Mobile Home Park Conversion

[Hoogoo]

I have a client requesting an appraisal assignment on a manufactured home and lot that is being converted from a park where they currently do not own the land. They own the manufactured dwelling currently on the property and are under contract to purchase the land. Per the Client they will de title the property to convert the home to Real Estate. Now I informed them that if they would like to proceed the report would be made Subject-To completion of the detitle of the dwelling if they want a 1004C. They are coming back and saying "This is the purchase of the site from a manufactured park conversion and the report should be made As-Is". Am I wrong in my thought process that the report needs to be made subject-to? If they want an As-Is wouldn't this create potentially 2 assignments with the home being considered personal property? Any input would be appreciated.

 

[Terrel L. Shields]

Per the Client they will de title the property to convert the home to Real Estate.

So what? A MH is a MH. They can call it a McMansion but the title does not make the property anything different. The state may treat it "as is" as "personal property" like a car. But the value is the same as it is if "detitled" to call it "Real Property".

You simply ID the property for what it is. Real property land with a personal property HUD code home or Real property land with a real property HUD code home.

Some states have this nonsensical idea that by decree they make personal property into real property, when in reality, that "personal property" is fixed to the real estate therefore is real estate anyway by the book....just not by the law.

Subject to implies that it is CONTRARY TO WHAT EXISTS. It is not contrary to what exists. A picture of the property before "detitled" and after is the same. If a home is under contract do you make it subject to - "transfer of title" or "closing" or some other thing?

 

[Sadie]

I have a client requesting an appraisal assignment on a manufactured home and lot that is being converted from a park where they currently do not own the land. They own the manufactured dwelling currently on the property and are under contract to purchase the land. Per the Client they will de title the property to convert the home to Real Estate. Now I informed them that if they would like to proceed the report would be made Subject-To completion of the detitle of the dwelling if they want a 1004C. They are coming back and saying "This is the purchase of the site from a manufactured park conversion and the report should be made As-Is". Am I wrong in my thought process that the report needs to be made subject-to? If they want an As-Is wouldn't this create potentially 2 assignments with the home being considered personal property? Any input would be appreciated.

Here ya go: The manufactured home must be a one-unit dwelling that is legally classified as real property and cannot include an accessory dwelling unit. See B2-3-04, Special Property Eligibility Considerations for additional information. FNMA MH guidelines.

 

[George Hatch]

I have a client requesting an appraisal assignment on a manufactured home and lot that is being converted from a park where they currently do not own the land. They own the manufactured dwelling currently on the property and are under contract to purchase the land. Per the Client they will de title the property to convert the home to Real Estate. Now I informed them that if they would like to proceed the report would be made Subject-To completion of the detitle of the dwelling if they want a 1004C. They are coming back and saying "This is the purchase of the site from a manufactured park conversion and the report should be made As-Is". Am I wrong in my thought process that the report needs to be made subject-to? If they want an As-Is wouldn't this create potentially 2 assignments with the home being considered personal property? Any input would be appreciated.

The first two sentences lay out the crux of the valuation part of the question. "currently do not own the land" + "They own the dwelling" means that the "as is" ownership for the two components are different from one another. Inasmuch as the value of the two when combined might be different than the value if sold separately that alone justifies appraising both components separately as well as "subject to assemblage of both property interests". That "subject to" is a hypothetical; that property interest doesn't exist in that form at this time. It's possible that it may never exist in that form if for some reason this sale doesn't go through.

In such situations I never ask for permission. I do what I do, explain it well in the report including my reasoning for what I did, and then if there's a problem they have to ask for the revision in writing so I can attribute the reasoning to the individual demanding it. (That works every time).