Proper sales for manufactured homes

[Jo Ann Meyer Stratton]

Tim: Frankly, what bothers me is that you and I and some other appraisers see it so clearly and the rest of the world thinks we are nuts. But when an appraiser comes across situations like I was grrrring about several weeks ago on an almost daily basis in a very small area--it gets frustrating to think that other "appraisal professionals???" can't see the same thing. The situation I was upset about was a situation where an appraiser from 200 miles away used site built homes superior to other site built homes as comparables, one manufactured home that was also superior, reporting erroneous information on that manufactured home--and now the owner is stuck with a $108,000 mortgage on a $60,000 property. That owner will never be able to sell their property or refinance because there isn't any equity there. Appreciation would have to double in our area and it isn't even increasing 1% per year for site built homes. So another foreclosure in the making.

 

[Mike Garrett RAA]

And I thought I was the only one who is nuts!

 

[Richard Carlsen]

I just finished a one-day class last Thursday taught by Rich Heyn for the Appraisal Institute on Appraising Manufactured Housing. We had over 70 in the class. One of the surprising things about the makeup of the class was the number of new appraisers attending. We could see some of the frustration of some of these people trying to understand the difference between the two kinds of factory built houses and how to tell a manufactured house in the field. Some just seemed to want to give up and not do them at all. That, of course is not realistic. All you have to do is stand on an overpass on I-75 about 100 miles south of the Straits of Mackinac and watch the HUD Codes heading north to know that manufactured housing will be an even bigger part of our real estate market in the future.

Classes like this, with competent instructors, help to take the mystery out of manufactured housing and protect us from making some very large mistakes. Even though I appraised about 60 HUD and pre-HUD code manufactured houses last year alone, there were things for me to learn and information that has helped me tweak my reports so they are more accurate and acceptable to my clients.

My hat is off to people like Rich who teach these classes so we can all learn and like Jo Ann who give of their time to do things like moderating this Manufactured Housing forum.

Now if we can just get people to take advantage of these learning experiences..........

 

[Rich Heyn]

Richard:

Thanks for the kind words. I really enjoy seminar development and teaching, but it's all the more gratifying to when I get that kind of feedback from an experienced hand like yourself.

Relative to getting other appraisers to take advantage of these learning experiences, I'll offer the following:

Appraisers should DEMAND quality CE. Don't patronize providers who offer anything less.

Schedule your CE with interesting, quality offerings in mind. If you wait until the end of your cycle and take anything available at the time, what do you expect?

Don't sign up for CE on the basis of price. What's the point of saving $20 or $30 and not learning anything? What is a day of your time worth?

And finally, for those interested, the next offering of the MH seminar will be June 27th in Macinaw City. The on-line version will be available through the Appraisal Institute in a few months.

Rich Heyn

 

[Terrel L. Shields]

I see virtually no depreciation when the buyer buys their own land and home on their own terms

I tend to agree with that. I appraised a 10 ac. parcel with new MH on it for $99K about 4 years ago. The owners then built a detached metal shed type garage afterwards. I had included a well, septic, and large entry deck. The cost of the unit was just over 65K.

They sold this last year for $111K, so it did not collapse in value but land and building contribution probably meant the MH did very little depreciating or appreciating. That 1st year collapse in value, in my mind, rests with the premium price people are giving who don't have good credit, and the slick upgrades sales by MH sales persons. There can be 10% or more difference in the price according to whether you are a cash buyer or a subprime borrower.

People with poor credit often end up with worse credit.