Square footage adjustments

[Jeff Horton]

Just looking at some mobile homes comps. The are selling for an average of 28-30 dollars a square foot. I have one that has two additions and I was trying to determine a adjustments for this. Problem is I only have one sale and it's a house that is built around a mobile home. Isn't that a Trouse Bobby?

This brought an old question to mind that I have never settled. If homes are selling for $30 a square foot (minus land) what adjustment do you use in the comp grid for your square footage adjustment? Do you use $30 or a smaller number?

I know that buyers do look at size but I am betting very few figure price per ft and make offers on that. What about similar houses that have 50-100 square foot difference. Will a seller actually recognize that difference?

I know what many will say but I am in small market so that kind of matched pair is difficult if not impossible find. What do you base your square footage adjustments on?

 

[Jo Ann Meyer Stratton]

Built to HUD code after 6/15/1976=manufactured home!!!

Once a manufactured home or mobile home is original built prior to 6/15/1976--always a manufactured home or mobile home.

I usually use a smaller price per square foot in the market adjustment. You are only adjusting for space or air. The price per square foot that was paid (I hate that expression--has absolutely nothing to do with appraising) is considering a lot of other things besides space. Do some paired sales analysis of similar properties to determine the differences in adjusting for space only. And I typically don't adjust if the difference would be less than a $1,000 dollars-which might be 50 to 500 feet in some circumtances!

 

[Jeff Horton]

Thats another problem Jo Ann. I can't find HUD tags on this one. Told the lender and the said go ahead. Also it one Bobby would be proud to appraise. It's not to nice but it sits on a $175,000 main channel water front lot and has a large boathouse with a house boat sitting in it, but thats another story.

 

[Tim The Enchanter]

A smaller number per SF for sure. They're also getting the land, right. Not just the home. I normally don't adjust for differences of less than 50 SF, 100 SF if it's a big house, and not less than $1,000.

My $.02.

 

[Jo Ann Meyer Stratton]

Could you find the data plate inside the home? Mobile homes constructed prior to 1976 also have data plates. Can either a building department or assessment office tell you the original construction? Could it be a modular home originally constructed to a site built building code of some type? And therefore may never have had any identifying labels or tags depending on the state laws where it was constructed. Sounds like the majority of value would be the land anyway. Would a buyer of the property tear it down and start all over because of its location? If it was torn down--what could be built or installed to replace the existing structure? You might have more problems then just "manufactured home" problems!!

 

[Jeff Horton]

I do a lot of Manufactured Homes Jo Ann and I couldn't find a data plate but the owner didn't want me to look either. She kept telling me it was site built. Well I have never seen a metal sided, steel frame site built home. Home has been sided over with vinyl and I am sure that covered the data plates. I asked about interior data palte and she obviously didn't want me looking for it. OK, thats her problem now. But no doubt it is a manufactored home. I can recognize them 2 blocks away.

If it sold its a good chance it would be removed and the additions torn down. The land is worth what they are wanting to borrow. The whole time I was gathering data I kept thinking how much I would like to have that lot. I lived not far from there once and I really like the area. Rural but not remote. On a beautiful cove with excellent access to the main channel. But I am trying to sell my lake front and move to the lower rent district. Decided I want to work for fun and not to make house payments.

 

[Jo Ann Meyer Stratton]

It is beginning to sound like a $20,000 home on a $175,000 lot--won't that make the lender happy!! That will make the loan officer have to work to find a loan program that will invest in a lot, hoping the owners won't tear the improvements down until they build a nicer home that would be good collateral for the loan. Keep on having fun!

 

[Pamela Crowley (Florida)]

Jeff,

My own general rule of thumb is that after I've completed ALL the other adjustments on the grid, I then consider the SF adjustment. If I'm feeling pretty confident on the rest of my adjustments the number that brings the bottom lines as close as possible is what I use as the SF adjustment. I figure this is paired sales analysis on the grid and after a while, it seems to make the most sense. I think the last time we got into this question on the forum, Austin chimed in and agreed that the GLA adjustment is that last item to adjust for according to his regressions.

PS: I would have insisted on looking for the inside label. The serial numbers at least are also in the frames in the crawl space - usually somewhere near whichever end was the 'front'. Somehow, you need to verify what this really is. Are there any county records somewhere that could verify this for you?

 

[Frederick R. Ruffell]

Jeff,
Back on the old forum ther was a long thread an square foot adjustments. There was a neat little formula put forth that I have used to get a handle on an adjustment. Now I know some are going to scream about averageing etc... but I have used it and feel comfortable with it as a starting point when I do not have anything more definite.

Take the post adjusted value (the sq. ft. adjustment not yet made) of the comparable and divide it by the GLA and then take 20% (or 25%) of the result. I then average all three ( or 4 etc) results. This works well for my market provided my comp selection is good.

 

[Judy Whitehead (Florida)]

I find in this market that adjusting approximately 50% of the cost to reproduce in the living area works well for us. This is after many, many paired sales pricing. I had a lender that wanted me to adjust 60% of the cost to reproduce - had no reason why, just wanted me to. I simply told them that they were paying me for my expertise and experience and they needed to use it.

It sounds to me like you almost have a land appraisal with improvements. Although, I will say that our waterfront sales almost always have a significant, if not larger site value than improvement value. The lenders who do business in this area recognize this, but we have to make copius explanations in the addendum. What the lender usually does is use a LTV ratio similar to vacant land/lot sales so I'm told.