What is the purpose of reconciliation in the appraisal process?

In the appraisal process, the purpose of reconciliation is to analyze value indicators and formulate a single value conclusion. This is a critical step in arriving at a final opinion of property value after considering multiple inputs and approaches. The appraiser typically examines various data points, which may include comparable sales, cost estimates, and income projections. Each method offers different insights and potential value conclusions.

During reconciliation, the appraiser evaluates the reliability and relevance of the data gathered from these different approaches. By weighing the strengths and weaknesses of each indicator, the appraiser synthesizes the findings to arrive at one coherent value estimate. This value must represent the most reasonable conclusion based on the evidence presented, ensuring that the appraisal is both credible and defensible in the context of the current market.

While gathering data, establishing market trends, and distinguishing between different property types are all important tasks in the overall appraisal process, they serve as preliminary steps to the crucial act of drawing a final conclusion of value. Reconciliation synthesizes all that data and research into a single value opinion, which is essential for the appraisal to be useful for its intended purpose, whether that’s for selling, financing, or investment decisions.