What is the initial step in the model building process?

The initial step in the model building process is model specification. This phase is crucial as it involves defining the type of model that will be used based on the objectives of the appraisal. During model specification, appraisers determine which variables will be included in the model, what form the relationships among those variables will take, and the underlying theory or rationale guiding these decisions. This foundational stage sets the direction for subsequent steps, ensuring that the model is structured appropriately to accurately capture property values.

Effective model specification helps in outlining the necessary data that needs to be collected, guiding the calibration of the model later on, and detailing how the model will be applied in real-world scenarios. By thoughtfully specifying the model upfront, appraisers increase the likelihood of developing a robust and effective mass appraisal model.