Variations in Implementing SCM to Minimize Subjectivity and a Future Direction for Malaysia
||Rahman, Rohana Abdul
||Variations in Implementing SCM to Minimize Subjectivity and a Future Direction for Malaysia
||18th Annual European Real Estate Society Conference in Eindhoven, the Netherlands
||The Sales Comparison Method (SCM) is the most widely used method of property va luation, residential properties in particular. With transaction data becoming more and more accessible, the trend will continue. However, SCM is criticized for its subjectivity with inconsistent prediction. The main contributor of subjectivity is informal implementation procedure of the method.Variants of SCM have emerged focusing on implementation details with subjectivity minimized or eliminated. The grid adjustment method has formalized the procedure with optimal or non-optimal route. Spatial autoregressive error model formalized the procedure in addition to estimating the spatial error dependence in a dataset. There are methods that focused on weighting of comparables only. This paper reviews SCM and its variation of implementation, discuss their strengths and weaknesses and recommends modifying the grid adjustment methodas a new implementation procedure of SCM for the country that may minimizes subjectivity.
||Property valuation, grid adjustment method, spatial autoregressive models, automated valuation.
||file.pdf (230,330 bytes)
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||P3: Market Research & Pricing issues [doctoral session]
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