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Proposed Manufactured Home

PNW RE

Thread Starter
Sophomore Member
Joined
Jul 26, 2018
Professional Status
Certified Residential Appraiser
State
Washington
Looking for some input on a proposed manufactured report. The CA indicates a significantly lower value than the SCA. I have a detailed cost breakdown, including site development costs and solid support for the land value.
It appears to be a result of the current market conditions with a much larger demand than supply of (existing) inventory.

SCA = $420+/- CA = $323+/-

I believe entrepreneurial profit/incentive is the factor in the difference. I've handled this before, however not with such a large variance on new/proposed manufactured homes. I will also add there are similar parcels currently active on the MLS, so theoretically I could purchase a vacant parcel and pay the same/similar cost to have the same MFG home, so the principle of substitution is not much support... Any feedback is much appreciated!
 

PNW RE

Thread Starter
Sophomore Member
Joined
Jul 26, 2018
Professional Status
Certified Residential Appraiser
State
Washington

Dublin ohio

Senior Member
Joined
Mar 20, 2008
Professional Status
Licensed Appraiser
State
Ohio
Something does not sound right. Unless the cost of the actual mfg unit has increased significantly. Is the dealer just gouging the buyer?. What cost service did you use?
 

PNW RE

Thread Starter
Sophomore Member
Joined
Jul 26, 2018
Professional Status
Certified Residential Appraiser
State
Washington
M&S in addition to the contract from the dealer. The CA is lower than the SCA, so the dealer is not gouging the buyer. That's my issue, the SCA indicates a much higher value than the CA, nearly $100k
 

Dublin ohio

Senior Member
Joined
Mar 20, 2008
Professional Status
Licensed Appraiser
State
Ohio
Something is not adding up. Not knowing what the contract from dealer includes makes it difficult to determine problem. Logically, if you have all of the numbers for site work, installation, cost of unit and value if site. There should not be that big of a discrepancy. How is the deal structured. What is dealer including. Is it rural?
 

PNW RE

Thread Starter
Sophomore Member
Joined
Jul 26, 2018
Professional Status
Certified Residential Appraiser
State
Washington
Something is not adding up. Not knowing what the contract from dealer includes makes it difficult to determine problem. Logically, if you have all of the numbers for site work, installation, cost of unit and value if site. There should not be that big of a discrepancy. How is the deal structured. What is dealer including. Is it rural?
I completely agree. Simple deal...borrower owns the land, have the contract for the MFG home and cost breakdown for site work and installation. I have all of the costs, including a very well supported land value. A buyer could purchase a similar parcel and buy the same MFG, assuming site work had similar cost, could generate $100k+/- equity upon installation of the MFG.
 

Dublin ohio

Senior Member
Joined
Mar 20, 2008
Professional Status
Licensed Appraiser
State
Ohio
A buyer could purchase a similar parcel and buy the same MFG, assuming site work had similar cost, could generate $100k+/- equity upon installation of the MFG.
Which is why it does not make sense. Who would anybody buy existing if they could build new for $100K less.
 

PNW RE

Thread Starter
Sophomore Member
Joined
Jul 26, 2018
Professional Status
Certified Residential Appraiser
State
Washington
Which is why it does not make sense. Who would anybody buy existing if they could build new for $100K less.
Hence my post... I'm perplexed. I've always dealt with a variance, however not this much
 

Dublin ohio

Senior Member
Joined
Mar 20, 2008
Professional Status
Licensed Appraiser
State
Ohio
A few things I discovered early on. Is many time. If the buyer acts like general contractor and contracts for things like site work, foundation, installation and depending on where you are. Water and sewer or well and septic. It comes out cheaper than if dealer was providing. You might also be overlooking EI in the cost approach.
 

PNW RE

Thread Starter
Sophomore Member
Joined
Jul 26, 2018
Professional Status
Certified Residential Appraiser
State
Washington
A few things I discovered early on. Is many time. If the buyer acts like general contractor and contracts for things like site work, foundation, installation and depending on where you are. Water and sewer or well and septic. It comes out cheaper than if dealer was providing. You might also be overlooking EI in the cost approach.
Yes, I have been in that situation many times, which is a perfect explanation on the variance, however not the case in this situation. In my opinion, entrepreneurial incentive is the difference between the CA and SCA, however how do you report that in the 1004C (new manufactured housing)?
 
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