Exposure time vs marketing time, just for fun

[ZZGAMAZZ]

Exposure time is the estimated time it the property is exposed to the market BEFORE the effective date. Marketing time is the estimated time the property might take to sell AFTER the effective date. They are 2 separate things. This has always been part of my appraisal education. Easy to remember Exposure before, Marketing after.

Are you implying that the two should always be identical?

Edit: I meant to respond to #59.

 

[ZZGAMAZZ]

Yeah, well the party line on Prospective Value is that the exposure time as of that future effective date is based on an EA, not an HC, even though every single aspect of that valuation problem doesn't currently exist and some of them never will exist.

IMO the none of the elements of the future market condition, future date of completion and future condition on that future date exist, and ALL of them are hypotheticals. None of them are "I think so but I can't be sure" assumptions. So that makes my take on these elements of a Prospective Value scenario the minority opinion.

This post reminds me of a Philosphy class a long time ago. I still remember how my brain was going in circles, 4 decades ago.

 

[BRCJR]

Is it acceptable to just state the Exposure Time or does the conclusion need to be summarized like the H&BU?

 

[J Grant]

Exposure time is the estimated time it the property is exposed to the market BEFORE the effective date. Marketing time is the estimated time the property might take to sell AFTER the effective date. They are 2 separate things. This has always been part of my appraisal education. Easy to remember Exposure before, Marketing after.

While that is the correct concept, technically, it is not BEFORE the effective date. It is before, but also right up to include the effective date.

The market value opinion verbiage is AS OF the effective date. As of includes the effective date itself.

There have been posts from appraisers who use pending's as closed sales if they closed after the effective date but before the signature/report date. I disagree with that practice, but it does show that e appraisers are often considering data and market conditions after the eff date and up to the report date when sign it.

Question for the forum : If our comps sold in past 6 months showed an avg of 10 DOM, but in the last few weeks due to interest rate hikes we see market slowing and on our search see current listings are DOM average 30 days as of the effective date, which is the more accurate DOM market exposure estimate ?

I would say 30 days. Would like to hear what others would do !

 

[J Grant]

Exposure time is the estimated time it the property is exposed to the market BEFORE the effective date. Marketing time is the estimated time the property might take to sell AFTER the effective date. They are 2 separate things. This has always been part of my appraisal education. Easy to remember Exposure before, Marketing after.

Though before and after eff date is easily the way to remember it, again, we have to keep in mind the appraisal problem we are asked to solve ( marketability )

The question of exposure time is the time it WOULD take the property to sell at a MV price AS OF the effective date. So though while we consider the DOM of our past date sold comps, we are also considering the present eff date market conditions, and the DOM of listings as of the effective date.

 

[George Hatch]

I've never expressed my opinion of exposure time in days (I usually characterize is as less than a month when that's the case), but there's no reason an appraiser couldn't measure it in terms of 7-10 days if they wanted to.

 

[ZZGAMAZZ]

Is it acceptable to just state the Exposure Time or does the conclusion need to be summarized like the H&BU?

Awesome question.

 

[ZZGAMAZZ]

Though before and after eff date is easily the way to remember it, again, we have to keep in mind the appraisal problem we are asked to solve ( marketability )

The question of exposure time is the time it WOULD take the property to sell at a MV price AS OF the effective date. So though while we consider the DOM of our past date sold comps, we are also considering the present eff date market conditions, and the DOM of listings as of the effective date.

...WOULD HAVE TAKEN...

 

[J Grant]

...WOULD HAVE TAKEN...

Okay, they phrase it as would have taken as of the effective date. Which still, includes the effective date.

We make time/market condition adjustments to the sold comps to bring the price equivalnce to current effective date. So the DOM marketability should imo also be at current effective date equivalence

 

[glenn walker]

This post reminds me of a Philosophy class a long time ago. I still remember how my brain was going in circles, 4 decades ago.cause youi had a poor professor

Because you had a poor professor who did not know how to keep it simple and basic so anyone could comprehend it . But Philosophy is much like exposure time its not a science or a fact . Also Philosophy Professors are much like appraisers they philosophy and bull **** a lot.

Now I digress : There are more than a few on here who know what they are talking about, but I would place the most weight on Georges description as being most solid and realistic when applied to residential appraisals. The truth is Exposures Time in residential is usually similar to DOM.

Back in the dark ages and Prior to Internet-and Electronic MLS Systems when we used MLS Books exposure and marketing time and days on market were usually way longer than what we see today.
In my opinion it should be eliminated on residential and only confined to Commercial and Land and maybe Rural. It has no practical use in Urban or Highly Dense Suburban markets.

Now think about that Philosophy Class you had In College and I am your Loony Professor. Next think about residential exposure time. ** Bingo- Yhahtzee the Bell may just ring and you will realize it's at best a poor Philosophical like theory, and it can be twisted and bent 100 ways to Sunday. The best part is there is no such thing as a right or wrong answer your estimate or opinion is as good as mine or anyone else's.