What is the first step in the appraisal process?

The first step in the appraisal process is to define the problem. This step is crucial as it sets the foundation for the entire appraisal. Defining the problem involves identifying the purpose of the appraisal, understanding the type of value to be estimated, and clarifying any specific requirements or restrictions that may apply.

Without a clear understanding of the problem, the appraiser could misidentify the property characteristics, the appropriate methodology, or the relevant market area to analyze. This initial step ensures that the appraiser knows what questions need to be answered and what parameters must be followed throughout the process.

Subsequent steps, such as collecting data about property sales, determining market value, and inspecting the property, depend on having properly defined the scope of the appraisal. If the problem is not well-defined, the integrity and accuracy of all following steps could be compromised.