Real Estate Appraisal Practice Exam

What is the first step an appraiser takes when using the sales comparison approach?

1. Calculate the property taxes

2. Identify features of the subject property that are in demand in the market

3. Research the local real estate market

4. Obtain a current appraisal report

The correct answer is: Identify features of the subject property that are in demand in the market

The first step an appraiser takes when using the sales comparison approach involves identifying the features of the subject property that are in demand in the market. This is essential because understanding what attributes potential buyers prioritize allows the appraiser to focus on comparable properties that share similar characteristics. In this method, appraisal hinges on comparing the subject property to recently sold properties in the same area. By identifying key features such as size, location, condition, and amenities, the appraiser can draw meaningful comparisons. This tailored identification process ensures that the comparisons made are relevant and reflective of current market trends, enhancing the accuracy of the valuation. The other steps, while important in the overall appraisal process, are subsequent to this initial identification. For instance, researching the local real estate market comes after understanding the specific characteristics of the subject property. This helps in selecting appropriate comparables that highlight the demand for those features. Calculating property taxes and obtaining a current appraisal report are administrative tasks that support the appraisal but do not directly relate to the execution of the sales comparison approach itself.