5 real estate assumptions to rethink

Mood of the Market

Real estate appraisal reports are almost always accompanied by a set of assumptions: statements or conditions that the appraiser assumed to be true for purposes of drawing some of the conclusions necessary to create an estimate of the home’s value. Interestingly, though, many appraisal reports give their basic set of assumptions the subtitle "Limiting Conditions." This implies that the assumptions may limit the validity of the appraisal findings in the event the assumptions turn out to be invalid.

For example, appraisers commonly assume that the land on which a home is built is not contaminated; if it turns out later that it is, all bets are off in terms of the property’s value.