Extraordinary Assumptions Question

[MASSAPP]

Hi appraisersforum folks,

I have a general question about extraordinary assumptions.

According to USPAP, an extraordinary assumption is defined as the following: an assumption, directly related to a specific assignment, as of the effective date of the assignment results, which, if found to be false, could alter the appraiser’s opinion or conclusions.

My question is how "directly related to a specific assignment" is typically construed.

I guess my question boils down to what makes an ordinary assumption extraordinary.

The following items I am considering labeling as extra ordinary....but they are more just problems which could be related to any given property...not sure if they should be considered extra ordinary or not as they are not too..directly related to a specific assignment.

The appraiser assumed the use of the land and improvements is confined within the boundaries or property lines of the property described and that there is no encroachment or easement unless otherwise noted in the report.


It is assumed that the legal description, status of title, and other matters legal in nature are correct. No responsibility is assumed by the appraiser for such legal matters, and this appraisal should not be construed as an opinion on such legal matters.

would you consider these extraordinary?

 

[George Hatch]

We routinely employ a lot of assumptions; so routinely that we commonly refer to them as standard assumptions. For instance, it's pretty standard to assume - in lieu of information to the contrary - that the title is marketable, that there are no unusual easements or encroachments, etc.

As assignment-specific assumption would be one that's atypical and specific to the one situation, like assuming that old addition that appears to have been onsite forever is permissible, or that the interior quality and condition of the structure you're appraising on the exterior-only inspection is more/less consistent with the conditions you're seeing on the outside.

The use of such assumptions enables us to complete the assignment without having to go to heroic and unproductive effort to find out for sure, but since they are atypical they do bear separate disclosure in the report so the reader can understand the limitations involved. In general, more assumptions mean more limitations.

 

[Mike Kennedy]

Assumption Vs. Extraordinary Assumption

 

[Pittsburgh Pete]

Hi appraisersforum folks,

I have a general question about extraordinary assumptions.

According to USPAP, an extraordinary assumption is defined as the following: an assumption, directly related to a specific assignment, as of the effective date of the assignment results, which, if found to be false, could alter the appraiser’s opinion or conclusions.

My question is how "directly related to a specific assignment" is typically construed.

I guess my question boils down to what makes an ordinary assumption extraordinary.

The following items I am considering labeling as extra ordinary....but they are more just problems which could be related to any given property...not sure if they should be considered extra ordinary or not as they are not too..directly related to a specific assignment.

The appraiser assumed the use of the land and improvements is confined within the boundaries or property lines of the property described and that there is no encroachment or easement unless otherwise noted in the report.


It is assumed that the legal description, status of title, and other matters legal in nature are correct. No responsibility is assumed by the appraiser for such legal matters, and this appraisal should not be construed as an opinion on such legal matters.

would you consider these extraordinary?

Those are every day, run of the mill assumptions--nothing extraordinary about them.