Confused about USPAP, Marketing &/or Exposure Time

[CANative]

I wonder what the ratio of appraisers is who know/don't know the difference between exposure time and marketing time when checking one of those 3 boxes.

 

[Rich Heyn]

Rich, it is not exactly an in-depth analysis of marketing time that is required, but it is required by FNMA.

I'm aware of the requirement, but I don't think it amounts to a supplemental standard. Not everything from the mouth of Fannie is a supplemental standard.

 

[Rich Heyn]

I wonder what the ratio of appraisers is who know/don't know the difference between exposure time and marketing time when checking one of those 3 boxes.

Every time that I bring up the topic while teaching 7-hr. USPAP I get a lot of deer-in-the-headlights looks.

 

[Couch Potato]

Not a question of type of sale.

How about appraisal for foreclosure or REO sale?

It is not a question why or by whom the property is sold, but the definition of value used. A lack of exposure time can be the subject of analysis as much as normal exposure time.

 

[Couch Potato]

Required research and analysis not required by USPAP.

I'm aware of the requirement, but I don't think it amounts to a supplemental standard. Not everything from the mouth of Fannie is a supplemental standard.

Why would you not consider it a supplemental standard? It is required by FNMA and in no way optional. It is not required by USPAP. I understand clearly that many aspects of FNMA's selling guide are simply guidelines and recommendations, but the wording on marketing time is quite strong.

 

[moh malekpour]

It is not a question why or by whom the property is sold, but the definition of value used. A lack of exposure time can be the subject of analysis as much as normal exposure time.

Ok, lets change it to foreclosure or REO value. Where is the exposure time for that?

 

[Couch Potato]

Exposure time is not always measured in days.

It would be dependent on how those values are defined. Likely they are defined with little or no exposure time but not necessarily. "Foreclosure Value" would likely state a value where the property is sold at auction. Exposure to the market would be the length of the auction would it not? How long would you estimate the auction will last? In a market where many people are likely to bid and foreclosures have a significant marketing time the exposure time estimate would be longer than in a market with no interest in foreclosures and limited required marketing. The value you get for foreclosure value would be greatly affected by your expectation of the length of that auction would it not?

 

[moh malekpour]

It would be dependent on how those values are defined. Likely they are defined with little or no exposure time but not necessarily. "Foreclosure Value" would likely state a value where the property is sold at auction. Exposure to the market would be the length of the auction would it not? How long would you estimate the auction will last? In a market where many people are likely to bid and foreclosures have a significant marketing time the exposure time estimate would be longer than in a market with no interest in foreclosures and limited required marketing. The value you get for foreclosure value would be greatly affected by your expectation of the length of that auction would it not?

You are mixing the exposure time with the marketing time. For market value, the time of exposure to market happens prior to the time of conclusion of value . For forcluser value the conclusion value is based on the time after that value conclusion which is marketing time. If the time for establishing value is after value conclusion or effective date, it is called marketing time. That value is conditional upon the marketing time after that value conculsion. if the time for value conclusion is prior to that conclusion is exporue time as it has been exposed already. That value which is the market value is unconditional as it has already had exposed the timing for that value.

 

[Fred]

I wonder what the ratio of appraisers is who know/don't know the difference between exposure time and marketing time when checking one of those 3 boxes.

Every time that I bring up the topic while teaching 7-hr. USPAP I get a lot of deer-in-the-headlights looks.

Hmm. Perhaps those startled looks have some merit.

I just checked my American Institute Dictionary, my Society of Real Estate Appraisers dictionary, my Harrison dictionary and a couple of perhaps lesser known dictionaries– and cannot find the term “marketing time’ defined.

The passage from Fannie that Greg excerpted seems to describe the period of time preceding any hypothetsized sale. Regardless of the nomenclature used, isn’t the point to find out what period of time the GSE’s are asking about.

Does anyone have a source that indicates Fannie is asking for an estimate of time that postdates the effective date? And what would be the meaning of this estimate?

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In the 2005 version of USPAP the requirement to report exposure time was deleted from SMT-6. This did not affect the requirement to develop an estimate of exposure time in market value assignments

.Mention of such a requirement no longer appears in SMT-6. However, would it make any sense that an appraiser is required to develop an estimate, but not report it? No. So maybe removal of that reference is not removal of the reporting requirement.

There is something new in the 2006 USPAP that I can’t wait to put to the test in litigation assignments. Now that credible is defined – as “worthy of belief” – it may create an implied requirement to make sense.

With al that in mind:
1. “Exposure time” is part of your “analysis.”
2. “Analysis” is part of the “scope of work.”
3. You “must disclose the scope of work.”
Therefore:_____________ You must disclose exposure time?

 

[Lobo Fan]

I always include the days on market in the comp grid.