Certified Residential Appraiser Practice Exam

What does exposure time signify in appraisal?

1. The time it takes to prepare a property for sale

2. The period assumed to have occurred before the appraisal date

3. The duration needed to close a sale

4. The time from listing until the property sells

The correct answer is: The period assumed to have occurred before the appraisal date

Exposure time in appraisal refers to the hypothetical period that a property has been exposed to the market prior to the appraisal date. This concept is essential because it provides appraisers with an understanding of the market dynamics and the competitive environment surrounding the property. By assessing the time a property would likely remain on the market if properly priced, appraisers can gauge the property's marketability and derive a more accurate valuation. This period is not about the actual time it takes to close a sale or prepare a property for sale; rather, it focuses on the timeframe assumed to reflect general market conditions and trends relevant to the valuation date. By considering this duration, appraisers can incorporate a better estimate of value that aligns with market expectations.