Quality adjustments on manufactured homes

[Doug Wegener]

quality adjustments

I can see a difference in high vs. average. I can't see a difference between 2 classes that are very similar, say fair vs. avg., avg. vs. good, etc. Once the classes used for comparsion jump a few classes then you can see a difference if using 1 comp from avg and 1 comp from high.

I was taught the only adjustments that get put into the grid for sales comparison are those coming from the market. If I can't get enough info from the market don't make the adjustment and just talk about it in the addendum.

I don't know manufactured homes very well. However I have moved to an area that has a lot more manufactured homes then where I previosuly was. So I am interested in this discussion as I am sure I will get an order for one soon.

If you have the data to derive your quality adjustments from the market thats fine and dandy. Wth a lot of work you may be able to derive adjustments for deluxe vs economy manufactured homes , but maybe not specific makes and models.

Using the book values is a reasonable method of doing it. Ive done it that way for years. Never had one underwriter question it. They never question it when you dont either. How many understand really understand manufactured homes?

And you may find after all the other adjustments are made that the comp that spreads the highest is the better quality manufactured home. Even if an adjustment is not made the quality of the subject vs. the comparables, it can be a factor in where you place your concluded value.

 

[CANative]

In California the ratio between land value and MH improvement value is so vast that the relatively small difference in book pricing between makes and models vanishes in the noise factor created by how MH's are sold from dealer lots where the same make and model may sell at large differences between retailers and can also change from day to day at the same dealer, the fact that real estate markets, buyers, sellers and real estate agents are never perfect, the lack of fine tuneable MLS data for comp sale characteristics, the fact sales of MH's are fewer and ****her between than sales of conventional properties, the idea that MH's usually represent basic shelter requirements versus status symbol statements and dreams of living there into one's retirement years, etc., etc.

Because there are always so few sales of manufactured homes in any given period of time, it may be necessary to use recent sales of manufactured home properties where there is an obvious difference between the quality of the subject and one or more of the comp sales. If the subject and the comp sales all have older coaches, then the market reaction to original quality would probably be zero. They just need a cheap place to live in. But if you've got new homes or homes that are new enough to compete with new homes, i don't think it would be credible to make some sort of reasonably supportable adjustment, even if you have to work an extra couple of hours on the report. My area never has matched pairs to work with but I've seen enough MH sales where all else is similar enough and a bump in price could only be explained as market reaction to quality. You can use cost services to help support feeble market data.

Be careful about NADA. The yellow page charts are a sliding scale based on age and in turn the older the house gets the higher the page number. The higher the page number the lower the quality. Yet in reality, the original quality has not changed... just the yellow page chart number.

 

[Vegan702]

Well I spoke too soon as I got an order for FHA MH on 3 acres. Good thing I know the area very well as it is were I grew up. About 70% of the 500 or so homes there are MH's with the rest being stick built. In fact our house was one of the very first stick built homes there back in 1975. Going to tackle this one end of the week.