How the crucial Reconciliation step in appraisals fits within the data-driven UAD 3.6 framework and potential UPD influences, standardization with expert narrative.
Hello appraisers, Daniel Yoder here. Earlier, on our website, we have been talking a lot about the shifts happening with the Uniform Appraisal Dataset (UAD) 3.6 and the proposed Uniform Property Dataset (UPD). While much focus is on data collection and new report structures, I want to zoom in on a section that remains fundamental to our craft: the Reconciliation.
Even as formats evolve towards greater data standardization, the reconciliation process – where we synthesize our findings and articulate our final value opinion – continues to rely heavily on our expertise and judgment. Let's explore how this critical step fits into the changing landscape.
The UAD 3.6 initiative redesigns the Uniform Residential Appraisal Report (URAR) into a more dynamic, data-centric format. If you look at examples like the URAR Single Family Scenario (Appendix D-1) or the visual standards outlined in the URAR Report Style Guide Supplement (Appendix E-1), you'll notice the Reconciliation section retains its core components but presents them through more structured fields.
Key parts within the Reconciliation now often correspond to specific data points:
This move towards structured data aims to enhance consistency and clarity in how reconciliation points are presented. It standardizes where the information goes.
Despite the increased structure, the narrative component remains absolutely vital. The "Reconciliation of Market Value" commentary section is where the appraiser connects the dots. This is our space to:
While UAD 3.6 standardizes the presentation of certain reconciliation elements, it doesn't diminish the need for clear, concise, and well-reasoned narrative explanations. Our ability to articulate why we arrived at our conclusion is paramount.
Looking ahead, the proposed Uniform Property Dataset (UPD) focuses on standardizing the collection of property data itself, often envisioned for desktop or hybrid appraisals. While distinct from the UAD 3.6 report format, the data gathered via UPD could potentially feed into the earlier sections of an appraisal report prepared under UAD 3.6 standards.
If UPD data leads to more consistent inputs in sections like the Sales Comparison Approach, it might streamline the reconciliation process by providing more uniform data points to analyze. However, even with standardized inputs, the appraiser's role in interpreting that data, understanding its nuances, and applying appropriate weightings during reconciliation remains crucial. Remember, UPD is still a proposed dataset, so its final form and impact are yet to be fully realized.
Initiatives like UAD 3.6 and the proposed UPD aim to leverage technology for greater efficiency and consistency. Tools designed to facilitate structured data collection and report generation, perhaps like Valuemate which focuses on capturing data points directly during inspection, could certainly help us adapt. They might free up valuable time previously spent on manual data entry, allowing us to focus more intently on the analysis.
However, technology serves to support, not replace, the appraiser's judgment. The final reconciliation and value opinion hinge on our market knowledge, analytical skills, and ability to synthesize complex information into a credible conclusion.
In conclusion, while the URAR format is evolving under UAD 3.6, the Reconciliation section remains the critical juncture where data meets analysis and judgment. It’s where we, as appraisers, demonstrate our expertise and provide the reasoned basis for our value conclusion – a role that remains indispensable, regardless of the reporting format.
