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The fit finally hit the Shan!

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Mike Garrett RAA

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Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
Youse guys have been saying your MH market is in the toliet....well, finally found a couple here that are ready for potty training.


Sold new two years ago for $210,000....market says.....$160,000

Purchased modular unit for $200,000 plus 35 acres three years ago for a total of $235,000. Needs $260,000 for refi. Appraised for $225,000.

New HUD modular, never moved into. Spotless on 2.5 acres. Appraised for $15,000 less than sale that closed Nov 2001.

New modular in upper end 5 acre tract area. Stick builts are going for $250,000 to $350,000. Appraised for $25,000 less than sale two years ago.

And the beat goes on........
 

Jo Ann Meyer Stratton

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Arizona
Mike: If built to HUD code---it IS NOT A MODULAR!!!!!!

It has to be be built to a site built code like CABO, UBC, BOCA, or something for it to be a modular.

But yes, you have just experienced what the rest of the country has been seeing for several years. Sounds like you had some predatory dealers and lenders in your area in the past. And appraisers in the past that were using land/home packages that had not been exposed to the market as comparables to meet those expectations of those predatory dealers/lenders. Now all that is starting to come home to roost.

Now repeat after me, ten times, homes constructed in the factory to the HUD building code are manufactured homes, they are not modulars no matter what the dealer, manufacturer, home owner, lender, local government, etc, etc, etc says.
 

Ted Martin

Senior Member
Joined
Jan 17, 2002
Professional Status
Certified General Appraiser
State
Kansas
I have a very hard time finding comps for these things (Mfgs./HUD code). The problem is that the MLS data is tained because 9 of 10 are REO's or preforeclosures where the sellers are motivated. In my area the buyers are what I call site buyers, they found the place where they want to live and bought the only box they could afford to live in. If they can make the payments they will never sell because they love the site. If they need more room they add on, etc. etc. etc.. They don't move up so there are no untained sales. I hate appraising these things because I try to be fair and am really curious what they are worth, bbuutttttt? I'm never sure that I'm not bias in my value to the low side because of the limited number of unmotivated sales. Granted there is downward pressure on the property type because of the high number of foreclosed or REO sales but is it really as low as the forced sales would indicate or should I use the 1 in 10 non forced sales for the refi appraisals rather than the more previlant REO sales? Bias low is as bad as bias high.
 

Mike Garrett RAA

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Jan 14, 2002
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State
Colorado
Sorry JoAnne, I can't not say that!!! :wink: :wink: :wink:

Don't know if it is a state wide thing but we have a manufactured home division at the state level and they say..... HUD modular. It is not considered a mobile home even though it arrives on the site on wheels. The public record (assessor's card) also says HUD Modular even though it had a VIN number until such time as it was placed on the site, then it was purged and given a real property ID #.

Our MLS does the same thing....HUD Modular....not HUD manufactured; therefore, I will not tilt at windmills just to be politically correct. I personally don't care what they call it so long as I use comps that are similarily classified.

The whole world could be wrong.....but I doubt it.
 

Mike Garrett RAA

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Jan 14, 2002
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Certified Residential Appraiser
State
Colorado
I forgot to mention, I will be in the market for one of these "MODULAR/Manufactured Homes" in a few years. Most likely in Oklahoma (Grand Lake) or Missouri (Table Rock) or Arkansas (on some lake). Has to have a boat house and dock, view of the lake..and tires on the roof so it doesn't blow away in the tornado!
 

Restrain

Elite Member
Joined
Jan 22, 2002
Professional Status
Certified General Appraiser
State
Florida
Mike - contact the REO department for Palm Harbor, et al. They should have one with your name on it. Seriously, in this market, foreclosues ARE the market. You virtually cannot sell one through a real estate broker because the fees and commission are such that the seller has to bring cash to closing. These things are like cars - they depreciate sharply when rolled off the lot.

If you are seriously looking for one in northern Arkansas, I would suggest you start looking now and stay away from the Branson area. It'll take you a while to find what you're looking for.

Roger
 

Jo Ann Meyer Stratton

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Arizona
Mike G:
I am not being politically correct when I refer to a home built to the HUD building code as a manufactured home. I am talking in terms that are in line with Fannie Mae, Freddie Mac, FHA, VA financing and has the same meaning nationwide. All those guidelines refer to a home built to HUD building code as manufactured housing. That term identifies that specific building code for mortgage purposes with those four entities. Using a different term than manufactured for a home built to HUD code is providing false information for financing purposes.

Zoning codes, local and state governments use many different terms to describe the same things. For example in Arizona, the state laws regulating the construction of homes to the HUD building codes keeps referring to FBBs. The state laws regarding the assessment and taxation of manufactured homes, mobile homes and park models uses the term mobile home regardless of original building code or lack of building code. Some zoning regulations in some areas only allow trailers that have been built in the past ten years to be located in certain sections (trailers for permanent residences haven't been built in almost 30 years). Very few zoning codes even mention modular homes. Assessment and taxation laws and procedures don't even specify modular homes. For those purposes, if it was not built to HUD code or ANSI or was a mobile home before 6/15/76--then it is assessed, taxed, ownership records etc it is considered a site built home. Even if it was 100% constructed in a factory and hauled to the site on a low boy. So local and state terminology can vary greatly.

