Property Valuation
Reconciliation in an appraisal is the process of:
AAveraging the three approaches to value
BReviewing and weighing the value indicators from each approach to arrive at a final value conclusion✓ Correct
CReconciling differences between buyer and seller
DAdjusting comparable sales for condition
Explanation
Reconciliation is the final step in an appraisal where the appraiser reviews and weighs the results of each approach (cost, sales comparison, income) to arrive at a single value conclusion.
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Key Terms to Know
Appraisal
A professional estimate of a property's market value prepared by a licensed or certified appraiser.
Comparable Sales (Comps)Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
Capitalization Rate (Cap Rate)A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
Gross Rent Multiplier (GRM)A quick valuation metric for income properties calculated by dividing the property price by gross annual rental income.
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