Property Valuation
What is an appraisal's 'hypothetical condition' as defined by USPAP?
AA condition the appraiser assumes might exist
BA condition that is contrary to what exists but is assumed for purposes of analysis — such as assuming a proposed building is complete as of the effective date✓ Correct
CA hypothetical market for properties with no comparables
DA condition applied only to commercial appraisals
Explanation
A hypothetical condition (USPAP) is an assumption that is contrary to known fact but is assumed for purposes of the analysis. For example, appraising a proposed building 'as if complete' as of today's date is a hypothetical condition. The appraiser must clearly state and justify any hypothetical conditions in the report.
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