What step determines the rate that will be used in an appraisal model?

In the context of appraisal models, the step that determines the rate to be used is model calibration. This process involves adjusting and refining the model to ensure it accurately reflects market conditions and properties. Calibration typically includes analyzing past data, identifying relationships between variables, and applying statistical methods to set rates that align the model's predictions with observed market outcomes.

This step is crucial as it directly impacts the accuracy of the valuation; an appropriately calibrated model produces reliable and defensible property assessments. By calibrating the model, appraisers can identify the most accurate rates that will yield valid results when applied to the specific property being assessed. Thus, model calibration ensures that the appraisal is based on sound, data-driven principles, allowing for greater consistency and validity in outcomes.