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Carol

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Registered: 02/18/08
Posts: 757
Reply with quote  #1 
Need some opinions. Appraising a manufactured home with 0.51 acres. MH is a 1968 built, THIS IS A CASH ONLY deal, buyers have funds to pay in cash. Doing appraisal to make sure value is there. Anyway, I found 1 comp with a 1972 MH on a .16 lot. No other comps like that within 5 miles (rural area). Think land is worth more than MH although it is in good condition for its age. Since I don't have to follow bank rules, but do want a credible appraisal. would you A) do a land appraisal and add value for the MH (the buyers do plan to live in it) or B) do a manufactured home appraisal and make age adjustments for the other comps that are much newer. Thank you,
scott

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Reply with quote  #2 
With the facts you presented, I would choose A.  You have one sale where you should be able to address the contributory value of the MH.  Typical buyer would estimate the land,  and then estimate contributory value of old MH.  I would also give credit for other improvements (well, ST, etc.). 
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papaJsqueeze

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Registered: 04/11/13
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Reply with quote  #3 
Do a land appraisal with no value on 1968 MH.

Prior to 1976 all Manufactured homes were TRAILERS.  You cannot value a TRAILER, you can only value a MANUFACTURED HOME.  It is personal property, always will be as it isn't built to HUD building codes and isn't designed for anything but being a travel trailer.

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Randy

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Reply with quote  #4 
Papa is correct Carol you do not have a manufactured home, you have a mobile home/trailer.
Carol

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Reply with quote  #5 
Okay, I do know it is personal property, since prior to 1976, BUT it is in average condition and has been maintained. I was pretty surprised when I went inside. It does still have the trailer hitch on the front and has a "pop out" as the owner stated, but the borrowers are going to live in it. Its migrant farm land out there and they find the trailer to be find to live in. Since it is just a CASH deal and lender won't have  say, don't you think the trailer should add some contributory value to the sale? Thank you, Carol
DenverAppraiser

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Registered: 12/16/12
Posts: 185
Reply with quote  #6 
Land appr.
trailor is personal prop. adds 0 to land.
Trailor may deduct from value since it needs to be removed, axles installed, plates etc.
papaJsqueeze

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Registered: 04/11/13
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Reply with quote  #7 
No. You are not competent to value personal property. Also you cannot simply add the value of personal property to the value of real property and come up with a total value of the real property.
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Carol

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Reply with quote  #8 
But Denver: it isn't being removed the people buying it are living in it. Seriously not trying to beat a dead horse here, but.....
DenverAppraiser

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Posts: 185
Reply with quote  #9 
its not about them, its about the market and valuing the property AS IS. bank or no bank.
papaJsqueeze

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Reply with quote  #10 
Carol. Think of it this way.

If you park a rolls Royce in your driveway does it affect the market value of the real property? No. It can't. Think of the bundle of rights associated with real property. The county would have to condemn that trailer if it were real property as it doesn't meet any building codes.

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johnmbryant

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Registered: 02/17/08
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Reply with quote  #11 
Carol has been asked to appraise the land and the Rolls Royce.  She has a comparable parcel with a similar Rolls Royce.  She has similar parcels without the Rolls Royce.  It should easy to evaluate the land and the Rolls Royce provided she is competent to appraise this type of personal property.

The Rolls Royce built before 1976 will take a huge hit relative to one built after 1976 since no bank will finance it and a cash deal is the only method of completing the transaction.

We are too hung up on bank rules, FNMA rules, FHA rules, and AMC rules to look at appraisal rules.  The USPAP has two standards (7 and 8) addressing appraisal of personal property.  There is nothing wrong with appraising a trailer built before 1976.  The USPAP has no prohibition against appraising old trailers.
Carol

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Reply with quote  #12 
Thank you John. with the one comp I do have with a 1971 trailer, I can make an adjustment for its contributory value to the land in my opinion.
Phil

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Reply with quote  #13 
This is an interesting post to me because I am dealing with a very similar property. MF home is  Grandfathered in a high end neighborhood and built in 1981...MF has little contributory value and the lot is undersized for the neighborhood...

