Which of the following is an example of when an extraordinary assumption might be used in appraisal?

An extraordinary assumption is a presumption about a fact that, if found to be false, could alter the appraiser’s opinions or conclusions. In the context of appraisal, using an extraordinary assumption generally arises when an appraiser lacks complete information about a property and must form a conclusion based on what they believe to be true.

In this scenario, the selection of the situation involving uncertainty about environmental contamination illustrates an appropriate use of an extraordinary assumption. The appraiser might assume that the property is free from contamination when there is insufficient information to confirm this. If the assumption is proven false, it could lead to a significant change in the appraised value or opinion.

Using an extraordinary assumption allows the appraiser to provide an opinion under conditions of uncertainty, which can be crucial for financial decisions, subject to the caveat that such assumptions should be disclosed and appropriately qualified in the appraisal report.

On the other hand, options involving known contamination or fully remediated properties indicate scenarios where assumptions are less appropriate, as clear data already exists, negating the need for the extraordinary assumption. In situations where the legal status is unknown, while there may be some level of uncertainty, determining legal status generally does not fit the definition of an extraordinary assumption as it typically pertains more to