Hi Feras,
Apologies for the delay in responding to you.
When you’ve used multiple valuation approaches, reconciliation is a critical step in the valuation process. Reconciling the results of two (or more) valuation approaches involves a systematic and reasoned process to arrive at a well-supported and defensible final value conclusion.
It is generally done through weighting the approaches you’ve used, based on factors such as the availability and reliability of data; relevance and applicability of each approach to the type of property being valued; specific market conditions and trends; and the purpose of the valuation (e.g. secured lending, financial reporting, disposal, etc.).
You should ensure the final reconciled value is reasonable and consistent with your knowledge of market expectations and, very importantly, clearly document your reconciliation process, including:
- The rationale for selecting each valuation approach.
- The analysis of strengths and weaknesses of each approach.
- The weightings assigned to each approach and the reasons for these choices.
- The calculation of the weighted average.
- Any adjustments made during your reasonableness check.
- The final reconciled value and the supporting justifications.