MEP
scott

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Reply with quote  #14 
Quote:
Originally Posted by johnmbryant
Carol has been asked to appraise the land and the Rolls Royce.  She has a comparable parcel with a similar Rolls Royce.  She has similar parcels without the Rolls Royce.  It should easy to evaluate the land and the Rolls Royce provided she is competent to appraise this type of personal property.

The Rolls Royce built before 1976 will take a huge hit relative to one built after 1976 since no bank will finance it and a cash deal is the only method of completing the transaction.

We are too hung up on bank rules, FNMA rules, FHA rules, and AMC rules to look at appraisal rules.  The USPAP has two standards (7 and 8) addressing appraisal of personal property.  There is nothing wrong with appraising a trailer built before 1976.  The USPAP has no prohibition against appraising old trailers.


Thank you.  Couldn't have said it better myself.  BTW, there are some banks that will finance this.  I did one a few years ago that had a late 60's mobile home (with concrete foundation) financed by a local bank. They probably finance Rolls Royces, too. 

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papaJsqueeze

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Reply with quote  #15 
You can't combine real and personal and state " my opinion of market value for the real property that is the subject of this report is blah blah blah. And you can value the two separately and simply add them together either. You cannot call it a home as it is not a home it is a trailer.

What is hbu?

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johnmbryant

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Reply with quote  #16 
If a mobile home is permanently attached to the land, it is real property.  The fact that it is not a "manufactured home" as defined by HUD does not make it any less real property if it is permanently attached to the land.

During graduate school around 1977, I kept books for a mobile home dealer.  We permanently installed many mobile homes on permanent foundations.

Check me out on this but I believe you will find that HUD and most lenders will not lend on mobile homes that are not HUD approved manufactured homes.  I do not believe you find anywhere that they are not or cannot be part of the real estate.

Even if you believe a mobile home is personal property (which it may be depending on the manner in which it is affixed to the land), USPAP is clear that personal property may be included in an appraisal.

Quote:
USPAP, page U-17, lines 510, 514-515 states:

An appraiser must . . . identify the characteristics of the property that are relevant to the type and definition of value and intended use of the appraisal,

(iii) any personal property, trade fixtures, or intangible items that are not real property but are included in the appraisal;

Also see FAQ 188 on page F-85.  It is too long to quote here.
Lamar

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Registered: 02/19/08
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Reply with quote  #17 
 
General Program Information

What is a manufactured home?

A manufactured home (formerly known as a mobile home) is built to the Manufactured Home Construction and Safety Standards (HUD Code) and displays a red certification label on the exterior of each transportable section. Manufactured homes are built in the controlled environment of a manufacturing plant and are transported in one or more sections on a permanent chassis.

What is the difference between manufactured and modular homes?Manufactured homes are constructed according to a code administered by the U.S. Department of Housing and Urban Development (HUD Code). The HUD Code, unlike conventional building codes, requires manufactured homes to be constructed on a permanent chassis. Modular homes are constructed to the same state, local or regional building codes as site-built homes. Other types of systems-built homes include panelized wall systems, log homes, structural insulated panels, and insulating concrete forms.

What are my options for financing the purchase of a manufactured home?There are many alternatives for financing your home, including a growing number of lending institutions that are providing conventional and government-insured financing plans for prospective owners. The most common method of financing a manufactured home is through a retail installment contract, available through your retailer. Some lending institutions that offer conventional, long-term real estate mortgages may require the homes to be placed on approved foundations. Manufactured homes are eligible for government-insured loans offered by the Federal Housing Administration (FHA), the Veterans Administration (VA), and the Rural Housing Services (RHS) under the U.S. Department of Agriculture.

