Laymen vs. Experts: Does Experience Matter When Assessing House Condition with Photos of the Exterior

Simon Thaler and David Koch

ERES from European Real Estate Society (ERES)

Abstract: Assessing the condition of a property is an important part of determining its value. To assess the condition of, for example, a house, certain exterior and interior characteristics are evaluated according to a scheme in which each characteristic is weighted for the final condition classification. Since property valuation depends on the experience of the appraiser, professionals and court appraisers predominantly do the determination of a condition classification. A condition assessment can also be made from pictures and does not require an on-site visit. Therefore, this article examines the extent to which students, as a sample of the general (unexpierenced) population, evaluate the condition of single-family homes based on pictures of the exterior. We compare the evaluation by students with an evaluation by professional evaluators following a standardised scheme. In addition, we investigate how colours and distance of the photographer, among other factors, affect the condition classification assigned by students. The results of this work provide information about the extent to which lay people are able to evaluate single-family houses. We find the wisdom of the crowd comes to approx. 60% correct condition class predictions. Furthermore, the depiction of pools upwardly biases the predictions of the students sample. Colour or grey scale seems not to have an impact.

Keywords: Condition; Assessment (search for similar items in EconPapers)
JEL-codes: R3 (search for similar items in EconPapers)
Date: 2023-01-01
New Economics Papers: this item is included in nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:arz:wpaper:eres2023_122

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