What is the first step in the appraisal process?

The first step in the appraisal process is to define the problem. This critical step involves understanding the specific purpose of the appraisal and what information is needed to arrive at a conclusion about the property's value. Defining the problem sets the direction for the entire appraisal process, as it clarifies what the appraiser must focus on, the type of value being estimated (such as market value, investment value, etc.), and the relevant factors that will influence the appraisal.

Once the problem is defined, the appraiser can proceed with gathering data, identifying the property location, and analyzing current market trends, all of which are essential but follow the initial definition of the problem. This foundational step ensures that the appraiser’s efforts are aligned with the requirements of the assignment, ultimately leading to a more accurate and relevant appraisal outcome.