Assumption vs extraordinary Assumptions

[PushinValue]

Looking through USPAP and extraordinary assumptions are clearly defined. What are standard assumptions used in a report and what are the differences between the two?

 

[George Hatch]

Standard assumptions are...standard across most assignments. The forms include a hardwired list of them.​

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Extraordinary assumptions are....non-standard and not necessarily present in any assignment other than this one. (I have reason to believe there's a permit for the addition but I don't know for sure)​

Another way to express the meaning of an EA is to think of them as being assignment-specific. We're not required to use the term "EA" in our reports and indeed most readers won't understand the meaning of the term anyway. You can just say the assignment is based on part on this assumption, but if it turns out to be incorrect then it would affect your opinions and conclusions.

Say what you do, do what you say.

 

[sputnam]

Standard assumptions are...standard across most assignments. The forms include a hardwired list of them.​

​

Extraordinary assumptions are....non-standard and not necessarily present in any assignment other than this one. (I have reason to believe there's a permit for the addition but I don't know for sure)​

Another way to express the meaning of an EA is to think of them as being assignment-specific. We're not required to use the term "EA" in our reports and indeed most readers won't understand the meaning of the term anyway. You can just say the assignment is based on part on this assumption, but if it turns out to be incorrect then it would affect your opinions and conclusions.

Say what you do, do what you say.

Right. You do not have to say 'extraordinary'. You do have to clearly state the assumption and state that its use might affect assignment results.

 

[Terrel L. Shields]

A drive by. I see a water meter in the front yard. I also see a well house. I assume that the property has water service. I make an extraordinary assumption that the property uses city water or at least can hook up to it.

 

[J Grant]

Most appraisals have built-in assumptions - whether explained or not- ( cert res forms have pre-printed assumptions)

we assume most properties are not located on a fault line of a volcano or have poisoned well water or that the foundation is not severely cracked, etc. We can not know those things and normally do not inspect for such things, it is just an assumption or it would be impossible to appraise anything without thousands of dollars of enfiroment,al, structural and other inspections.

 

[George Hatch]

All appraisals include assumptions and the limitations which go with those assumptions. There is no such thing as an assumption-free appraisal. Some assignments just require the use of more assumptions - and have more of the limiting conditions which go with those assumptions - than others.

Once an appraiser wraps their head around that fact it becomes a lot easier to understand how an appraiser can reasonably proceed in various appraisal situations. Including those where there is no inspection or an exterior-only inspection being performed by the appraiser.

 

[sputnam]

A drive by. I see a water meter in the front yard. I also see a well house. I assume that the property has water service. I make an extraordinary assumption that the property uses city water or at least can hook up to it.

Why would you assume? You take an online look at the water bill associated with the address? Or, you call the City and ask them.