Summary: The paper deals with prevailing challenges of real estate valuations. Real estate, heterogenous and diverse in nature, are characterized by a wide variance of selling prices which cannot be statistically fully explained. This makes it difficult to objectively evaluate a property. The selection of the right set of comparable transactions (and the implementation of adjustments) has therefore by far the greatest impact on the valuation. And loose valuation standards do not provide much guidance. Real estate valuations might be therefore subject of high uncertainty. In addition, valuation bias may even increase valuation imperfections. A reviewer of a valuation reports must be therefore aware of all pitfalls and know how to challenge a report in the right way.
Bančni vestnik – Journal of The Bank Association of Slovenia., 11/2023
