What is the primary purpose of using extraordinary assumptions in appraisal?

The primary purpose of using extraordinary assumptions in appraisal is to enable credible opinions and conclusions based on uncertain information. Extraordinary assumptions are conditions that are assumed to be true for the purpose of the appraisal but for which there is a lack of data or certainty. They are particularly important when certain factors, such as property conditions or market conditions, cannot be fully verified. By making these assumptions, appraisers are able to provide a professional opinion on value that acknowledges the limitations or uncertainties inherent in the data.

Using extraordinary assumptions allows appraisers to address unique circumstances, ensuring that their valuation remains credible despite the risks associated with those assumptions. This practice helps formulate a reasoned basis for the conclusions reached and maintains the integrity of the appraisal process, ultimately supporting stakeholders in making informed decisions based on the analysis provided.