Housing valuation model:
an investigation of residential
properties in Tehran
Department of Marketing and Logistics,
University of North Texas, Denton, Texas, USA
Graduate School of Management and Economics,
Sharif University of Technology, Tehran, Iran, and
Sharif University of Technology, Tehran, Iran
Purpose – Lack of a consistent standardized housing pricing system in Iran has led housing
valuation to become solely dependent on appraisers’ opinions. The purpose of this paper is to
investigate some behavioral aspects of real estate decision makers, i.e. buyers and appraisers.
Design/methodology/approach – First, and based on a content analysis of the valuation literature,
a preliminary housing valuation model is proposed. This model is then contextualized and tested on
two separate samples of 23 appraisers and 145 buyers, using interviewing technique and
Findings – This study shows that buyers and appraisers may have different views about property
valuation and that the appraisal process of residential housing in Iran contains substantial
inconsistency with respect to buyers’ needs. In addition, it was found that ﬁnancial status is a
signiﬁcant factor affecting buyers’ attitude toward housing valuation.
Research limitations/implications – The ﬁndings may shed greater light on understanding
behavioral aspects of the valuation process, in general, and the importance of individual differences, in
particular, that could be applicable to different markets or different types of properties.
Practical implications – The model developed in this study could be used by both appraisers, as a
guideline in valuation process, and buyers, as a check-list of attributes they choose to consider in the
decision-making process. It could also be used by policy makers, banks and other ﬁnancial institution
providing mortgage loans, and real estate agencies, to name a few.
Originality/value – The lack of conformity between buyers and appraisers on property valuation
may result in buyers paying a higher price for amenities that may not be considered crucial from their
perspectives. As a result, this study reveals the necessity of creating an integrated appraisal system
based on customer needs. This housing valuation model is the ﬁrst and most comprehensive
framework developed and contextualized for the Tehran housing market. In addition, this study is one
of the few studies examining both demand- and supply-sides of the housing market simultaneously.
Keywords Residential property, Prices, Housing markets, Appraisal, Valuation, Iran
Paper type Research paper
Neoclassical economics, assuming that people make rational economic decisions
about renting and buying real estate as part of their attempt to maximize utility,
The current issue and full text archive of this journal is available at
International Journal of Housing
Markets and Analysis
Vol. 5 No. 1, 2012
q Emerald Group Publishing Limited