Which type of assumption does not reflect a true condition in appraisal?

A hypothetical condition is a type of assumption utilized in appraisal that represents a situation that is contrary to known facts. It is a scenario that is imagined for the purpose of the analysis but does not reflect any real property circumstances. For instance, an appraiser might use a hypothetical condition to evaluate the property as if a particular improvement were made, even though that improvement does not actually exist. This allows the appraiser to assess the potential value or impact of such improvements without them being present.

In contrast, extraordinary assumptions involve circumstances that are considered to be true but are uncertain, serving as a basis for appraisals to derive conclusions. These assumptions may hinge on significant factors about the property or the market that, while uncertain, still align closely with real-world considerations. Market value assumptions relate specifically to the notion that the appraisal reflects the price a property would realize in a competitive market, while cost assumptions refer to estimates of the costs associated with constructing or improving the property.

Thus, the designation of a hypothetical condition as not reflecting a true condition in appraisal is accurate because it is purely theoretical and serves a specific analytical purpose rather than depicting actual property reality.