Lesson 14 · 3:14
Reconciliation
How the redesigned URAR reconciles value: approaches and exclusions, market value conditions that must match the defects, cost to repair, and revision history.
Transcript
Reconciliation
Every approach you developed lands here, and you commit to one number. Reconciliation brings together the approaches, the final value and its conditions, and every defect you found. Then Revision History, for changes after delivery.
All three, every time
Approaches to Value always lists all three: Sales Comparison, Income, and Cost. Each approach you developed carries its indicated value over automatically. Skip one, and give a Reason for Exclusion, like Insufficient Data. For Sales Comparison, it's always Other, in your own words. Reconciliation of Market Value explains how the approaches and data led to your number.
The headline
The Appraisal Summary leads with the Opinion of Market Value. Contract Price carries over when a sales contract was analyzed. Reasonable Exposure Time is always required, in days or a range of days. And for a co-op, the value is labeled as the cooperative interest.
As Is, or Subject To
Market Value Condition is As Is, or one or more of three: Subject to Completion Per Plans, Subject to Inspection, and Subject to Repair. As Is stands alone. Nothing else can be combined with it. Choose any Subject To, and the report writes the Final Value Condition Statement for you.
Conditions match defects
Your condition has to agree with the defects you reported. If any defect has a Recommended Action of Completion, Inspection, or Repair, the report can't be As Is. It works the other way too. Subject to Repair needs at least one defect marked Repair, and Subject to Inspection needs one marked Inspection.
Every defect, one table
Every defect, damage, and deficiency from earlier sections shows up again here, grouped by section. Cost to repair is reported as None, a Total Cost, or Itemized, with a total at the bottom. If the value is subject to repair or completion, and it isn't new construction, add an As Is Overall Condition Rating, from C1 to C6.
A second opinion of value
Sometimes the client wants another value too, like a quick-sale value on an REO. Client Requested Conditions gives each one a row, ending in an Alternate Opinion of Value. In the commentary, state the type and definition of value, and cite where the definition comes from.
After it's delivered
Revision History is for material changes made after the report went to the client. It's not for tracking drafts. Each entry gets a date, the URAR section that changed, and a short description. A borrower-initiated ROV gets its own block: the date, the result, and a summary. And when an ROV happens, update the report's Date of Signature and Report.
Five things to remember
One. Developed approaches carry their values over. Skipped ones need a reason. Two. As Is stands alone. Three. Conditions and recommended actions must agree. Four. Cost to repair is reported as None, Total Cost, or Itemized. Five. Changes after delivery, and every ROV, go in Revision History. That's Reconciliation. Next up: Certifications and Scope of Work.