[Chris Mohammed]

I need your help. I have a manufactured home on an acre of land in Peculiar Missouri (a suburb of Kansas City) that I am selling. To make a long story short, the loan underwriters did not accept the appraisal. The appraiser could not find any comps in the general area of my home. I am not sure if he used stick home for comps or what he used. My understanding (and this is second hand information) is that the appraiser only looked for comps in MLS , had trouble with recent comps and or distance issues and didn't know where else to look or just gave up. What advice can I pass through the realtor to the appraiser that will help resolve my issue?

[CANative]

I'm not sure if you're an appraiser or not. I'll go on the assumption that you are not. I will also assume that your property fits the specific term of Manufactured Home (built to the HUD Code, in a factory, on a permanent steel chassis after June 15, 1976)

If the loan on the property is going to be secured by a manufactured home and that loan is to eventually go to the secondary market (such as fannie mae or freddie mac) the appraiser must use at least 2 sales of manufactured homes in the sales analysis. If the appraiser cannot find appropriate sales of manufactured homes the loan would not be eligible for delivery to fannie (freddie says if appraiser cannot find appropriate sales of manufactured homes it must be prominantly stated in the report... don't know what this means in terms of acceptance.) Most lenders will not proceed if the sale is not eligible to be "resold."

Apparently, the appraiser could not find at least 2 sales of manufactured homes similar to yours. Keep in mind, that an appraiser cannot use land/home sales, that is, where the land and the house sold separately as opposed to be offered on the market as one unit, as comparable sales.

Not being experienced in your market area, I cannot offer any advice to you (except you may ask the Realtor if she or any of her associates knows of any market sales of MH's in your area that did not go through MLS - sometimes they have what are know as "pocket listings" which they keep for themselves.)

[Tim Hicks (Texas)]

Chris, there could be any number of reasons for the problem. First and foremost, the appraiser can not use land/home package sales because they were not offered on the open market for the public to set the price instead of the dealer and developer. Land/home packages are not considered "open market sales" which is a criteria for suitable comparable sales.

You say you have a RE agent involved. The agent should have access to all MLS sales for manufactured homes. These sales reflect proper market exposure and allows the public to set the pricing by market appeal coupled with supply and demand. The agent should have all the data that the appraiser has and possibly data the appraiser might have missed. The first question that comes into my mind is, "How did the Real Estate agent arrive at a list price for your home?" They most likely performed a CMA on your home to arrive at an asking price. The sales they used for their CMA should tell the story.

Once again, we are not in your market, so we can't really make comments specifically about your market. Keep in mind that the appraiser is supposed to be an unbiased party to the transaction and their job is to arrive at an opinion of value based on the proper criteria required by the lenders.

My next question is not intended to inflame. Are there no sales or just no sales high enough to support the projected sales price?

Some areas of the country (like mine) have been over run with over inflated land/manufactured home sales. The land/home developers created their own market by selling homes and land for much more than they were worth. They did this by duping mortgage companies and consumers and all they needed was appraisers to play along and give them the values they wanted. As a result, we have 1,000's over manufactured home/land owners that owe more than their properties are worth. The foreclosure market now dominates the manufactured home market because consumers are walking away from their homes with ruined credit. This affects consumers that are not walking away from their homes, too. They can not sell their homes for their actual value now, because there are too many foreclosure properties selling for half of what they are worth and 1/3 of what they sold for originally.

Hopefully, that is not the problem in your state. I know this could be way too much information for your situation. I hope and pray your situation is not similar to our manufactured home market.

[Restrain]

You may have to do some "creative financing" to sell this property. Multiple loans, such as an 80/10/10, with you carrying some of the financing. These things are hard to sell and hard to finance.