New mftr home - no comps

[Arnold-AAS]

When - if EVER - would you consider the cost approach the main indicator of value for a brand new manufactured home? Any and all thoughts and experiences welcome! Thanks.

 

[shrubberyvaluation]

When - if EVER - would you consider the cost approach the main indicator of value for a brand new manufactured home? Any and all thoughts and experiences welcome! Thanks.

When its the most reliable indicator of value.

 

[Arnold-AAS]

When its the most reliable indicator of value.

So, you would not feel the need to support that cost value with comparables in the area? I've just never ONLY used the cost approach. But with a new manufactured home it was the first time it actually made sense.

 

[glenn walker]

When - if EVER - would you consider the cost approach the main indicator of value for a brand new manufactured home? Any and all thoughts and experiences welcome! Thanks.

Yes but it will not fly unless a private or hard money lender- Personally -would bail and tell lender you can
proceed but there will be no sales comparable's - I highly doubt they will want to proceed --Hard Stop do not get into it too deep :

 

[Arnold-AAS]

Yes but it will not fly unless a private or hard money lender- Personally -would bail and tell lender you can
proceed but there will be no sales comparable's - I highly doubt they will want to proceed --Hard Stop do not get into it too deep :

Thanks. I gave them the value I could support, but it was low and it just got me thinking about all of this and wishing I had a colleague to talk to. So, I went hunting for a forum and found this board. I will appreciate having others as a sounding board. Thanks again.

 

[shrubberyvaluation]

So, you would not feel the need to support that cost value with comparables in the area? I've just never ONLY used the cost approach. But with a new manufactured home it was the first time it actually made sense.

What would someone buy instead if they could not buy that home? Would they live on the street?

 

[KYLECODY]

When - if EVER - would you consider the cost approach the main indicator of value for a brand new manufactured home? Any and all thoughts and experiences welcome! Thanks.

Were there any manufactured home sales in the area on similar sized parcels? You can always use just resales and then adjust upwards for the markets preference for new homes.

Its not hard to extract as long as you have some new manufactured homes in the same time period as other resales. You can go as far back in time as you need to to get the percentage difference. Or you can go to similar areas where there is more data to extract a difference. In my area the difference has been roughly 10-15% for new versus resales.

 

[Overimprovement]

Best you may be able to do is compare similar sized MH and site built homes in your market--everything as equal as possible--site size, utils, location, etc.

See what the percentage difference is between them. This gives you a MH/site built adjustment factor.

If there TRULY are no MH sales, you will have to use site built as comps, with the adjustment factor you derived above. It won't be a pretty appraisal, but neither are geodesic and berm homes with no comps either, but someone has to do them. Hopefully you can secure the fee you will earn on this one.

1) Make sure you let client know your direction
2) It is OK to far back in time or far away in distance if needed, to get at least ONE MH sale. It doesn't have to be new, in my market, they do not appreciate hardly at all the first few years--can even be worth more as folks add porches, landscaping, paved driveways, etc, as money permits.

 

[Overimprovement]

PS--you didnt mention the loan type. If F/F, you HAVE to use the SCA. Cannot just use CA, and really are not supposed to give that any weight either.

 

[Terrel L. Shields]

So, you would not feel the need to support that cost value with comparables in the area?

why would you not have comps too? But very commonly new construction is best valued by the CA. Costs are 'market data' just like sales and income.

But if I have 3 sales - say they are 10 years old, I will reverse engineer (cost) the MHs to estimate their effective ages and adjust. The adjustments might be fairly high but I can adjust back to zero...in effect. Sensitivity analysis can be applied to age as well as square footage. Sure you cannot bracket "new" and you are not going to find "new" MH resales and "new" in a MH usually means the cost plus set up and mileage as well as site improvements.

But again, at that moment in time (zero) unless there is an external obsolescence the "new" value at time zero should be the cost.