What is the first step in the Market Approach to property valuation?

The first step in the Market Approach to property valuation involves gathering data concerning recent sales. This foundational stage is essential because it provides appraisers with the empirical evidence needed to understand the current market conditions. By collecting data on comparable properties that have recently sold, appraisers can analyze price trends, features, and conditions of these sales, forming a basis for estimating values.

Without this initial data gathering, appraisers would lack the necessary market context to make informed comparisons or judgments about the subject property. It’s through examining these recent transactions that appraisers can identify similarities and differences, ultimately leading to a more accurate and reliable property valuation. This groundwork is critical for successful valuation, as the quality and relevance of the data collected directly influence the entire appraisal process.