Which step involves collecting and analyzing data in the sales comparison approach?

In the sales comparison approach, the initial step involves defining the problem to ensure that the appraiser understands the specific appraisal issue they are addressing. This includes identifying the subject property and the market in which it operates; it sets the foundation for the subsequent steps that follow.

Collecting and analyzing data typically occurs after the problem has been defined and includes gathering comparable sales data relevant to the subject property. This data provides the basis for comparisons and adjustments needed in later steps. Analyzing this data helps the appraiser interpret the market conditions, identify trends, and establish a reasonable basis for adjustments in value.

The other options pertain to further steps in the sales comparison approach: making reasonable adjustments based on the market incorporates insights gained from the data analysis to refine the value estimate; selecting appropriate units of comparison helps in establishing the most relevant basis for comparison; and applying the data to the subject of appraisal involves synthesizing all gathered information into a final valuation conclusion. However, these steps cannot proceed effectively without first defining the problem.