An appraiser writes only that the sales comparison approach was given most weight. What is missing?
Correct Answer
D) The reasoning that led to that weighting
Why this is correct: USPAP and sound reporting practice require the appraiser to communicate the rationale for the reconciliation. Simply stating which approach was weighted most heavily does not explain the reasoning behind that professional judgment. Why the other choices are wrong: 'The dollar amount each approach contributed' is not required; the reasoning is key. 'A statement of the client's preferred approach' is irrelevant to the appraiser's independent analysis. 'A recalculation of the other two approaches' is unnecessary; the original development should stand. Exam tip: Your reconciliation must answer "why?" not just "what?" Explain your reasoning for the weighting.
Why This Is the Correct Answer
Option D is right because the reasoning that led to the weighting is what the report is missing. A defensible reconciliation paragraph names the criteria and applies them - for example, that the sales comparison approach carried most weight because seven closed sales within a mile required modest and well-supported adjustments, while the cost approach depended on a depreciation estimate for a fifty-year-old structure and the income approach rested on two dated rentals. That is checkable, and a reviewer can agree or disagree with it. Stating only the outcome gives a reader nothing to evaluate.
Why the Other Options Are Wrong
Option A: The dollar amount each approach contributed
There is no requirement to express reconciliation as dollar contributions or percentage weights from each approach, and doing so would suggest a mathematical blending that reconciliation deliberately avoids. Weighting is a judgment about reliability, not an allocation formula. A report showing sixty percent from one approach and forty from another has dressed up judgment as arithmetic.
Option B: A statement of the client's preferred approach
The client's preference has no place in the analysis and reporting it would raise an independence problem rather than solve a disclosure one. Clients may state assignment conditions and intended use, but the choice of which approach best indicates value is the appraiser's professional judgment. Recording a client's preferred approach would suggest that preference influenced the result.
Option C: A recalculation of the other two approaches
Recalculating the other approaches repeats work already done and addresses nothing that is missing; the development was completed, and the gap is in the explanation. If an approach was developed unreliably, the fix is to correct the development or to explain the resulting low weight, not to run the numbers again for display. The deficiency is in the narrative, not the arithmetic.
State the criteria, then apply them
A reconciliation paragraph has two halves. State the criteria - data quantity, data quality, size and support of adjustments, how the market actually behaves, and the intended use. Then apply them to each approach out loud. Conclusion without criteria is an assertion.
How to use: When a question asks what a thin reconciliation lacks, answer reasoning. Then reject options that demand numeric weights, that import the client's views, or that ask for work already performed to be redone.
Exam Tip
Remember that excluding an approach also requires an explanation in an Appraisal Report; a silent omission is as much a reporting failure as an unexplained weighting.
Common Mistakes to Avoid
- -Stating the weighting without the criteria behind it
- -Expressing reconciliation as percentage weights or dollar contributions
- -Failing to explain why an approach was excluded
- -Assuming a Restricted Appraisal Report excuses the reasoning entirely rather than moving it to the workfile
Concept Deep Dive
Analysis
This question tests the reporting side of reconciliation. Standards Rule 2-2(a) requires an Appraisal Report to summarize the information analyzed, the appraisal methods and techniques employed, and the reasoning that supports the analyses, opinions, and conclusions, and to explain the exclusion of any of the three approaches. A sentence naming which approach carried most weight reports a conclusion, not reasoning - it tells an intended user what the appraiser decided while withholding why. The why is what makes reconciliation reviewable: which approach best reflects how buyers and sellers in this market actually behave, which rested on the most and best data, which required the fewest or best-supported adjustments, and how the assignment's intended use bears on the choice. Note the report-option difference: a Restricted Appraisal Report states rather than summarizes, and the supporting rationale lives in the workfile, but the reasoning still has to exist somewhere.
Background Knowledge
You need Standards Rule 2-2(a) and its requirement to summarize the reasoning supporting the analyses, opinions, and conclusions, including the reconciliation and the explanation of any excluded approach, together with the reduced content of a Restricted Appraisal Report under Standards Rule 2-2(b) and the corresponding workfile obligation. You should also know Standards Rule 1-6's two reconciliation duties - quality and quantity of data within approaches, and applicability and relevance across approaches.
Real-World Application
A review appraiser returns a report whose entire reconciliation reads that most weight was given to the sales comparison approach. The revised paragraph names the number and proximity of the sales, the modest adjustment percentages, and the thin rental market that limited the income approach, and the reviewer accepts it without changing a single number.
More Reconciliation Questions
Reconciliation of the approaches to value is best described as which activity?
Why should the reconciliation address the quantity of evidence as well as its quality?
How long must a report be retained compared with the workfile?
What distinguishes an appraisal review from an appraisal?
An appraiser reconciles to a value at the top of the indicated range because the client needs that figure. What has occurred?
What does it mean that a value opinion must be reasonable rather than merely arithmetically derived?
What should the reconciliation section explain to the reader?
How do the content obligations of the two report options differ with respect to the information analyzed?
The three approaches indicate $480,000, $495,000 and $610,000. What should the appraiser do first?
Three approaches indicate $1.02 million, $1.05 million and $1.04 million. How should this be reported?
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