Exposure time vs marketing time, just for fun

[Sadie]

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.

I don't disagree, however, marketing time is usually not part of the problem we are asked to solve. The assumption of MVE is if the property had sold on the effective date, not if it had been listed. Getting into marketing times is a whole other ball of string that requires much more research, analysis and explanation, think relocation appraisals.

 

[George Hatch]

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

As with any other opinion in the appraisal, "summarize" is the thing, however that doesn't necessarily mean breaking out the regression analysis and the array of charts and graphs. I keep it simple:

The closed sales demonstrate a range of DOMS from 2-40 days, which is also common among the less directly comparable sales data I analyzed during the course of this assignment. The subject's marketability is similar to these properties so on that basis my opinion of the exposure time is 1-2 months, assuming adequate exposure by competent brokerage. Attempts to market the property is less time than this may require discounting.​

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You could boilerplate this in less than 2 minutes, and then simply change the number of days for each analysis or make any other edits on the fly. Not time consuming, not difficult to explain, and not difficult for a reader to understand.

 

[glenn walker]

I don't disagree, however, marketing time is usually not part of the problem we are asked to solve. The assumption of MVE is if the property had sold on the effective date, not if it had been listed. Getting into marketing times is a whole other ball of string that requires much more research, analysis and explanation, think relocation appraisals.

The wonderful part about working with real buyer-sellers and market participants is they place these questions into easy and simple definition and not words smithing or market values. A Seller will ask me how long do you think this will take for us to list -sell and close escrow ? No price is number one concern, not to low and not to high. If they are a transfer who needs a immediate sale to move out of State we may have to list and market it below what it's true market value would be if they had more time to expose and market it. The fact is the Listing Price Controls both exposure and marketing time and days on market ( not value )

 

[ZZGAMAZZ]

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.

I just finished a McKissock online course on adjustments. The lecturer said "There is no such thing as right or wrong, because you are right as long as you can justify your adjustments." I really like that principle, although to "follow the rules" probably will allow me to completed about 1 assignment per week.

 

[Mark K]

I just finished a McKissock online course on adjustments. The lecturer said "There is no such thing as right or wrong, because you are right as long as you can justify your adjustments."

I'll bet there are about 50 state appraisal boards that would dispute that concept.

 

[J Grant]

The wonderful part about working with real buyer-sellers and market participants is they place these questions into easy and simple definition and not words smithing or market values. A Seller will ask me how long do you think this will take for us to list -sell and close escrow ? No price is number one concern, not to low and not to high. If they are a transfer who needs a immediate sale to move out of State we may have to list and market it below what it's true market value would be if they had more time to expose and market it. The fact is the Listing Price Controls both exposure and marketing time and days on market ( not value )

That is why days on market ( fact ) and marketing time ( list time estimated to get a price ) are different concepts than market exposure, which is an opinion of estimated time to achieve a market value equivalent price.

Real buyers and sellers are under no obligation to buy, sell, or list at "market value". Appraisers on the other hand, are tasked with opinions of market value (from the real prices and activity) An appraisal of MV is a model of value, and not expected to be literal - some appraisers fail to understand that, imo. It is frustrating of course to RE agents, who see a buyer willing to pay a price, and simply can not understand why since a buyer is willing to pay it, why can't it just appraise for that ( well, in a waiver, it does ! )

 

[J Grant]

I just finished a McKissock online course on adjustments. The lecturer said "There is no such thing as right or wrong, because you are right as long as you can justify your adjustments." I really like that principle, although to "follow the rules" probably will allow me to completed about 1 assignment per week.

If the lecturer literally said that ( and perhaps that one sentence was posted lacking context ) , then Mckissok is in deep doo doo.

Though there is no official benchmark of "right or wrong" for an adjustment, it should make sense when applied and come from market data, be reflected in prices and narrow the range in the grid, and able to be extracted from the comps themselves. An adjustment is reflected in prices and if measurable then patterns are seen in enough data. And adjustment is a model of course, since in the real prices the amounts can vary. Out in the market, buyers "adjust" with their wallets, paying more for positive features and expecting a discount for adverse features. Since they should be reflected in data and sales of similar properties, the adjustment can be judged as either credibly supported or not, credibly supported,

 

[ZZGAMAZZ]

If the lecturer literally said that ( and perhaps that one sentence was posted lacking context ) , then Mckissok is in deep doo doo.

Though there is no official benchmark of "right or wrong" for an adjustment, it should make sense when applied and come from market data, be reflected in prices and narrow the range in the grid, and able to be extracted from the comps themselves. An adjustment is reflected in prices and if measurable then patterns are seen in enough data. And adjustment is a model of course, since in the real prices the amounts can vary. Out in the market, buyers "adjust" with their wallets, paying more for positive features and expecting a discount for adverse features. Since they should be reflected in data and sales of similar properties, the adjustment can be judged as either credibly supported or not, credibly supported,

That's what he meant I'm sure. My post didn't provide context. It's interesting that McKissock offers two similar SCA adjustment courses, one online and another on-line based on a specific time, although the content of the two courses was about 90% different, and I "presume" that I get CE credit for both, although I enrolled in the unlimited course option that has allowed me to take about 7 courses already this year, rather than the month before my license expires like every year in the past.

 

[ZZGAMAZZ]

That is why days on market ( fact ) and marketing time ( list time estimated to get a price ) are different concepts than market exposure, which is an opinion of estimated time to achieve a market value equivalent price.

Real buyers and sellers are under no obligation to buy, sell, or list at "market value". Appraisers on the other hand, are tasked with opinions of market value (from the real prices and activity) An appraisal of MV is a model of value, and not expected to be literal - some appraisers fail to understand that, imo. It is frustrating of course to RE agents, who see a buyer willing to pay a price, and simply can not understand why since a buyer is willing to pay it, why can't it just appraise for that ( well, in a waiver, it does ! )

Either your explanation of marketing time is fuzzy, or my understandinig of the concept is caddywompus (probably the latter)...

 

[Sadie]

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 !

Well, yeah, the more recent data is going to be more accurate than the dated stuff. TBH, I think this is something appraisers care about, but the clients have not a whole lot of interest in, other than the fact that you put something reasonable in the report.