USPAP Practice Exam 2025 – Complete All-in-One Guide to Mastering Professional Appraisal Standards

An extraordinary assumption is utilized in an appraisal to account for missing or incomplete information that is necessary for the valuation process. This assumption allows the appraiser to proceed with the appraisal by making a hypothesis about a condition or variable that cannot be directly verified at the time and is crucial to the appraisal's conclusions. For example, if an appraiser knows that crucial information about the physical condition or occupancy of a property is missing, they may proceed by making an extraordinary assumption about that information, ensuring the appraisal can still be conducted despite this gap.

In contrast, the other options are not applicable scenarios for the use of extraordinary assumptions. Extraordinary assumptions are not limited to specific property types, not simply based on the appraiser's discretion without justifiable cause, and certainly do not apply solely to properties valued under a specific threshold, such as $100,000. Such assumptions must always be carefully documented, and their validity must be considered in the context of the appraisal assignment, emphasizing the importance of making informed, justified decisions in the appraisal process.