

Influences and Emotions: Exploring Family Decision-making Processes when Buying a House

The decision to purchase a house is embedded within a set of economic and socio-cultural processes and is operationalized within the context of a specific local property market. In the residential mobility literature considerable attention has been given to examining issues of house prices, life-course and demographic influences on the decision to buy, but less attention has been directed to understanding the internal family decision-making process. While the act of purchasing a property constitutes a significant economic event for a family, the process of purchasing a house is an inherently social activity, involving setting goals, discussing and negotiating family needs, interacting with exchange professionals (information intermediaries), imagining modifications to potential purchases and interpreting market trends. These family activities are shaped by family structures, gender roles, ethnicity and socio-economic status. In addition, the house purchase process takes place within specific market conditions and institutional practices. For example, in New Zealand, the estate agent has a large amount of power when negotiating contracts between buyers and sellers. Using in-depth interviews, this paper examines family decision processes in Auckland from the perspective of estate agents who deal with families purchasing houses on a daily basis, and formulate their own understanding of buyer behaviour, and adult family members who have recently purchased houses. The analysis makes it possible to explore the ways in which estate agents interpret the purchasing behaviour of families and to compare these interpretations with the understandings of adult family members. The study offers insights into the ways in which families engage in search practices, interpret information and internally negotiate decisions. It is argued that the findings here contribute a greater understanding of how housing markets are performed and made.

Modern marketing research techniques and the property professional

Discusses the benefits to the property profession of pursuing a marketing philosophy in an attempt to gain a clearer understanding of how consumers perform in real‐life situations. Undertakes an empirical study using two market research techniques in an attempt to create an accurate picture of how industrialists approach the decision‐making process associated with location and relocation. The first of these is conjoint analysis and the second involves a more traditional hierarchical approach. Claims the results indicate that these techniques are inter‐related. Emphasizes the benefits to the property professional of understanding both types of analysis and stresses the need to embrace modern marketing techniques.

Residential valuation behaviour in the United States, the United Kingdom and New Zealand

This paper investigates the valuation processes employed by United States (US), United Kingdom (UK), and New Zealand (NZ) residential valuation experts. Professional appraisers from all three countries participated in a series of valuation experiments that revealed (i) switching from familiar to unfamiliar property settings did not alter valuation behaviour, (ii) valuation behaviour was consistently non-normative, and (iii) the processes employed by US appraisers differed from those of UK experts but not NZ experts. These behavioural differences are attributed to differences in the normative training and business cultures of the countries. Descriptive models of valuation behaviour are developed and compared.

The impact of sustainability on the investment environment

Purpose – The purpose of this paper is to investigate the key drivers affecting property investment decisions within a context of sustainability and how these drivers are likely to change the investment product landscape and the management of existing property investment portfolios.Design/methodology/approach – Examples from the Australian property market are discussed in order to demonstrate how sustainability principles may form part of the wider agenda of corporate property investment strategy and social responsibility.Findings – A full understanding of the impact of sustainability on the property investment landscape can only be found by adopting an holistic approach, including the behavioural effects of economic, social, ecological, policy and regulative environments.Originality/value – This paper provides important new insights as to the effect that sustainability may have on future investment decisions and the future investment product landscape.

Multicultural examination of valuation behaviour

A series of experiments were conducted to examine valuation behaviour in the UK, the USA, and New Zealand (NZ). Professional valuers from all three countries participated in the study whose findings support the notion that the US normative model is cognitively demanding and that greater departures from it result in reduced cognitive effort. The study also concluded that subjects from cultures requiring disclosure (USA and NZ) examined a significantly greater number of sales than did subjects from the UK where disclosure is uncommon. Finally, while valuers perhaps ought to increase sales search in unfamiliar markets, this research revealed no evidence that they do so. These findings are consistent with the need to seek cognitive efficiency and reduce cognitive effort even at the expense of performance quality.

The effect of sustainability on commercial occupiers' building choice

Purpose - The purpose of this paper is to explore how the availability of sustainable buildings may affect the decisions made by office occupiers in their building selection process. Design/methodology/approach - The structure of the paper includes a review of both the sustainability literature and traditional location literature which serves to inform the study. A qualitative study comprising 13 in-depth one-to-one interviews with decision makers of a variety of organisations who have chosen to locate in a “sustainable” building within the central business district in Auckland, New Zealand is undertaken. Findings - The research suggests that selecting a building that is perceived to be sustainable by the market may not be the ultimate driving factor in the office location decision and that more emphasis is placed on micro location factors, attractiveness to staff, marketing and flexibility. The importance of each of these factors tends to be influenced by the size and type of organisation as well as the availability of suitable buildings in the market. The research reinforces the finding that organisations generally seek accommodation that can “add value” to their specific business. Practical implications - The study provides a deeper understanding on the impact of the emergence of sustainable buildings in the decision-making process of office tenants and how this may be affected by the size and type of the occupier organisation. These findings will be of practical application to property professionals involved in the development, sale and valuing of sustainable buildings. Originality/value - This paper provides in-depth insights into business location decisions from the perspective of a variety of tenants choosing to locate within a CBD.