For additional assistance, you may wish to contact HUD's Housing Counseling Clearinghouse. HUD-approved housing counseling agencies provide housing counseling to renters, first-time buyers, and homeowners. Homeowners with problems that could result in default of their mortgage or foreclosure on their property need to contact a HUD-approved housing counseling agency immediately. HUD's Housing Counseling Clearinghouse operates a toll-free 24-hour-a-day automated voice response system that provides referrals to local housing counseling agencies, at (800) 569-4287. Referrals are also available to Spanish-speaking consumers.
Whom do I contact if my home was damaged during installation?

Retailers may contract with their customers for the installation of their homes, in which case the retailer is your first contact for installation-related problems. If the retailer does not arrange for the installation and you choose the installation contractor, you should contact the installer who performed the work. If you are not satisfied with the repair, contact the local authority/SAA having jurisdiction. It is important that all services related to the installation be listed separately in the contract.
What should I do if I'm having problems with my home and the Retailer and/or Manufacturer are no longer in business?

Contact your SAA or State agency that regulates manufactured home manufacturers or retailers. Your State may administer a bonding or recovery fund program for such instances.

My home was built before June 15, 1976. I've made some modifications to my home and believe it meets the HUD Standards. Can someone come inspect my home to make sure it's in compliance with the Standards?

HUD does not inspect homes. Homes built prior to June 15, 1976, even with modifications, do not meet the HUD standards and cannot be accepted as compliant with the HUD Code. As the homeowner, you may find a licensed engineer willing to inspect your home for compliance with your state's housing code. FHA does not insure mortgages on manufactured homes built prior to June 15, 1976. Most other mortgage insurance firms follow FHA's policy.


Will HUD issue certification labels (HUD tags) if my home was built before 1976?

No. The Department will not issue tags for a manufactured (mobile) home constructed prior to the enforcement of the Manufactured Home Construction and Safety Standards, effective June 15, 1976.

What kind of financing is available for my manufactured home?

HUD's FHA program insures two types of mortgages. Title II insures mortgages on qualifying manufactured homes sold with land and meeting other requirements. FHA's Title I program can provide information to consumers interested in obtaining HUD-insured loans. You may also want to contact lending institutions in your area (or the area where you want to purchase your home) for additional financing options.

What if HUD does not consider my home to meet its requirements for Title I or Title II insured loans? Are there still financing options available to me?

You may wish to consult with private lending institutions such as Freddie Mac or Fannie Mae to see if financial assistance is available to you.

I'm interested in purchasing a mobile home park or building a mobile home park. Where can I go for assistance?

You may contact the Office of Multifamily Housing at 202-708-2495 for assistance. Section 207, which is an FHA mortgage insurance program for HUD-approved lenders, promotes the creation of manufactured home communities by increasing the availability of affordable financing and mortgages.

I live in a mobile home park and I'm having problems with my landlord. Can HUD help me?

HUD does not regulate manufactured (mobile) home parks; however, most states have an association (http://www.mobilehomeparkstore.com/
mhp_associations.htm)
that can assist manufactured (mobile) homeowners with problems they are encountering.

I have a park model home and have made upgrades to my home. I was told I need a HUD label. How do I get one?

Regardless of the upgrades made to your park model, it is not possible to obtain a HUD label on any structure that was not produced and inspected as a manufactured home in accordance with HUD's Manufactured Home Construction and Safety Standards and Regulations during its original construction. You may contact the Recreational Park Trailer Industry Association (http://www.rptia.com) for additional information and resources regarding park model homes.

 

Below is another person explaning why no typical moragage can be obtain on home that old.

 

Mobile home lending standards
 
 

Dear Steve,
Friends of mine are trying to buy the lot where their mobile home is located. Lenders are saying that's not possible because the home was built before 1976. If it was built after 1976, or if there was no mobile home there at all, then there would be no problem, they are told. Why is the year such a problem?
-- Tammy

 
 
 

Dear Tammy,
Safety is an issue on those pre-1976 models, which were built to significantly lower standards than those built from mid-1976 on. That's when the U.S. Department of Housing and Urban Development, or HUD, mandated more strict construction procedures for mobile homes, which are now more commonly referred to as "manufactured homes."

