When must a review appraiser be aware of the proper use of an Extraordinary Assumption or Hypothetical Condition?

A review appraiser must be aware of the proper use of an Extraordinary Assumption or Hypothetical Condition at both stages: when reviewing the appraisal report and when writing the appraisal review report.

Understanding these concepts is essential because they can significantly impact the conclusion of value in an appraisal. An Extraordinary Assumption is a premise that is taken as true for the purpose of analysis but may not be supported by fact. A Hypothetical Condition, on the other hand, is a situation that is contrary to what exists, used in the appraisal process to estimate the value of a property as if certain conditions were present.

When reviewing an appraisal, the review appraiser must assess whether the original appraiser used these assumptions appropriately and if they were supported by adequate evidence. Misapplication of these concepts can lead to misleading conclusions about property value. Furthermore, when composing the review report, the reviewer needs to articulate their findings and judgments clearly, which involves a solid understanding of the implications of these assumptions.

Options that limit the awareness of these concepts only to either reviewing or writing the report miss the importance of having this understanding at all stages of the appraisal review process. Likewise, restricting it solely to proposed construction projects ignores the broader application and relevance of these principles across various types of