What is reconciliation in appraisal?

Reconciliation in appraisal refers specifically to the process of weighing and analyzing the results obtained from different valuation approaches to arrive at a final value estimate. This is a crucial step in the appraisal process as it allows the appraiser to consider the strengths and weaknesses of each approach, such as the cost approach, sales comparison approach, and income approach. By carefully evaluating the data from these different methods, the appraiser can make informed judgments about which valuations are most reliable and relevant to the specific property being assessed.

The importance of reconciliation lies in its role in ensuring that the final value estimate reflects a well-rounded consideration of various factors, leading to a more accurate and substantiated conclusion. This is particularly important in scenarios where different methods yield varying results, as it enables the appraiser to justify their final estimate based on a comprehensive analysis rather than relying solely on one method.

While combining different valuation methods may seem related, it does not capture the critical analysis component of weighing results. Property tax assessments focus more on establishing a tax value rather than determining an appraised market value. Lastly, reviewing past appraisal reports is more about quality control and learning from past assessments rather than the active process of developing a new valuation.