Pre-1976 mobile homes had less insulation in walls, ceilings and floors, uninsulated air ducts, and no vapor barriers in their roof cavities, making them fire hazards. Most include windows that are too small for the average-size person to escape from and wood paneling situated too close to the furnace. Moreover, others have aluminum wiring, which can cause sparking inside the walls. Not good!

Hence, the Federal Housing Administration, or FHA, which provides mortgage insurance on loans made by most U.S. lenders, won't insure mortgages on mobile homes built before June 15, 1976, or on property that will contain such a unit. That's why your friends can't get a loan. Other mortgage insurers, by the way, typically follow FHA's lead.

Be a good friend and tell your pals they are living in a fire trap. As much as they'd like to avoid the hassle of relocating or replacing their mobile home, advise them to please move up to a newer model, for their safety's sake and for better energy efficiency. There is a hitch, however. In many jurisdictions, pre-1976 units may not be relocated or resold, so your friends may get little or nothing in trade other than scrap value. And as far as I can tell, it's next to impossible to have a pre-1976 model retrofitted to qualify for an FHA loan.

If your friends do buy another unit, they will need to familiarize themselves with local manufactured-housing laws and set-back restrictions, because they will no longer be grandfathered in at their location. A local manufactured-home dealer can answer most of their questions.

Carol

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Registered: 02/18/08
Posts: 757
Reply with quote  #18 
Everyone but John and Scott keep mentionining FHA and lender, etc., but like I said this is a cash deal.
DanPicou

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Registered: 02/18/08
Posts: 1,005
Reply with quote  #19 
Carol, the value of the real estate and the trailer, is the value of the land plus the estimated value of the trailer by a local dealership. plus the cost of locating and set up of the unit.  Add the the two together and you have the value for a cash deal.  Most of the value should be in the land with a 1968 living unit, which is pretty much near the end of its economic life.  Good luck my dear.
papaJsqueeze

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Registered: 04/11/13
Posts: 716
Reply with quote  #20 
Wrong.  The market value of the real property cannot be simply the addition of the value of the land plus the estimated value of the trailer by a dealership.

If I park a rolls Royce on my yard, the value of my yard doesn't increase by the amount of the personal property value of the rolls.  That would be like adding the purchase price of a personal property home to the value of a lot and saying that the sum is the market value.  You cannot do that.

You wouldn't do that with a 2010 model doublewide and you cannot do that with a 1968 travel trailer.

You have to consider the fixture test before you can consider it a fixture.  Is a 1968 model travel trailer ever considered as a fixture.  No, therefore it can't be a fixture and cannot contribute to the value of the real property.  If you consider it as a fixture, it is substandard housing and would not be legal and the county would make you remove it.  This is why the county doesn't have it listed as real property.  To classify this as real property would be akin to classifying a boat or a school bus as real property.

USPAP states that you must be competent in valuing personal property.  I doubt Carol is.  Furthermore, personal property such as trade fixtures are not generally the same as a 1968 trailer on a half acre lot.  Unless your trade (business appraisal) is for the market value of a trailer park.

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Carol

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Registered: 02/18/08
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Reply with quote  #21 
Thanks Dan. I do have a comp with a 1971 trailer. For sure the land is worth more. I can do paired sales to see what contributory value the trailer lends to the land.
papaJsqueeze

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Posts: 716
Reply with quote  #22 
Be careful Carol,  The contributory value of the trailer may be considered a concession to the sale rather than a contribution to the market value of the land.
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DenverAppraiser

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Registered: 12/16/12
Posts: 185
Reply with quote  #23 
Just keep this in mind
Dont think because YOUR report is not for financing that it doesnt need to comply w/USPAP and
laws in your state. Your report will need to be USPAP compliant if you are licensed.
Me I would pass on this one, comps or no comps.
I rather do a AMC cookie cutter with a sea of comps and get chump change than have sleepless nights
over a wobly box.
The FAQs above are very enlightening, learn something new every day.
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