Course Description and Outline
CPD 117: Time is Money: Market Exposure and Property Value
Pre-requisite: There are no formal prerequisites for this course, but it is assumed that students are familiar with appraisal concepts, including the three approaches to value, direct comparison, cost, and income, and the application of these methods. Students who require a refresher on appraisal fundamentals may wish to review the CPD 130 course "Residential Appraisal Basics".
This course explores the relationship between time and value in real estate. Any estimated value for a property must be accompanied by an estimate of how long it would need to be on the market in order to sell at that price. Without establishing this link to sale timing, a value conclusion cannot be fully understood.
The Appraisal Institute of Canada's Canadian Uniform Standards of Professional Appraisal Practice (CUSPAP) requires that all market value conclusions must be accompanied by an estimated reasonable exposure time. The standard definition of market value requires reasonable and adequate market exposure. Similarly, sales that lack adequate marketing or time-on-the-market may not achieve full value. A situation that requires shorter-than-typical sales timeframes, such as a forced sale due to foreclosure or a relocation, may require something other than a market value analysis.
The course examines what is involved in justifying and supporting opinions of exposure time, as well as the associated, but distinct, concept of marketing time. The examples and case studies illustrate how these concepts apply in practice, both for market value appraisals and valuation situations where time is unreasonably limited. After reading the course materials, students should have a good understanding of the requirements and processes for estimating time associated with value estimates.
Course Outline
FOREWORD: Introduction To Professional Development Courses
LESSON 1: Time is Money: Market Exposure and Property Value
After completing this lesson, the student should be able to:
- Explain the relationships between time and the concept of "market value".
- Define exposure time and marketing time, and compare and contrast the two concepts.
- Identify and explain the forces within a market that affect marketing periods.
- Identify the various valuation conditions that impact marketing periods and determine what are "reasonable" exposure times and marketing times in a given situation.
- Discuss the requirements for specifying exposure time and marketing time in appraisal reports.
- Determine potential value impacts where an assignment's terms of reference require a value estimate that is not within normal marketing periods.
- Formulate the appropriate reporting and disclosures for a value estimate as above.
- Explain the CUSPAP principles and guidelines for dealing with exposure time.
AFTERWORD
- The Final Examination
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