Which issue in the reconciliation section of an appraisal report would likely create problems for a review appraiser?

The averaging of conclusions from multiple approaches to arrive at a final value conclusion can raise significant issues for a review appraiser. This method often lacks a sound basis in valuation theory and practice. Each approach—Sales Comparison, Income, or Cost—can yield different results based on the specific characteristics of the property and the market conditions. Simply averaging the results can mask the nuances and differences inherent in those approaches, leading to a misleading or inaccurate final value conclusion.

Review appraisers expect a well-supported rationale that demonstrates a logical thought process behind the selection and weighting of each approach. The reconciliation process should involve a qualitative assessment, discussing the strengths and weaknesses of each approach and articulating why a particular conclusion is deemed the most credible. When conclusions are simply averaged without demonstration of thoughtful consideration, it can lead to questions about the thoroughness and validity of the analysis. This oversight can hinder the review appraiser's ability to fully trust the final value concluded in the report.

When considering other options, failing to explain the rationale for discounting the Sales Comparison Approach, omitting the Cost Approach entirely, or selecting a value based on proximity to one approach can all be problematic. However, these issues generally suggest a lack of clarity or a risky choice in valuation; they don't