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Modular Home Appraisal

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Carla Harris

Freshman Member
Joined
May 12, 2003
I am wanting to build a modular home and before I came to this decision I did alot of research on them and most everything I read said they were comparable to stick built homes and you got more for your moneys worth. Well I had an appraisal done for my new 1568 sq foot house with a full basement including ice block foundation which makes the insulation value of the basement at R-32 and the appraisal came back at about $10,000 less than what it is going to cost to build. Is this normal for a modular or is the appraiser not doing things correctly? I searched and searched for the best modular home company and this is the best one by far. I have been totally impressed with the looks of their homes and you could never tell that they were modular in any way. I know so many homes you can tell they were rolled in on a truck and I didn't want that at all. Can someone please help on what to do. Thank you.
 

Robert Pennington

Freshman Member
Joined
Oct 24, 2002
Professional Status
Certified General Appraiser
State
Colorado
Carla,

There are a large number of factors that could influence the value of your property.

The first item to remember is that cost does not necessarily equal value, such as the basement insulation, which would not pay you back dollar for dollar in my market.

I have also seen modular homes that cost more than similar or comparable conventional site built homes do.

You should also look for excessive costs from the dealor or contracor. It has been my experiance that many buyers of these homes are some of the less informed purchasers in the market and get taken advantage of. I would encourage you to double check the construction cost estimates from those involved.

You are also correct that the appraiser could be incorrect. Your appraiser could also be responsible for saving you $10,000.

The saying is "IT DEPENDS"
 

Restrain

Elite Member
Joined
Jan 22, 2002
Professional Status
Certified General Appraiser
State
Florida
I agree with the others.

Market value is not Cost. You are looking at Cost, not Value. If modular homes are common in the area, I would ask for names of buyers, then call them and ask them if they've tried to sell, or take their addresses to a local realtor and ask them to see if there's been any sales activity on those homes. You might find expired or withdrawn listings that would indicate that Cost is more than Value.

I see this quite often on Manufactured homes. Modulars are a different product but there might still be a market resistance vs. a stick-built home.

Just remember, the builder is hyping his product and trying to get you to buy.

Roger
 

Mountain Man

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
Georgia
The post above covered the appraisal questions well. But if you still have some concerns, you can get another appraiser to do a review of the previous report, or do a whole new appraisal.
 

wyecoyote

Senior Member
Joined
Jan 15, 2002
Professional Status
Gvmt Agency, FNMA, HUD, VA etc.
State
Washington
Carla,

The above posts are pretty much right on. I have done both manufactured and modular in my area and have yet to see one where the costs to build was less than the resale price (market value).

Robert is also correct in double checking the cost estimates. I saw one recently where the general contractor was double billing for utility hookups and other items almost $15K worth of double billing.

Ryan
 

Mike Garrett RAA

Elite Member
Gold Supporting Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
The manufactured home market has the highest foreclosure rate of all housing. Could be those foreclosure sales are driving the market downward in your area. Investigate what is happening in your market. A good way to do this is to call a real estate agent and tell him/her you are interested in buying a foreclosure...watch what happens!
 
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