Real Estate Appraisal Practice Exam

Which step of the appraisal process involves answering the question, "What's the purpose of this appraisal?"

1. Gathering data.

2. State the problem.

3. Performing the analysis.

4. Preparing the report.

The correct answer is: State the problem.

The step of the appraisal process that involves answering the question, "What's the purpose of this appraisal?" is known as stating the problem. This critical phase sets the foundation for the entire appraisal process by clearly identifying the specific reason for the appraisal, whether it be for sales, financing, tax assessment, or other purposes. By articulating the purpose upfront, appraisers can ensure that the subsequent steps—gathering data, performing the analysis, and preparing the report—are all aligned and relevant to the intended use of the appraisal. This clarity helps appraisers deliver accurate and useful valuations tailored to the needs of the clients or stakeholders involved.