Which of the following is the correct first step in the eight-step appraisal process?

• A. Define the problem
• B. Preliminary inspection & planning the work
• C. Data collection & analysis
• D. Apply the direct comparison approach

Answer: (A)

Defining the problem sets the direction for the entire appraisal. It clarifies what is being valued, for what purpose, what rights are included (for example, fee simple or leased fee), the date of value, and any constraints or requirements. This framing determines which data you collect, which analyses you perform, and which valuation approaches are appropriate. Without clearly defining the problem, you might gather irrelevant data or apply the wrong method.

The other steps follow from that foundation: planning the work after you know the problem, conducting data collection and analysis to build the factual basis, and applying a particular valuation approach (such as the direct comparison method) during the analysis phase. Each of these assumes the problem and scope are already established.