7 Steps in the Appraisal Process

It’s essential to understand the steps in the appraisal process. With a combination of each step appraisers derive fair market value. These are the steps.

Steps in the Appraisal Process

1. Frame the purpose or identify the problem.
2. Record the data needed and its sources or references.
3. Collect, document, and verify the data.
   • General data (region, city, neighborhood).
   • Precise data (subject site, improvements).
4. Collect, document, and verify the data for each approach.
   • Market data approach, which is also commonly called the sales comparison approach.
   • Cost approach, also referred to as summation.
   • Income approach, which is also known as capitalization.
5. Examine and analyze the data.
6. Reconcile data for the final estimate.
7. Draft an appraisal report.

Remember, an appraiser develops an opinion of value based on facts and data.