What is the first step in the appraisal process?

The first step in the appraisal process is defining the problem. This step is critical as it sets the foundation for the entire appraisal. Defining the problem involves identifying the specific purpose of the appraisal, the type of property involved, and any relevant market conditions. It ensures that the appraiser has a clear understanding of what needs to be valued, for whom the appraisal is being completed, and any legal or reporting requirements that may be applicable.

Once the problem is defined, the appraiser can proceed to gather data, conduct inspections, and evaluate comparable sales with a focused approach tailored to the specific valuation need. This initial definition helps to narrow down the scope of the appraisal work and aligns all subsequent steps with the stated objectives, leading to a more accurate and relevant appraisal outcome.