1. Reconciliation Or Conclusion Reconciliation is the analysis of alternative conclusions to arrive at a final value estimate. Wayne Foss, MBA, MAI, CRE Foss Consulting Group Email: wfoss@fossconsult.com

2. 2 Reconciliation l An appraisal is performed to answer a client’s question about real estate. l In reconciliation, the two or more value indications focus to a final value conclusion. l Reconciliation is the analysis of alternative conclusions to arrive at a final value opinion.

3. 3 Review your work 4 Check each Approach, to be sure they were done correctly and consistently 4 Be sure any special property problems or amenities (benefits) of the property were considered in each approach. 4 Check for math and spelling errors 4 Be sure that the appraisal report is complete and 4 answers the reader’s questions.

4. 4 Review work, continued... 4 Evaluate the property interest (rights) appraised correctly 4 Follow any special needs, laws, or instructions correctly 4 Use the definition of market value 4 Be sure the appraisal helps respond to the reason the appraisal was requested.

5. 5 Deciding on the Value Key questions to ask about the approaches 4 Review the range of value indications in the approaches –Wide? Narrow? Reasonable? 4 Which approaches had the best quality and depth of information 4 Which approaches had the best quantity of information 4 Which approach best simulated the thinking process of the most probable buyer?

6. 6 Additional information helpful in the Reconciliation l Probable marketing time if property is for sale l Likely range in value for the property –The final value opinion should generally be a number within the final range of value l What the subject brings to the market; amenities (benefits) and negative features; special advantages or problems l Most probable user of the space

7. 7 Additional information helpful in the Reconciliation, continued... l Most probable buyer of the property l Current and future need in the market for this property; subject specific market outlook, trends. l Alternative uses

8. 8 The Final Value Estimate l Is as of a certain date l reflects any special ‘as of’ or ‘as if’ … conditions l may be a single amount or range in value (depending on client needs and the nature of client’s use of appraisal) l may be a single amount within a range

9. 9 Remember l The results of the approaches, formulas, and such provide numbers which are the foundations for the final judgement about value; none provide the value l The appraised value is a conditional forecast

10. 10 Remember …. l The appraised value is an estimate; “…appraisers estimate, only the market establishes value…” l Value is dynamic - it changes over time

11. 11 So That’s Reconciliation Wayne Foss, MBA, MAI, CRE, Fullerton, CA USA Phone: (714) 871-3585 Fax: (714) 871-8123 Email: wfoss@fossconsult.com