If an appraiser assumes a condition to be true that does not exist for the purposes of analysis, what is this called?

The situation described in the question refers to a "hypothetical condition," which is a key term in appraisal and valuation. A hypothetical condition is an assumption made by the appraiser that is contrary to fact but is needed for the analysis or to provide a specific type of appraisal. This concept is vital in situations where the appraiser must analyze a scenario that does not reflect the actual state of affairs, such as estimating the value of a property that has not yet been built or assuming that certain improvements have been made that have not yet occurred.

By recognizing this condition, appraisers can provide stakeholders with insights based on theoretical situations, which can be critical in various scenarios such as feasibility studies or when dealing with intended use cases of property that are not currently in existence. Hypothetical conditions allow for a flexible framework that supports a variety of valuation scenarios, emphasizing the importance of clear communication about the limits of such analyses.