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作者

Michael D. Eriksen;Hamilton B. Fout;Mark Palim;Eric Rosenblatt

来源

JOURNAL OF REAL ESTATE FINANCE AND ECONOMICS,Vol.60,Issue1,P.77-98

语言

英文

关键字

Mortgage loans;Collateral;Appraisal bias;Financial crisis;G21;G28;K11;L85;R31

作者单位

Department of Finance and Real Estate; Lindner College of BusinessUniversity of CincinnatiCincinnatiUSA;Fannie MaeWashingtonUSA;Department of EconomicsKansas State UniversityManhattanUSA

摘要

Prior research has argued that upwardly biased appraised values of residential properties were a contributing factor of the 2008 financial crisis. Subsequent reforms have been enacted to reduce appraiser’s financial incentives to submit biased appraisals, but appraisers continue to receive the contract price of pending home sales. This knowledge may lead them to subconsciously interpret and select information to confirm the contract price exposing the economy to future crises. A novel data series of properties that were appraised twice within six months where one appraiser was uninformed of the contract price is used to test how appraisal practices differ when prices are known. Significant differences were found in the property descriptions and the selection, price adjustment, and weighting of comparable transactions for appraisers aware of the contract price. Appraisers aware of contract price were more than twice as likely to reach an appraised value at least equal to contract price; on average their valuations were 4.2%-to-8.3% higher than appraisers unaware of contract prices.