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Doo Doo Going To Hit The Fan

Discussion in 'General Appraisal Discussion' started by Ray Miller, Sep 14, 2004.

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  1. Ray Miller

    Ray Miller Elite Member

    0
    Feb 20, 2002
    Professional Status:
    Licensed Appraiser
    State:
    Wisconsin
    Did a MFG home and acreage in 2002 came in at $131,000 below what he paid for it by $20,000. Redid the subject in 2003 to cut interest . Came in at $131,000 +/- a tad. Just redid the subject and it came in at $80,000.00.

    Instead of having lots of sales to pick from like in the past (15). I had six to choose from in the last 6 months to a year. All within a year or two of the subjects age, all with in 100 GLA +/- of the subject all with in .50 acres of the the subject land size.

    Market now showing 35 MFG on the current market, with only 6 sold in the past year in the area. I went out 15 miles in each direction. To move out any more would put me into a different maket area. Sales would come up another $15,000 or so higher.

    Went back and check my work on the first two and it looks fine. Redid this one twice recheck the data bases three times with a fine comb. Looking for MFG that might have been sold as stick built or modular.

    I guess as someone said we only report the market, we don't make it.

    Think I will make it a point to be out of the office today.
     
  2. Pa'akai

    Pa'akai Junior Member

    0
    Jan 7, 2004
    Professional Status:
    Certified Residential Appraiser
    State:
    Tennessee
    I do a lot of MH appraisals in SE TN and I have seriously yet to see any increase of values in MHs in this area in the last few years. Actually I'm seeing major decreases in values, especially due to foreclosures. Approx. 50% of all the MH homes listed in MLS are bank owned or in foreclosure and listed $15,000 or more less than what the previous owner bought it for. I will now no longer do MH appraising due to the scenario above. If the values keep going down either the lender or the borrower is going to come after the appraiser even if we did appraise at market value at the time.
     
  3. xm39hnu

    xm39hnu Senior Member

    0
    Jul 10, 2003
    Professional Status:
    General Public
    State:
    Florida
    David,
    They probably won't come after you if you describe the market as you have in your post. You'll have an unhappy borrower, and an unhappy wobbly box salesman, but they're not your clients. Most of my clients won't even lend on MH's so it isn't an issue here.
     
  4. Terrel L. Shields

    Terrel L. Shields Elite Member
    Gold Supporting Member

    141
    May 2, 2002
    Professional Status:
    Certified General Appraiser
    State:
    Arkansas
    Foreclosure and lack of lenders for older MH's are the two reasons that I think dominate the pricing of MH's where I live. They simply depreciate faster than the overall market inflates AND depreciate faster than they get paid off, leaving a borrower "upside down" in the loan. So they walk.
     
  5. Restrain

    Restrain Elite Member

    7
    Jan 22, 2002
    Professional Status:
    Certified General Appraiser
    State:
    Florida
    Can you say "Mortgage Fraud" in conjunction with Mfg. homes?

    New mfg homes are sold as appreciating just like single family homes...well, NO! The appraisals consistently ignore the mfg home market. One appraiser stated that the best comparable for a new mfg home was the sale of a new mfg home, but doesn't discuss the reason that no investors are placing homes and selling them is that the market doesn't support these overinflated values. They will ignore sales of mfg homes in the same development and the 15 foreclosed homes in the same development, and go 20 miles to get a sale that will support the value. They ignore site differentials, secondary mfg homes on the site, large barns, pipe fencing, and other issues, often not even showing them on the report.

    No, mortgage and appraisal fraud is driving the new manufactured home market, pure and simple.
     
  6. Willie

    Willie Senior Member

    0
    May 30, 2002
    Professional Status:
    Certified General Appraiser
    State:
    Tennessee
    This is an excellent example of why not to do MH's. I do them, but will remember this thread. I would hate to explain why my value estimate dropped $50,000 in a years time. Can it do so? Sure. However, this is an attorney's and or a renegade apppraisal commission's lifeblood, especially if there were a minority borrower involved. Dot your i's and cross your t's. as I know you will. Good luck.
     
  7. Austin

    Austin Elite Member

    0
    Jan 16, 2002
    Professional Status:
    Certified General Appraiser
    State:
    Virginia
    I appraised a doublewide yesterday for a commercial bank mortgage. I would never do one for Fannie. All of the following sales are from the MLS, approximately same age, same general lot size, and if you looked at the pictures you would say they all look comparable. Here are the sale prices:

    Code:
    $64,900
    $69,000
    $63,000
    $74,000
    $87,900
    $85,000
    $93,000
    $48,900
    $37,900
    $51,000
    $42,900
    $55,000
    Now all one has to do is cherry pick which sales to come up with the answer one wants. Using three comps I could have appraised the subject for $45,000 or I could have appraised it for $88,000. It was under contract at $63,000.
     
  8. xm39hnu

    xm39hnu Senior Member

    0
    Jul 10, 2003
    Professional Status:
    General Public
    State:
    Florida
    Austin,
    Just for drill, which ones of those sales were the most recent?
    Which ones were most proximate?
    All were similar, you said, but were they all next door? Did all of'em sell yesterday?
     
  9. Otis Key

    Otis Key Elite Member

    0
    May 15, 2004
    Professional Status:
    Certified Residential Appraiser
    State:
    New Mexico
    Ray, as is typical - "You don't make the market - you just report it." That's what I told an LO at a MB and it ended up getting me another appraisal order from that same person for the same owner on another property. One of the few smart and understanding LO's. I also said she might want to consider telling the borrower that the previous appraiser did not do him any favors and he might want to consider filing a complaint with the state.
     
  10. Lysander in Charlotte

    Lysander in Charlotte Member

    0
    Jan 16, 2002
    Professional Status:
    Certified Residential Appraiser
    State:
    North Carolina
    One advntage of being a "city" appraiser is that I seldom have a call for a MH appraisal. I won't do them unless the call comes from someone who sends me 100% of their appraisal orders. In that case, and only in that case will I accept the assignment. Seems that every one I've ever done turns out to be one of those appraisals that just won't go away.
     
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