Definition of exposure time

Discussion in 'Urgent - Help Needed' started by chicago guy, Jan 22, 2009.

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  1. chicago guy

    chicago guy Junior Member

    0
    Jan 29, 2008
    Professional Status:
    Certified Residential Appraiser
    State:
    Illinois
    Does anyone have a clean definition of exposure time? I am haveing a bad brain day and am trying to explain the difference between exposure time and days on market per MLS for a house that was reduced significantly before selling. Thanks in advance for any assistance.
     
  2. David Dietz

    David Dietz Member

    0
    Oct 30, 2006
    Professional Status:
    Certified Residential Appraiser
    State:
    Florida
    exposure time
    1. The time a property remains on the market.

    2. The estimated length of time the property interest being appraised would have been offered on the market prior to the hypothetical consummation of a sale at market value on the effective date of the appraisal; a retrospective estimate based on an analysis of past events assuming a competitive and open market. Exposure time is always presumed to occur prior to the effective date of the appraisal. The overall concept of reasonable exposure encompasses not only adequate, sufficient and reasonable time but also adequate, sufficient and reasonable effort. Exposure time is different for various types of real estate and value ranges and under various market conditions. (Appraisal Standards Board of The Appraisal Foundation, Statement on Appraisal Standards No. 6, "Reasonable Exposure Time in Real Property and Personal Property Market Value Opinions")
    Market value estimates imply that an adequate marketing effort and reasonable time for exposure occurred prior to the effective date of the appraisal. In the case of disposition value, the time frame allowed for marketing the property rights is somewhat limited, but the marketing effort is orderly and adequate. With liquidation value, the time frame for marketing the property rights is so severely limited that an adequate marketing program cannot be implemented. (The Report of the Appraisal Institute Special Task Force on Value Definitions qualifies exposure time in terms of the three above-mentioned values.)
     
  3. PropertyEconomics

    PropertyEconomics Elite Member

    0
    Jun 19, 2007
    Professional Status:
    Certified General Appraiser
    State:
    New Mexico
    Exposure time is the amount of time the subject property would have needed to have been on the market (exposed) to sell at the appraisers opinion of market value as of the effective date of the report. Exposure is a retrospective look back at days on market under the definition of market value to which the property is being appraised.

    The estimated length of time the property interest being appraised would have been offered on the market prior to the hypothetical consummation of a sale at market value on the effective date of the appraisal; a retrospective estimate based on an analysis of past events assuming a competitive and open market. Exposure time is always presumed to occur prior to the effective date of the appraisal. The overall concept of reasonable exposure encompasses not only adequate, sufficient and reasonable time but also adequate, sufficient and reasonable effort. Exposure time is different for various types of real estate and value ranges and under various market conditions. (Appraisal Standards Board of The Appraisal Foundation)
     
  4. RSW

    RSW Elite Member

    3
    Feb 18, 2002
    Professional Status:
    Certified Residential Appraiser
    State:
    Tennessee
    Marketing time is a historic event where as exposure time is a future event as of the effective date of the appraisal report.
     
  5. PropertyEconomics

    PropertyEconomics Elite Member

    0
    Jun 19, 2007
    Professional Status:
    Certified General Appraiser
    State:
    New Mexico

    You have these backwards.
     
  6. redfish

    redfish Senior Member

    13
    Sep 2, 2007
    Professional Status:
    Certified Residential Appraiser
    State:
    Michigan
    Active listings=exposure time

    Closed sales/Pending sales=marketing time

    Right?
     
  7. Michigan CG

    Michigan CG Moderator Staff Member Moderator

    23
    Nov 1, 2006
    Professional Status:
    Certified General Appraiser
    State:
    Michigan

    0123456789
     
  8. chicago guy

    chicago guy Junior Member

    0
    Jan 29, 2008
    Professional Status:
    Certified Residential Appraiser
    State:
    Illinois
    Thanks all. I got what I needed to help explain my point. I was trying to use it for one of the comparables that was about 30% over priced and sold within 90 days when priced more prudently.
     
  9. RSW

    RSW Elite Member

    3
    Feb 18, 2002
    Professional Status:
    Certified Residential Appraiser
    State:
    Tennessee
    Sorry! Bad head cold. That's what I get for taking almost 3 weeks off for vacation. Came back with a cold. Bummer!
     
  10. PropertyEconomics

    PropertyEconomics Elite Member

    0
    Jun 19, 2007
    Professional Status:
    Certified General Appraiser
    State:
    New Mexico

    You too have those backwards .....

    Exposure is a "retrospective" look back in time

    Marketing time is a "prospective" look into the future.

    Question to all: Do you know which time MUST be reported within an appraisal report according to USPAP?
     
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