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
- Frame the purpose or identify the problem.
- Record the data needed and its sources or references.
- Collect, document, and verify the data.
- General data (region, city, neighborhood).
- Precise data (subject site, improvements).
- 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.
- Examine and analyze the data.
- Reconcile data for the final estimate.
- Draft an appraisal report.
Remember, an appraiser develops an opinion of value based on facts and data.