Reconciliation is the process in which the appraiser reviews, selects from all conclusions that are achieved after three approaches in order to reach a final estimated value for one title.

Usually while doing the appraisal process, more than one approach will be used and each approach will give one different value. So finally, the appraiser has to reconcile all the differences among these different values and should arrive at a single value.

This can be done by using title reconciliation software.

Process of reconciliation in real estate

The process of reconciliation or process of assessing will be by three major approaches. They are

1.   The market comparison

This approach or sales approach can be used to assess a single house or single property.

2.   The cost approach

This approach will be used for unique buildings like churches, stadiums, and schools.

3.   The income approach

This approach will be used for investment properties like shopping malls, and office buildings.

Reconciliation is not the average of all the steps involved. It is the best approach that can be suited for that particular type of property involved.

As each approach will generate different values, the appraiser has to check all these values and arrive at a final value for the property depending on his/her experience and intuition.

Final report of a defined value

After the appraisal in order to complete it, there should be a final detailed report showing the defined value with the help of title reconciliation software. These reports will be of two types. They are

1.   Form Report

This is also known as URAR which means Uniform Residential Appraisal Report. Most mortgages prefer this type of report.

2.   Narrative Report

This report contains more details when compared to a form report. This type of report is usually used in commercial real estate.

Features of Reconciliation Services:

Some of the main features of reconciliation services that can be done with the help of title reconciliation software include

•     This software can help in obtaining quotes easily
•     It is used to send and receive secure documents
•     This software helps to access the documents even after the transaction is completed.
•     This will allow access to files across different title agencies.
•     That will match the debit and credit transactions daily.
•     The alert present will report any bank errors or input errors.
•     A Daily three-way reconciliation will be done for the escrow account.

Types of reports that can be achieved after reconciliation

The following types of reports can be prepared after running the title reconciliation software.

•     Trial Balance Report
•     Book Balance Report
•     Summary report of the reconciliation.
•     Receipts and disbursements report
•     Bank adjustments report.

Use of reconciliation in real estate

As all real estate transactions involve the exchange of money, all the money will be deposited in the escrow accounts. If reconciliation is not there, there will not be any guarantee for the funds.

Conclusion:

Reconciliation software will add an extra layer to all fraud. With the daily reconciliation option, if there is any irregularity in the accounts that will be notified.

The software will have the ability to create daily alerts that are specific to the way they conduct business.

Edward Bertrand