Extraordinary Assumption
An assumption that is directly related to a specific assignment and, if found to be false, could alter the appraiser's opinions or conclusions. It presumes uncertain information to be factual for the purpose of the analysis.
Extraordinary assumptions are used when the appraiser cannot verify something but needs to proceed with the analysis. Common examples: assuming a property is free of environmental contamination without testing, assuming proposed construction will be completed as planned, or assuming a zoning change will be approved. The appraiser must clearly state the extraordinary assumption and note that the value conclusion is contingent upon it being true. If the assumption is later found to be false, the appraisal is invalidated. USPAP requires that extraordinary assumptions be reasonable for the assignment.
Related Terms
Hypothetical Condition
A condition that is contrary to known fact but is assumed for the purpose of analysis.
Scope of Work
The type and extent of research and analysis performed in an appraisal assignment.
Uniform Standards of Professional Appraisal Practice (USPAP)
USPAPThe nationally recognized ethical and performance standards for the appraisal profession, established by The Appraisal Foundation.
As-Is Value
The value of a property in its current physical condition, as of the effective date of the appraisal, without any hypothetical conditions or extraordinary assumptions about future improvements or changes..
More in Appraisal Process
View allEffective Date (Date of Value)
The date on which the appraiser's opinion of value applies.
Prospective Value
A forecast of a property's value at a future date, based on anticipated changes in market conditions, property improvements, or other factors.
Intended Use
The use or uses of an appraiser's reported appraisal or appraisal review as identified by the appraiser based on communication with the client at the time of the assignment.
Engagement Letter
A written agreement between the appraiser and client that outlines the terms of the appraisal assignment, including the property, intended use, scope of work, fee, timeline, and any special conditions..