Dictionary of Real Estate Terms: hypothetical condition
hypothetical condition
a condition contrary to fact. An appraisal may be based on an assumption that differs from existing conditions.
Example: Land is zoned for single-family housing. An appraiser is asked to appraise it as though the zoning permitted commercial use. The appraiser offers an opinion of value based on the hypothetical condition that the land has been rezoned, clearly and fully disclosing the matter.
