Property Valuation
In Minnesota, 'hypothetical conditions' in an appraisal differ from extraordinary assumptions in that:
AHypothetical conditions are based on true facts; extraordinary assumptions are based on false facts
BHypothetical conditions assume facts that are known to be contrary to actual existing conditions (such as valuing a property as if it were uncontaminated when known contamination exists)✓ Correct
CHypothetical conditions are only used in commercial appraisals
DThere is no meaningful difference
Explanation
A hypothetical condition in appraisal is based on a statement known to be contrary to actual fact—for example, valuing a property 'as if' it were fully remediated when contamination exists. USPAP permits hypothetical conditions only when necessary and requires disclosure. They differ from extraordinary assumptions, which address uncertain (not false) facts.
Related Minnesota Property Valuation Questions
- An absorption rate in a Minnesota market analysis represents:
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