Valuers' perception of the effect of client influence on valuation practice

Abstract

The literature indicates that valuers yield to client influence to bias valuations. Studies also show that client influence has several effects on valuation practice. This study investigated valuers' perception of the effect of client influence on valuation practice with the objective of determining whether the perception differs for valuers of different characteristics. The investigation focused on secured lending valuations in Nigeria. The research design was cross-sectional survey. The sample comprised 270 valuation firms selected through the stratified random sampling design. Data collection utilised questionnaire structured on 5–point Likert format. Data analysis employed mean statistics and Kruskal-Wallis test. The results revealed that valuers perceive that client influence undermines integrity of the valuers; the valuation firm and the valuation profession; as well as questions valuers' expertise and, constrains the development of the valuation profession. This perception is the same irrespective of the characteristics of the valuer. It can be inferred that valuer characteristics are not important in explaining valuers' perception of the effect of client influence on valuation practice. The policy implication of the research is the necessity for the regulatory agencies to review valuation practice standards to institute measures to check the intervention of clients in valuations. The limitation of the research is that it investigated only valuers. It suggests that research be conducted on the subject from clients' perspective.

Keywords: Client influence; valuation; bias valuation; valuer characteristics; valuation practice