What is the first step in defining the appraisal problem?

The first step in defining the appraisal problem is to define the purpose and function of the appraisal. This step lays the groundwork for the entire appraisal process, as it helps to clarify what is being evaluated and why. Understanding the purpose allows the appraiser to determine the appropriate approach, methodology, and level of detail required for the appraisal.

Defining the purpose of the appraisal includes considering factors such as whether the appraisal is for a sale, financing, taxation, or legal disputes. Each scenario may have different goals and requirements, influencing how the property is assessed.

Identifying the property to be appraised is certainly an important step, but it comes after understanding the overall objective of the appraisal. Once the purpose is clarified, the appraiser can accurately identify the property and then proceed to address other relevant aspects such as the date of appraisal and the specific property rights involved. Therefore, initiating the process by defining the purpose ensures that the appraisal is relevant and appropriately directed.