Guide to a USPAP-Compliant Reconciliation

 A USPAP-compliant reconciliation.  You need a guide.  Fannie Mae doesn’t tell you how to do this.  She doesn’t even give you enough room on a reporting form to do a respectable job.  SR1-6 (a) and (b) tells you what you must include.  But it doesn’t give you any examples.  In this ebook, The Appraiser’s Advocate illustrates for you a USPAP-Compliant reconciliation.  What you need to include is straightforward and clear.  Changes are you already have it in the body of your report.  You just need to summarize it properly.  

Take, for example, the Cost Approach.  To write a USPAP-compliant reconciliation, means you explain to your client the strengths and weaknesses of this approach.  You may have great cost data.  But, if your subject is really old, you might have lousy depreciation data.  In your reconciliation, you would explain that.  Then you would explain how much weight you gave to the Cost Approach, as well as why you gave it that way.  The Income Approach can be another challenge.  Rarely does the market trade residential houses as income-producing properties.  Therefore, rather than omit the Income Approach it might be wise to explain the protocols of this approach.  Your reconciliation would not be that you did not do the Income Approach.  Rather, it would be an explanation of why you chose not to.

A USPAP-compliant reconciliation is your opportunity to let your flag fly high!  The report contains what you did and how you did it.  The reconciliation summarizes why you took those steps.  It also summarizes the quality of your final value conclusion.