Days on market for the comparables averaged 18, while the subject has been listed 140 days without an offer. This suggests:
Correct Answer
A) The subject may be priced above what its market will support
Why this is correct: A subject listed 140 days versus comparables averaging 18 days on market suggests the subject's price may exceed market acceptance, indicating possible overpricing. Why the other choices are wrong: The comparables were all sold under duress by their owners is unsupported; typical DOM doesn't indicate duress. The subject is superior to every one of the comparables used is contradicted by longer marketing time. Marketing time has no bearing on the value conclusion at all is false; exposure time is market data. Exam tip: Extended marketing time can indicate value issues; consider it in reconciliation.
Why This Is the Correct Answer
The subject may be priced above what its market will support is the reasonable inference and is properly hedged, since the appraiser is drawing a conclusion from listing behavior rather than proving a cause. The right handling is to investigate rather than to stop at the inference: review the listing history for price reductions and their timing, look at the listing photographs and description for condition or presentation problems, check whether the property was actually exposed on the multiple listing service or offered privately, and consider whether an external factor such as an adjacent use is deterring buyers. The report should treat the subject's listing history as market data, discuss it in reconciliation, and make clear that an unsuccessful asking price is not a value indication.
Why the Other Options Are Wrong
Option B: The comparables were all sold under duress by their owners
Duress in the comparables would show up as atypical motivation discovered during verification, and short marketing times in a healthy market indicate demand rather than distress. Quick sales at market prices are the ordinary pattern in an active segment. Inferring duress from speed reverses the usual meaning of the data.
Option C: The subject is superior to every one of the comparables used
Superiority would tend to attract buyers and shorten marketing time at a correctly set price, so a hundred and forty days without an offer is evidence against the proposition rather than for it. A superior property offered above what even its superiority supports still sits. The option mistakes the asking price for a statement about quality that the market has accepted.
Option D: Marketing time has no bearing on the value conclusion at all
Marketing and exposure time are squarely relevant, and the appraiser is expected to develop an opinion of exposure time in connection with a market value conclusion and to analyze the subject's own listing and sale history where required by the standards. Ignoring the subject's listing behavior would discard directly relevant market evidence. This option dismisses data the analysis specifically calls for.
The Market Already Voted
Comparables at eighteen days and a subject at a hundred and forty is a poll with one dissenter, and the dissenter is the price. When everything similar sells quickly and this one does not, the market has already told you what it thinks.
How to use: Compare the subject's marketing time against the comparables before reconciling, and treat a large gap as evidence to investigate. Look at price reduction history, presentation, actual exposure, and external influences. Discuss listing behavior in reconciliation and use it to support the exposure time opinion, never as a value indication in itself.
Exam Tip
Extended marketing time against fast comparables points at price. Analyze the subject's listing history; it is required data, not background.
Common Mistakes to Avoid
- -Treating an unsold asking price as support for a value conclusion
- -Failing to analyze the subject's listing and price reduction history as required market data
- -Confusing the exposure time opinion with the actual days the subject has been listed
Concept Deep Dive
Analysis
This item tests reading market feedback about the subject itself. Days on market is market data, and a listing that has been exposed far longer than comparable properties without producing an offer is the market speaking about the relationship between the asking price and what buyers will pay. Comparables averaging eighteen days establish that this segment is transacting briskly, so the subject's hundred and forty days cannot be explained by a slow market. The candidate explanations narrow quickly to price, to a property characteristic buyers are rejecting, such as condition, functional problems, or an external influence, or to an ineffective marketing effort, and price is the most common and the one the data most directly implicates. This matters to the appraiser in two ways. It is evidence to weigh in reconciliation, since an asking price the market has declined is at best weak support for a value conclusion, and it informs the exposure time opinion, which describes how long the property would have needed to be exposed to sell at the concluded value.
Background Knowledge
You need to know that the subject's listing history is market data and that the standards require analysis of the subject's current agreement of sale, option, or listing, and of prior sales within specified periods, when such information is available. You should know the definition and role of exposure time, an opinion of the length of time the property would have been exposed prior to a hypothetical sale at the concluded value on the effective date. You also need to know that an asking price is not a value indication and that listing data is weighed differently from closed sales.
Real-World Application
The subject has been listed a hundred and forty days at an unchanged price while five similar homes nearby sold in two to four weeks. The appraiser reviews the listing history, finds no reductions and photographs showing dated finishes, concludes the asking price exceeds market support, and says so in reconciliation. Her value opinion comes in below the list price, and her exposure time opinion reflects the two-to-four-week pattern of the sales rather than the subject's unsuccessful listing.
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