What is an extraordinary assumption in appraisal practice?

An extraordinary assumption in appraisal practice is defined as a reasonable belief about something that is not known with certainty but is essential for the appraisal analysis. When appraisers are faced with uncertainties that could significantly impact the value conclusion, they may use extraordinary assumptions to proceed with the appraisal while explicitly noting that these assumptions may not hold true.

For example, if an appraiser assumes that a property is free of environmental contamination without any evidence, they are making an extraordinary assumption. This assumption is important to establish the value based on the idea that the property is in a typical condition, even though it has not been verified.

The other options do not fit this definition. A known fact would not qualify as an extraordinary assumption because it is already established and verifiable. A definite condition implies certainty, which contradicts the inherent uncertainty involved in an extraordinary assumption. Lastly, a hypothetical scenario relates more to theoretical situations rather than assumptions about unknown variables affecting a specific property.