But for financing purposes with any of the four lenders named above--there is one definition nationwide, regardless of local terms and that is if constructed to the HUD code it is a manufactured homes. If built in a factory to a different building code, it is a modular home. And for financing purposes the twain should never meet.

It is similar to the discussion of the terms "condo" and "townhome". Condo is a term that indicates home ownership rights and townhome indicates an architectural design and has no bearing on ownership rights. Although in specific locations, everybody will use the term townhome interchangeably with condo when discussing condos.

So your zoning might be HUD modular and when gathering information from sellers, buyers, realtors, city, county, state offices you might verbally use the term HUD modular, but you would indicate on your URAR yes for manufactured only for a home constructed in the factory to HUD building code. And your description of the home itself in your report would refer to the home itself as a manufactured home because of the HUD building code. If the home was constructed 100% in the factory to a different building code, the term for financing purposes would be modular, making it very clear in your report which building code was followed at the time of original construction and that it was not the HUD building code.

The very first thing my first mentor in appraising ever said, was to always remember that I was describing southeastern NM in my report to somebody that had never been west of the Hudson River--so local terms are meaningless to that reader in NYC. Terms that have the same meaning nation wide should be used and extensive explanation if a local term was absolutely necessary.

And that is why I am such a nag about using the correct terms so that reader in NYC that has never been west of the Hudson River will know that when the term manufactured home is used, a home constructed to the HUD building code is being discussed.
 

Jo Ann Meyer Stratton

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Arizona
Ted:
The market is in a constant change which means the value of a property changes as the surrounding market changes. So if everything available for sale or that has sold are REOs then that is what the value of a non-REO is at that specific time. Later if fewer and fewer REOs are affecting the market, then the non reos will be the indication of value. So the value of a specific property can be like a roller coaster ride, today worthless, tomorrow valuable, next week worthless again, and that is the way it continues. And because of all the predatory lending and wheeling and dealing that has gone on in recent years with manufactured housing--the worthless value might be long lasting! I always check everything, solds, actives, withdrawns, cancels, pendings, etc. Sometimes that off the market info can be more valuable that what has sold. So if everything that has sold recently and didn't sell after a reasonable length of time, then the value could be low and I don't think that is a low bias.
 

Mike Garrett RAA

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Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
I always check the box.....manufactured home. In 1968 I was associated with Ingersol Republic Corporation as sales manager for their land development company. We built the first modular home factory in Colorado. The primary model as stick built in a factory on a railroad flat car. It moved thru the factory in four days. Construction was 2 x 6 and looked exactly like stick built except it was built from the inside out. The basic unit was in three sections, two outside pieces and one center piece. Sizes varied by length...widths were standard.

One was placed in the 1970 parade of homes in Colorado Springs. It was placed over a full basement and won a "best in show" award. Several were air lifted by a large chopper (sky crane) into the Breckenridge Ski community. All are still in place. These were referred to as "modular homes" by everyone because there were several modules that were assembled on the site.

The VA in this region has requested that we refer to "factory built" as either HUD Modular, CABO Modular or UBC Modular on the URAR. In more than 23 years of appraising these beasts I have never had one single appraisal kicked back for failing to properly identify the unit.

FHA came to Colorado Springs and held a full day seminar on Appraising Manufactured Housing. They said the same thing. We had the State Manufactured Housing Commission people come in and speak to our local appraiser's group last year. They also said the same thing. This is where my information has come from.
 

Terrel L. Shields

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Joined
May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
HUD Modular....not HUD manufactured

All our Realtors call double wides "Modular"...annoys the heck out of me.


Most likely in Oklahoma (Grand Lake) or Missouri (Table Rock) or Arkansas (on some lake).
Some lake ought to be north shore of Beaver....then you are only 60 min. from Grand OR Table Rock, plus trout fishing below the dam on Beaver or winter bass fishing at Flint Creek Powerplant Lake. You have to snag spoonbills below Grand...which reminds me....

My dad used to camp overnight below Lake Martin in E. CO. Once the carp were running and you could catch 'em by the truck load literally. They gave all of them to some guy who filled his pickup bed with all it could hold. Said with a evil grin that his father in law told him just to bring all the carp he wanted to...he would clean 'em and can 'em like Salmon. He was going to let the tailgate down, run backwards and slam on the brakes hard....slide them out in Paw N Law's lawn, then drive off like mad!!! I helped fillet 60 hybrid stripers and white bass once and it took about 2 hours. I bet that guy took all night after he tracked down and killed his son-in-law.
 
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