Exposure Time

[Mark Goodwin]

Ideas needed on how to address the exposure time issue as added by USPAP? Added definition. where should it be addressed?

 

[PropertyEconomics]

It should probably be addressed in the addenda under a heading of Exposure Time ... I would provide the definition and follow Statement 6 as to how it is determined and why it is reported.

Its not really a new item .. its reporting is new for residential work .. it has been in USPAP for a long time (I have not gone back to look how long) ... but it has been there and should have been in our work files.

 

[gregb]

Since 1990 this has been in the addendum to res reports, but may need some updating to meet new USPAP.

Reasonable Exposure Time
Exposure time is always presumed to precede the effective date of the appraisal. It is the estimated length of time the property would have been offered on the market, prior to the hypothetical sale, at the appraised value, on the effective date of the appraisal. It is a retrospective estimate based on an analysis of past events assuming a competitive and open market. This includes not only adequate, sufficient and reasonable time, but adequate, sufficient and reasonable effort. It is often expressed as a range and is based on the following:
1. Statistical information about days on the market, most commonly obtained from the local Multiple Listing Service.
2. Information gathered through sales verification.
3. Interviews with market participants.
Under current market conditions, the reasonable exposure time for the subject property is approximately three to six months. This is based on the analyses of current market trends in the general area and takes into account the size, condition and price range of the subject property and surrounding area. It presupposes that the listed price would be at or near the appraised value. It also assumes aggressive professional marketing by reputable local real estate offices.

 

[incognito]

Ideas needed on how to address the exposure time issue as added by USPAP?

FYI, there is nothing new about the USPAP requirement for the development of exposure time USPAP 2010-11: SR 1-2(c)(iv)comment

http://www.USPAP.org/USPAP/stds/sr1_2.htm

So really you should be DOING nothing new with regards to estimating exposure time. It should already be documented in your appraisal file. All USPAP 2012-13 is requiring NEW is that you now report it.

So, in answer to your question, just verbally express what has already been developed and retained in your file, anywhere you please within the report...


You want to bet 9 out of 10 appraisers did not know this?

 

[Flygirl 152]

Since 1990 this has been in the addendum to res reports, but may need some updating to meet new USPAP.

Reasonable Exposure Time
Exposure time is always presumed to precede the effective date of the appraisal. It is the estimated length of time the property would have been offered on the market, prior to the hypothetical sale, at the appraised value, on the effective date of the appraisal. It is a retrospective estimate based on an analysis of past events assuming a competitive and open market. This includes not only adequate, sufficient and reasonable time, but adequate, sufficient and reasonable effort. It is often expressed as a range and is based on the following:
1. Statistical information about days on the market, most commonly obtained from the local Multiple Listing Service.
2. Information gathered through sales verification.
3. Interviews with market participants.
Under current market conditions, the reasonable exposure time for the subject property is approximately three to six months. This is based on the analyses of current market trends in the general area and takes into account the size, condition and price range of the subject property and surrounding area. It presupposes that the listed price would be at or near the appraised value. It also assumes aggressive professional marketing by reputable local real estate offices.

What part of this would not meet the current USPAP? At first glance, I think this is a succint explanation which would still apply today.

 

[PropertyEconomics]

Since 1990 this has been in the addendum to res reports, but may need some updating to meet new USPAP.

Reasonable Exposure Time
Exposure time is always presumed to precede the effective date of the appraisal. It is the estimated length of time the property would have been offered on the market, prior to the hypothetical sale, at the appraised value, on the effective date of the appraisal. It is a retrospective estimate based on an analysis of past events assuming a competitive and open market. This includes not only adequate, sufficient and reasonable time, but adequate, sufficient and reasonable effort. It is often expressed as a range and is based on the following:
1. Statistical information about days on the market, most commonly obtained from the local Multiple Listing Service.
2. Information gathered through sales verification.
3. Interviews with market participants.
Under current market conditions, the reasonable exposure time for the subject property is approximately three to six months. This is based on the analyses of current market trends in the general area and takes into account the size, condition and price range of the subject property and surrounding area. It presupposes that the listed price would be at or near the appraised value. It also assumes aggressive professional marketing by reputable local real estate offices.

This is picky but exposure time is not measured under "current market conditions" but based on "historical market conditions" .. and the exposure time would not be "is approximately" but "would have been approximately".
I would presuppose that the listing price "would have been" and assumes aggressiving marketing "would have been" ..... etc..

The look of exposure is backwards ie retrospective.

 

[NorthTexValuation]

Since 1990 this has been in the addendum to res reports, but may need some updating to meet new USPAP.

Reasonable Exposure Time
Exposure time is always presumed to precede the effective date of the appraisal. It is the estimated length of time the property would have been offered on the market, prior to the hypothetical sale, at the appraised value, on the effective date of the appraisal. It is a retrospective estimate based on an analysis of past events assuming a competitive and open market. This includes not only adequate, sufficient and reasonable time, but adequate, sufficient and reasonable effort. It is often expressed as a range and is based on the following:
1. Statistical information about days on the market, most commonly obtained from the local Multiple Listing Service.
2. Information gathered through sales verification.
3. Interviews with market participants.
Under current market conditions, the reasonable exposure time for the subject property is approximately three to six months. This is based on the analyses of current market trends in the general area and takes into account the size, condition and price range of the subject property and surrounding area. It presupposes that the listed price would be at or near the appraised value. It also assumes aggressive professional marketing by reputable local real estate offices.

I love boiler plate statements like that.

Therefore I'm "borrowing" it from you.

Thank you.

 

[Flygirl 152]

This is picky but exposure time is not measured under "current market conditions" but based on "historical market conditions" .. and the exposure time would not be "is approximately" but "would have been approximately".
I would presuppose that the listing price "would have been" and assumes aggressiving marketing "would have been" ..... etc..

The look of exposure is backwards ie retrospective.

I don't think this is picky...I think it is significant. There are other threads and other forums where this is a heated area of debate, and many are concerned over liability. If exposure time is retrospective, and all the verbiage is changed the way you stated, then one would think stating the retrospective exposure time would not have an impact on liability for the appraiser since there is no way that someone can go back in time and sell their house.

 

[Riick]

Why not simply reference the Marketing Time check box Page 1 of the 1004?
Unless of course you've grossly over or under estimated the subject's value,
it would most probably have sold as quickly/slowly as the average property.

/

 

[George Hatch]

I base my opinion of exposure time primarily on the trends demonstrated by the comparable sales data. I include my opinion of exposure time in my Final Reconciliation of Value. That's what it's for - to provide context for your value conclusion.

We were on Fannie to include a section for exposure time (among other things) during their last form revamp but they ignored it. Maybe next time they'll pay attention. In my own forms I include a line for exposure time for each of my comps.