Behavioral aspects of real estate valuation
||Kucharska-Stasiak, Ewa; Konrad Zelazowski
||Behavioral aspects of real estate valuation
||21st Annual European Real Estate Society Conference in Bucharest, Romania
||In majority of cases real estate valuation requires market objectivization. According to the definition, market value should reflect the most probable selling prices and typical behaviors of market participants. Valuation methodology often relies on an assumption of full rationality of market actors. However, valuation is a multistage process, to some extent, biased by valuers' subjectivity. The range of subjectivity depends on the complexity of valuated real estate, characteristics of real estate market, like market imperfections and inefficiency, as well as valuers' individual judgments and choices. In the decision-making process, valuers experience cognitive dissonance and use heuristics which affect the valuation accuracy. The goal of the paper is to investigate behavioral determinants of real estate valuation and their consequences for valuation process.
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||Q : Real Estate Valuation
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