What are extraordinary assumptions in appraisal practice?

Extraordinary assumptions in appraisal practice refer to assumptions that are made to develop credible results, particularly when there are uncertainties or incomplete information about certain aspects of the property or the market. These assumptions are necessary when appraisers must address uncertainties that, if proven false, could significantly alter the appraisal outcome.

This concept is important because it acknowledges the limitations of available data and requires appraisers to be transparent about the assumptions they are making. When using extraordinary assumptions, the appraiser must clearly state these assumptions in the appraisal report, ensuring that users of the report understand the context in which those assumptions were made.

By relying on extraordinary assumptions when necessary, appraisers ensure that their valuations remain as accurate and relevant as possible, thus allowing for credible conclusions to be drawn even in the face of uncertainties. The proper application of these assumptions ultimately supports the integrity of the appraisal process.

Other options discuss assumptions without necessary qualifiers or do not touch on the framework of requiring them for credible results, which is a key aspect of understanding extraordinary assumptions in appraisal practice.