How to evaluate valuation models?
Kathmann, Ruud M. & Marco Kuijper
Starting 2007 all real estate in the Netherlands will be revaluated yearly for taxation and other government purposes. The 458 municipalities in the Netherlands are responsible for these valuations. To effectively carry out this mass appraisal it is obvious that automated valuation models are used by municipalities. To improve the quality of valuation models in 2006 the Council for Real Estate Assessment published quality standards for valuation models. These quality standards are based on the "International Valuation Standards". Based on these standards the Council for Real Estate Assessment has set guidelines for municipalities how to evaluate the valuation models, because these valuation models have to guarantee that also the valuations for all properties are correct. By setting these guidelines the Council for Real Estate Assessment tries to contribute to the improvement of the quality of the assessed values as well as the efficiency of the valuation procedures. Working with valuation models is an activity for specialists. People specialised in the real estate market have to cooperate with specialists in generating automated models. It is however important that the quality of the values generated by the valuation model can easily be demonstrated by other people than these specialist. This helps to convince the taxpayer that the appraisal is performed in a sensible way. Therefore the evaluation of the estimated values and of the valuation model must not only be done by the experts, but also by other employees of municipalities who communicate directly with the taxpayers. The protocol which is developed by the Council for Real Estate Assessment, and is available for municipalities, meets those conditions because the way the quality is evaluated is, in fact, a systematic imitation of the check taxpayers will make.
Event: XXIII International FIG Congress : Shaping the change
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