What should be the first step in the appraisal process?

The first step in the appraisal process is the definition of the problem, which establishes the scope and purpose of the appraisal assignment. This step is critical because it identifies what specifically needs to be appraised, including the type of value sought (such as market value, investment value, or others), the property involved, and the purpose of the appraisal (for financing, taxation, insurance, etc.).

By clearly defining the problem, the appraiser sets the foundation for the entire appraisal process, guiding subsequent steps such as data collection, analysis, and ultimately reaching a conclusion of value. Without a well-defined problem, the subsequent steps could lead to irrelevant data collection and analysis, potentially resulting in an incorrect or less useful appraisal.

Understanding the context of the specific assignment ensures that the appraiser maintains focus and adheres to professional standards throughout the process. This foundational step is crucial for achieving an accurate and credible appraisal outcome.