Help, manufactured home - with addition - going to court

[lafferty]

I have a client that has requested I do two appraisals of a manufactured home for court. One with an as is value; the other as if the addition was never added.
I plan to use manufactured home comps according to size, without even attempting to find homes with additions. That would be impossible.
My problem is with marketability. I know HUD will not accept it without an inspection by the "State Administrative agency". I don't think such an outfit exists in Tennessee. So, all prospective FHA buyers are out. In my area, that may be an automatic elimination of 25-50% of the potential buyers.
What about conventional? Will FNMA accept this thing? If not, we may have no potential buyers. No pool of buyers = no value to me. The typical buyer of a property like this cannot just go to a bank and get an "in house" bank mortgage.
How do you quantify this potential lack of marketability and communicate this to a jury? No one wants to hear appraiserspeak or get a lesson in economics.
Any help is appreciated.
Dave

 

[Pamela Crowley (Florida)]

Need more information.

1) What year is the manufactured home?

2) Is it a single wide or double wide?

There is very limited mortgage money for manufactured homes right now. I can attempt to answer some of your questions after I have the answer to these 2. One thing is for sure, unless the condition is so bad that it's ready to be torn down and hauled to a dump, there are buyers out there for this so, the limited marketability is only due to limited financing possibilities.

 

[David S. Roberson]

Lafferty,

Tell us more about this structure; was it a double-wide or a single wide? What kind of addition are you talking about? What is the quality of the addition? Is it similar to the original trailer?

 

[lafferty]

I have not seen it yet - going Wed. It is an 1152 SF doublewide built in 1980. From what I'm told the addition is not poor quality. I imagine it is built correctly. I will know more after I see it.

 

[Nancy in Friday Harbor]

Dave,

A quick "google" search through using the words "Manufactured Home Tennessee" came up with several links for code enforcement -- all appear to be through the Dept. of Commerce and Insurance. You can go to the state web site at www.state.tn.us or you can do your own google.

For court, a couple of phones calls to the proper authorities is sure a lot safer than guesstimating!!

Good Luck,

Nancy

 

[Caterina Platt]

Dave,

Could your 'State Administrative Authority' be the same that inspects new installations? In my area, the inspector certifies that the property was installed per state requirements. Would they be able to certify that the addition meets the same, and/or does not comprimise the initial installation of the DW?

My market also adds value to these additions if they are done properly. A structural engineer's inspection could tell you whether the addition weakened the structural integrity of the original home. In my MLS system, our manufactured classification has a field for 'Style' with the option of 'Add-on'. This makes it helpful in those searches for similar. If this doesn't exist in yours, you may be stuck with reading remarks, but it is important to show that the market recognizes this addition whether it be as a positive or negative. In my area, if the additions are good quality and don't affect the flow of the original floor plan, these often sell at the upper end of the value range for MH's.

I just completed an appraisal for a 1993 SW with a good quality build on. The appraisal was a hair puller with the underwriter. 7 comps and bukoo addendums and explainations. In the end, the UW did sign off. Pamela is right, there are limited investors for these properties out there right now and this may limit your potential buyers to those with solid credit/employment. I think the one I did was purchased by Flagstar, whom I'm told is one of the few conventional lenders currently doing SW's.

Since yours is a double, your property may have a better selection of lenders. Just a few thoughts that may or may not help, but you may not be dealing with such a oddball after all.

 

[lafferty]

Here goes - the addtition is crap. Unfinished inside, flashing on the roof improper so water can get under the shingles - no J mold on the top of the vinyl siding, so water can get behind it - it is nailed to the side of the house and you can see outside from inside.
The house is filled with about six dogs. Needs new floor coverings. The dogs on the outside ate the duct work, so the HVAC system does not work. Oh yeah, they keep a pig in the new room.
It's not the worst I've seen, believe it or not, but it is a good runner up.

I'm going to call the codes dept. tomorrow and see if there was ever a permit issued for the addition. If not, my problems may be over. It does not meet codes, so I might just have a non-permitted addition that they could demand be removed.

Thanks all, keep those cards and suggestions coming.
Dave

 

[Tim The Enchanter]

:lol: :lol: :lol: :lol: :lol:

Sounds like a winner :!:

My only suggestion, "No permit, no value". And for sure a cost to cure, and put it right. (Habitable?) :lol:

Are pigs allowed where this property is located :?: :?: :lol:

PLUS Six dogs in 1152 SF. :lol:

People do the darndest things don't they :?: :lol:

 

[Caterina Platt]

Geeez,

Ok, previous comments were all assuming this 'addition' was done in a workmanlike manner. Why, pray tell, is this thing going to court? Are the neighbors suing??? :lol:

 

[lafferty]

The reason for the court case - the "contractor" gave the folks a mortgage for the "improvements." He is now wanting to forclose. A court has stoped the foreclosure. The appraisals are to determine the value before and after the additon. My client's theory is that the holder of the mortgage is only entitled to any value his addition added to the property because the terms of the mortgage were less than on the up and up.
To update you all, there are no codes in the county. I'm trying to contact the state to see if they have any jourisdiction. I think not because there was no electrical permit issued. This is quite a mess.
The neighbors are not suing. It does not look bad from the street. (insert a little rebel flag emoticon here)
I did forget to mention that the electric fence holding back two horses was touching the house. No back steps - just horse pasture. The foundation had about 6" of water. But, we have had 6" of rain in the past week it seems. Sun is out today YEAH!!