Real Estate Council of Alberta Fundamentals Practice Exam

What must appraisers do after they collect and analyze data in the appraisal process?

1. Write the final property value estimate

2. Decide on the approach to valuation

3. Conduct an additional inspection of the property

4. Complete the preliminary report

The correct answer is: Decide on the approach to valuation

After appraisers collect and analyze data in the appraisal process, they must determine the most suitable approach to valuation for the specific property in question. This step is crucial, as the chosen approach—be it the cost, sales comparison, or income approach—will guide the appraiser in calculating the property’s final value estimate. Each approach has its methodologies and is applicable in different scenarios based on property type, purpose of the appraisal, and the data available. This decision-making phase ensures that the appraiser applies the most relevant and effective techniques to arrive at a fair and accurate valuation, thereby setting the foundation for the subsequent steps in the appraisal process, including writing the final value estimate. Understanding which valuation method to use is a fundamental step that directly influences the credibility and reliability of the appraisal outcome.