Reconciliation and Report Writing
What the exam tests
Reconciliation and report writing questions test whether you can weigh approaches, state a supported final opinion, and produce a USPAP-compliant report for the intended use.
Core rules
- Reconciliation is not averaging. Weigh the relevance and reliability of each approach given the property type, data quality, and intended use.
- State a value range, then a final point value within it, with reasoning.
- USPAP reporting options are the Appraisal Report and Restricted Appraisal Report. The restricted option limits intended users and requires a workfile.
- Reports must state intended use and intended users, value definition, effective date, scope of work, extraordinary assumptions, hypothetical conditions, and exposure time.
- Certification must be signed; the report must not mislead.
Worked example
Sales comparison indicates $415,000-$430,000; cost approach $390,000; income approach $410,000. The subject is an owner-occupied house in an active market. Sales comparison is most reliable because it uses recent closed sales of similar homes; cost approach is less relevant because of depreciation estimates; income is secondary because the property is not rented. The appraiser reconciles to $420,000, within the sales range, and explains why the cost approach received less weight. The report states exposure time of 90 days based on market data.
Traps
Averaging indicators; choosing a final value outside the supported range; omitting exposure time; using a Restricted Appraisal Report for a lender who will share it; failing to disclose a hypothetical condition.