Question

When developing an appraisal, an appraiser presumes that an underground storage tank on the subject property is not leaking. The appraiser does not know whether or not the tank is leaking. This is an example of:

A) Extraordinary assumption
B) Property inspection
C) Unbiased evaluation
D) Environmental certification

Answer 1

An appraiser presuming that an underground storage tank is not leaking for an appraisal without concrete knowledge is termed an 'Extraordinary Assumption'. This hypothetical presumption affects the property valuation where definitive information is unavailable.

Step-by-step explanation:

When developing an appraisal and an appraiser presumes an underground storage tank on the subject property is not leaking without definitive knowledge of the tank's condition, this is known as an Extraordinary Assumption. An extraordinary assumption is a presumption, taken as true for the purposes of an appraisal, about a condition that could affect the property's value, despite the appraiser not having confirmed that condition. Extraordinary assumptions are necessary when definitive information is not available and they allow an appraiser to provide a value conclusion under a hypothetical condition. It does not fall under the categories of property inspection, unbiased evaluation, or environmental certification, as those involve different aspects of property appraisal and evaluation.