Reconciliation Written Comments

[VolcanoLvr]

When writing the final reconciliation comments in residential reports, how much effort do you make explaining why you DIDN’T use certain comps?

Instead of concentrating on, or trying to prove a negative, do you focus your comments on why you chose the one or two comps you rated highest to determine the OMV and reasoning for those?

Perhaps I'm not writing broadly enough about my analysis to make value decisions.

 

[Randolph Kinney]

I include a list of comparables considered along with my screening criteria. If any property that is not in my list, it is a not a comparable property.

Adjustments were determined from those properties in my list of comparables.

 

[BRCJR]

My final reconciliation has nothing to do with comp selection. That is in my sales summary.
My final reconciliation has to do with the sales comparison, cost and income approaches' to value strength and weaknesses.
My final has to do with where my opinion of value falls within these approaches used and why.

 

[J Grant]

When writing the final reconciliation comments in residential reports, how much effort do you make explaining why you DIDN’T use certain comps?

Instead of concentrating on, or trying to prove a negative, do you focus your comments on why you chose the one or two comps you rated highest to determine the OMV and reasoning for those?

Perhaps I'm not writing broadly enough about my analysis to make value decisions.

Unless there is a compelling reason to go into detail why I did not use a specific sale , then I will not explain why I did not use it ( note the term sale, if it is a COMP maybe I would have used it? )..I might make a comment such as other sales took place in the subdivision and were considered but not used as comps because they were (older/newer build date,/did not have similar views, etc) , briefly state main reasons why recent nearby sales were not used- mainly because if there are other recent nearby sales, a data analyst or computer program might trot them out...

I then devote comments addressing the comps I Did use , why they were selected, their relation to subject as well as explaining adjustments with a summation why I weighted or considered certain comps more than others in the reconciliation of my market value opinion..

 

[hastalavista]

When writing the final reconciliation comments in residential reports, how much effort do you make explaining why you DIDN’T use certain comps?

Instead of concentrating on, or trying to prove a negative, do you focus your comments on why you chose the one or two comps you rated highest to determine the OMV and reasoning for those?

I'm not sure if you are mixing two different things here (or if I'm simply misunderstanding)?

To the first question....I'll comment on a sale I didn't use if it would be a reasonable expectation for that sale to be considered.
For example: A sale on the same street; on paper, it looks like a reasonable comparable. After researching the sale and speaking with the agents, it turns out it was a nasty divorce and the spouse who lived in it did everything he could to sabotage the sale.
Without discussing that,anyone else would wonder why it wasn't considered. So, I will comment on a sale that I didn't include in the report if it I think it is reasonable for someone to question why it isn't in the report. This may also include sales that I think are redundant (I've included four sales in the grid from the subject's development; none required GLA or condition adjustments. The only adjustment was market conditions. There are additional sales that are equally as comparable: 123 main, 234 1st, 567 green; they would only require market condition adjustments and would provide the same value indication; I considered them to be redundant to what is presented).

To the second question, in the particular approach, I will say why I considered sale X & Y greater than sale A & B.

 

[Terrel L. Shields]

Yes, we have no bananas today. USPAP is clear that you may need to explain negatives. If I have say 10 comps in my market area, I might explain each not used with a simple sentence. If 80 sales....gets harder. I tend to weigh the most similar sales without regard to time but in that case I would boot sales over 90 days old to winnow down the herd. Then tighten the group by SF and age so I don't have to make one or both adjustments.

 

[chad hampton]

I combine my sales comparison summary and reconciliation (as the sales comp. approach is main approach for lending work).

I keep it all to about 3-4 paragraphs unless it is a complex appraisal. I will occasionally (rarely) say why I considered, but did not included, 1 or 2 sales, but only if there is a good reason why (next door, but not updated, etc). If I had to list 5-10 extra sales and explain why I didn't use them in every report, I do believe I would quit this profession.

 

[Elliott]

How can you "explain" a comparable you didn't use? There's no data, no picture, no nothing for the reader to look at.

 

[Tom Woolford]

I also discuss the criterion used to select the sales to examine to select the actual comps used in the report. Generally I will bracket GLA, age, garages and major features like pools etc. I include a printout of the sales report, and the rationale for picking the 3-5 comps used. Actually explaining why 30 sales aren't used is a fools errand. It's easier and more logical to explain why you picked the ones you did. The conclusion is the rest weren't used because they didn't meet those requirements.

 

[ucbruin]

I also discuss the criterion used to select the sales to examine to select the actual comps used in the report. Generally I will bracket GLA, age, garages and major features like pools etc. I include a printout of the sales report, and the rationale for picking the 3-5 comps used. Actually explaining why 30 sales aren't used is a fools errand. It's easier and more logical to explain why you picked the ones you did. The conclusion is the rest weren't used because they didn't meet those requirements.