What is the first step in the Sales Comparison Approach to Value?

In the Sales Comparison Approach to Value, the first step is to define the appraisal problem. This foundational step serves to clarify the purpose of the appraisal and what is being evaluated. It involves determining the specific property being appraised, understanding the context of the valuation, and identifying the client's needs and objectives. By establishing a clear definition of the appraisal problem, the appraiser can ensure that the subsequent steps, such as collecting data and making adjustments, are aligned with the objectives of the valuation.

This initial clarity is crucial, as it informs the entire appraisal process. Without a solid understanding of the appraisal problem, the data collection and analysis may be misguided or irrelevant to the intended outcome. The definitions set during the initial phase form the basis upon which the analysis is built and significantly impact the validity of the final valuation.