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  #1  
Old 01-22-2009, 02:45 PM
chicago guy chicago guy is offline
 
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Default Definition of exposure time

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.
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Old 01-22-2009, 02:59 PM
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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.)
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Old 01-22-2009, 03:00 PM
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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)
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Old 01-22-2009, 03:01 PM
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Marketing time is a historic event where as exposure time is a future event as of the effective date of the appraisal report.
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Old 01-22-2009, 03:02 PM
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Quote:
Originally Posted by RSW View Post
Marketing time is a historic event where as exposure time is a future event as of the effective date of the appraisal report.

You have these backwards.
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Old 01-22-2009, 03:04 PM
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Active listings=exposure time

Closed sales/Pending sales=marketing time

Right?
  #7  
Old 01-22-2009, 03:18 PM
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Quote:
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.) See also marketing time.
Quote:
Marketing Time
1. The time it takes an interest in real property to sell on the market sub-sequent to the date of an appraisal.
2. Reasonable marketing time is an estimate of the amount of time it might take to sell an interest in real property at its estimated market value during the period immediately after the effective date of the appraisal; the anticipated time required to expose the property to a pool of prospective purchasers and to allow appropriate time for negotiation, the exercise of due diligence, and the consummation of a sale at a price supportable by concurrent market conditions. Marketing time differs from exposure time, which is always presumed to precede the effective date of the appraisal. (Advisory Opinion 7 of the Appraisal Standards Board of The Appraisal Foundation and Statement on Appraisal Standards No. 6, "Reasonable Exposure Time in Real Property and Personal Property Market Value Opinions" address the determination of reasonable exposure and marketing time.) See also exposure time.

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Old 01-22-2009, 03:27 PM
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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.
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Old 01-22-2009, 03:28 PM
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Quote:
Originally Posted by PropertyEconomics View Post
You have these backwards.
Sorry! Bad head cold. That's what I get for taking almost 3 weeks off for vacation. Came back with a cold. Bummer!
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Old 01-22-2009, 03:54 PM
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Quote:
Originally Posted by redfish View Post
Active listings=exposure time

Closed sales/Pending sales=marketing time

Right?

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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