Chapter 5: Reconciliation, Value
Conclusions, and Appraisal Reports
throughout the appraisal process anytime the appraiser must reduce multiple
indications into a single estimate.
reconciliation involves reconciling the difference among the specific valuation
techniques that were chosen for the appraisal.
of the weights
u Bayesian (educated guessing)
u Market driven based upon the percentage of newly
constructed properties and the percentage of rentals.
Income Approach Value=$105,000
20% New, 50% Rentals, 30% Resales
.2*$120,000+.5*$105,000+.3*98,000 = $105,900
u Beware of
Significant figures problem
* 988,363 sq.ft =$33,950,269.05
this must be rounded to $33,950,000 because
the maximum number of significant figures is four.
u Round to
market expected numbers.
Range of Value and Probability Distributions
u Range may
be more useful to client than a point estimate especially when appraising for a
seller who wants to know what price the
property should sell.
is helpful when sufficient data is available.
Especially useful when multi-modal distributions are present.