page_title: Extraordinary assumptions and hypothetical conditions
section_title: Examples of extraordinary assumptions
hierarchical_section_title: Extraordinary assumptions and hypothetical conditions / Examples / Examples of extraordinary assumptions
caption_attribution_description: AP of commercial building under construction for use in an appraisal article
context_page_description: In the field of real estate appraisal, extraordinary assumptions and hypothetical conditions are two closely related types of assumptions which are made as predicating conditions of an appraisal problem. Under the Uniform Standards of Professional Appraisal Practice, they are two of the assignment conditions on which an appraisal assignment is predicated, the others being general assumptions, laws & regulations, supplemental standards, jurisdictional exceptions, and other conditions affecting scope of work. Making the distinction between the two is important when compiling or reporting appraisals in the United States or other jurisdictions where USPAP is considered the professional standard because USPAP has different specific disclosure requirements for each in an appraisal report and specifies different conditions under which each can be made.
  An assumption is a statement or condition that is presumed or assumed to be true and from which a conclusion can be drawn. USPAP defines an assumption as "that which is taken to be true". An extraordinary assumption is an assumption which if found to be false could alter the resulting opinion or conclusion.
context_section_description: Examples of extraordinary assumptions used in the course of analysis might include
  In the appraisal of real estate, when an appraiser observes items which might potentially indicate the presence of environmentally hazardous material, but he has no direct knowledge of any environmental contamination and is not qualified to detect such conditions, he may continue to formulate an opinion of value under an extraordinary assumption that the property is not chemically contaminated, though as a practical matter, he would need to communicate the extraordinary assumption made along with the value conclusion so that the users of the report can make their own determination of the reliability of the results given the observed conditions.
  Analyzing data and reaching a conclusion when the source of the data, its accuracy, or its veracity may be suspect, but is not known to be completely false. The conclusions would be based on the extraordinary assumption that the data is accurate and reliable.
caption: An appraisal of a property with proposed multi-tenant improvements may involve the estimation of a value as of a prospective date assuming both the completion of improvements and the leasing of the property to a stabilized occupancy.
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