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Pre HUD Home As Comp For HUD Home?

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Joshua Fookes

Junior Member
Joined
Jan 15, 2003
Professional Status
Certified General Appraiser
State
California
Hey all, got another MANUFACTURED HOME appraisal this last week. It's a refi of an older 1978 manufactured home. Here's the question, would you ever use a sale of a MOBILE HOME built pre HUD, 1976, as a comp? The reason I ask is that financing for the pre HUD mobiles is much harder to come by these days right? Could that change the way it is comparable to the MANUFACTURED HOME?

Thinking out loud

Joshua Fookes
 
Joined
Jan 13, 2002
Professional Status
Retired Appraiser
State
Florida
I would not use a pre HUD code mobile home as a comp for a HUD code. Jo Ann will answer here in a moment. Pay attention to her!
 

Jo Ann Meyer Stratton

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Arizona
The famous answer--It all depends!! If you have lots of HUD code manufactured homes that have sold, active, pending, etc--then use the HUD code homes for a HUD code subject. If you are in an area like I am, where there are only 20 residential sales in the entire county in one year (site built, mobile home and manufactured home), then you have use whatever is available! I do make adjustments for the pre-HUD mobile homes when I am comparing it to a HUD code manufactured home. Not only the financing, but the pre-HUD typically has flat roof, metal siding versus the pitched roof, hardboard siding of the HUD (not always though). So look at the homes very carefully, talk to the agents or owners, get all the information you possibly can--and then provide lots of explanation in your report. Another point to consider since you are dealing with a 1978--there really might not be that much different between your 1978 and the pre-HUD home. The pre-HUD voluntary industry code just before the HUD code went into effect wasn't that much different, and manufacturers starting building to HUD code before it went into effect--they just couldn't get a HUD inspector until June 15, 1976 to say it was built to HUD code. So there are homes that went out the door on June 14, 1976 that are exact duplicates of the ones that went out the door on June 16, 1976-but the older ones are "mobile homes" and the newer ones "manufactured homes".
 

Joshua Fookes

Junior Member
Joined
Jan 15, 2003
Professional Status
Certified General Appraiser
State
California
OK I follow all that, but I have a question?

What if the typical homebuyer has no idea about HUD and 1976 vs. 1978. A 3Bed/2Bath with alum siding pre HUD, is the same as a 3Bed/2Bath with alum siding after HUD to them if condition and style, etc are the same. The pre HUD homes compete with Post HUD homes in the same market and sell for similar prices, so in that regaurds wouldn't they be comparable, but just harder to finance?

Example, I'm looking at two comps: #1 Pre HUD, sold $119,000 #2 Post HUD, sold $110,000, #1 has detached 2Car Gar, but homes are similar in design, size, style, age, etc. They are comparable to each other and to my subject. Would conditions like that merit using them in a report. To me they do indicate what my subject would sell for. They are similar to the buyers out there, it's only when they try to finance the thing that they find out about all this other rigamaroo. If they were buying with cash they could care less about HUD, etc.

What's your two cents, I really do treasure them

Josh
 

Jo Ann Meyer Stratton

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Arizona
Yes--that was why my answer was "it depends". You do have to analyze your market--what would be your market reactions to the homes? The financing difficulties haven't hit home yet with a lot of buyers--so it might take a while before the market starts to react to the difficulties of financing. Also a lot of buyers don't understand the differences between mobile homes and manufactured homes and modular homes, so that has to be analyzed for that specific area. Appraising manufactured homes is just like appraising site built homes--what is the market reaction in that specific location to that specific situation. Typically, for manufactured homes, the appraiser just has to work harder to find sales, verify those sales and listings, retrieve as much info as possible from buyers, sellers, agents, neighbors, etc and then analyze all that data before making choices of comparables and adjustments. They are not cookie cutters like a tract subdivision where the appraiser finds three sales of model matches! So the final answer is--it depends!!
 
Joined
Jan 13, 2002
Professional Status
Retired Appraiser
State
Florida
Hmmm, yes, the local market perceptions do make a difference and need to be taken into consideration.

I'll add here the difference between a 'well informed or well advised' purchaser and a purchaser that has no clue YET that financing a pre HUD code mobile home is going to be next to impossible. Once a buyer becomes well informed about that issue, the values change. Definition of market value. Those that are well informed avoid the pre HUD code houses, at least around here they do.

Unless there really are no other HUD code MH sales, I won't mix.
 
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