Reasonable Exposure Time & 'FAIR Market Value'

[George Hatch]

The requirement in USPAP to develop an opinion of exposure time in MV opinions is conditioned on exposure time being one of the components to the definition being used. Not all MV definitions are created equal. At issue here is whether the "component" need be explicitly stated or if its an implicit assumption in this definition.

Our requirements to disclose and communicate the assumptions and limiting conditions of our work are there to protect our own positions as much as to help the readers to understand the perspectives we are using in that work.

 

[brady2000]

Thank you all for your input. Not to split hairs or anything but, CAn and Terrel you both quote the same exact source as me for FMV but you stopped writing before I did. So ultimately I suppose it's in the eyes of the beholder as to what is more applicable to the intended use. I do find not using forced sales, using sales in the same market place/location, and utilizing MLS or other sales sources if it's common practice applicable to the definition of FMV for real property as well. The latter part of the definition appears to further clarify specific pertinent aspects of the definition. As long as it's clearly stated that the appraised value does not include personal property, I see no reason why the entire definition(from Treasury Regulations, Subchapter B, Sec. 20.2031-1)should not be noted, but I'm open to suggestions.

And Sputnam,
You're correct, USPAP requires reporting of reasonable exposure time when it's a component of the market value definition. Likewise, not only is it 'good' to cite the source of value definition used, it's a reporting requirement as well.

Which leads me to another interesting question.... Where in the URAR does it cite the definition of market value utilized? Or is it enough that it's pre-printed in a Fannie/Freddie created document?

 

[George Hatch]

The Fannie forms have been cited as the reference on the same basis that the level of detail they use has been deemed to suffice as a Summary Appraisal Report even though a couple of the required items are only stated on the form instead of summarized and other required items are omitted altogether.

That's the main reason most appraisers include repair addenda in every report they submit.