When can an extraordinary assumption be utilized in an appraisal?

An extraordinary assumption can be utilized in an appraisal when it is essential for the appraiser to develop credible opinions and conclusions. This concept is tightly linked to the fundamental requirement for appraisers to provide reliable and supported valuations. An extraordinary assumption is a hypothetical condition concerning a property or its market, which, if proven false, could alter the appraiser's opinions, conclusions, or results.

In practice, this means that the appraiser must determine that the assumption is necessary to arrive at a credible appraisal outcome. For example, if an appraiser assumes that certain renovations will be completed before the property is sold, this assumption must be justified by the need for it to reach a reliable conclusion about the property's value.

The option mentioning that it is required to develop credible opinions and conclusions reflects the essence of using extraordinary assumptions. They should not be used whimsically or based solely on the appraiser's desires or client requests; rather, they must have a valid basis that connects to the appraisal's objectives.