• Welcome to AppraisersForum.com, the premier online  community for the discussion of real estate appraisal. Register a free account to be able to post and unlock additional forums and features.

Round Or Reconcile...

Status
Not open for further replies.

Bill_FL

Senior Member
Joined
Aug 23, 2002
Professional Status
Certified General Appraiser
State
Florida
I have a technical question for you all. When you come up with a value by the approaches, do you round or reconcile each approach? By the book definitions, we would round the cost and income and reconile the sales comparison approach. Then, of course, the final recocilitation.

The book says you only reconcile more than one value indicator. So, in the cost appraoch, when you come up with a number like, $445,763, you round it. However, the "rounding" is done to a confidence level, without regard to the mathmatical rules of rounding. For example, you could round that number to $445,000 or to $440,000. Would not matter, it is the confidence you have in the number.

I guess I simply do not like the term "rounding" if one does not apply the mathmatical rules that apply to rounding. I think reconiliation is a better term since it implies appraiser judgement was applied.

What do you all think?
 

Mike Garrett RAA

Elite Member
Gold Supporting Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
I don't round my cost approach but I do round my sales comparison numbers to the nearest $100 for the square footage adjustment. I prefer not to make any adjustments of less than $500 as I believe it reflects a level of expertise few of us obtain. The income approach is also rounded.

One of the biggest problems, as I see it, is new construction where the sales price comes in at (true case) $176,033. In this case I was $33 short of the contract because I round my final value to the nearest $1,000 and there was no way I could get to $177,000 or even $176,500. It was a stretch to reach $176,000. The builder screams over $33 saying I am killing their deal because it gives the buyer an out. By the time they get to the appraisal the buyer is fed up with the builder anyway. So what do we do?
 

GeorgiaBoy

Junior Member
Joined
Jul 23, 2003
Professional Status
Licensed Appraiser
State
Georgia
I round my comparable's sales prices to the nearest $100. I round my GLA and basement adjustments to the nearest $100 and try not to make adjustments that are less than $1000. When it comes to the cost approach I round to the nearest dollar. Because I am using Marshall and Swift cost data I feel that the number is the number and should be stated. On my income and sales approach values I round to the nearest $1000 on properties over valued $100,000, and to the nearest $500 on properties valued under $100,000.
 

BigBlueGA

Junior Member
Joined
Mar 13, 2002
Professional Status
Certified General Appraiser
State
Georgia
Originally posted by Mike Garrett@ RAA,Aug 26 2003, 09:07 AM
One of the biggest problems, as I see it, is new construction where the sales price comes in at (true case) $176,033.  In this case I was $33 short of the contract because I round my final value to the nearest $1,000 and there was no way I could get to $177,000 or even $176,500.  It was a stretch to reach $176,000.  The builder screams over $33 saying I am killing their deal because it gives the buyer an out.  By the time they get to the appraisal the buyer is fed up with the builder anyway.  So what do we do?

"An equal weighting of the comparable sales supports the contract sales price of $176,033.00."

INDICATED VALUE BY SALES COMPARISON APPROACH: $176,033.00

There is nothing wrong with that is there???? Quite honestly if you ask me, a bank would be insane to dump a deal over $33 anyways....
 
Status
Not open for further replies.
Find a Real Estate Appraiser - Enter Zip Code

Copyright © 2000-, AppraisersForum.com, All Rights Reserved
AppraisersForum.com is proudly hosted by the folks at
AppraiserSites.com
Top

AdBlock Detected

We get it, advertisements are annoying!

Sure, ad-blocking software does a great job at blocking ads, but it also blocks useful features of our website. For the best site experience please disable your AdBlocker.

I've Disabled AdBlock
No Thanks