In an appraisal, what is "reconciliation"?

Reconciliation is an essential part of the appraisal process that involves weighing and analyzing value indications derived from various approaches to arrive at a final value opinion. In appraisal practice, multiple methods—such as the cost approach, sales comparison approach, and income approach—are often employed to assess the value of a property. Each method produces its own indication of value, reflecting different aspects of the property and market conditions.

During reconciliation, the appraiser critically evaluates the results yielded by these different approaches, considering factors such as their strengths, weaknesses, and applicability to the property at hand. The goal is to synthesize this information into a single, credible value opinion that best represents the property's worth. This careful analysis ensures that the final value opinion is well-supported and reflects an informed judgment based on comprehensive data and methodologies.

Other options involve processes that do not directly relate to the analysis and synthesis of value indications. For example, confirming property boundaries is more about legal aspects and property rights, while gathering data from multiple sources focuses on the collection of information rather than its analysis. The synthesis of historical data to predict future values pertains to forecasting and market analysis but does not encapsulate the evaluation of differing valuation approaches essential in reconciliation.