In real estate, what is typically the first step in determining the value of a property?

The first step in determining the value of a property typically involves comparing similar properties, known as "comparative market analysis" (CMA). By examining properties that have recently sold, are currently on the market, or were taken off the market in the same area, a real estate professional can glean insights into pricing trends and establish a baseline value for the subject property. This comparative approach considers factors such as size, location, features, and condition, which are essential in determining how similar properties have been valued by the market.

While assessing current market trends, calculating profit margins, and evaluating property taxes are all important components in the comprehensive analysis of a property's value or in the overall real estate investment process, they typically follow after establishing a comparative base value. This foundational step provides a clearer view of how the subject property stands in relation to others in the market, which influences all subsequent evaluations and decisions related to real estate transactions.