Appraisal for Manufactured Home (loan, approval, loan, properties)
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Anyone know how a manufactured home is appraised in NC? The appraisal was started today on my home. The appraiser called my guy at Clayton Homes to get the floorplan of my home. I was initially told that they were appraised solely on square footage of the home. Like a certain dollar amount per square foot. But I've also read online that appraisers use a NADA Manufactured Housing guide to appraise them. Appraisals through the NADA would take into consideration upgrades and such that were added to the home. This appraisal is extremely important because for my USDA loan to be approved it must come in at or higher than what I have requested on my loan. Also, is the appraisal process generally quick?
Appraisals are based on the following info: Age, location, home size, quality of construction, condition, lot size, and features such as porches, fireplaces, pool, garages, ect. Your loan amount will have nothing to do with the appraised value of the property unless the appraiser is dishonest. A typical appraisal will probably take 1-2 days to complete after the initial inspection. NADA information is used by some appraisers for manufactured homes to determine cost of construction. It will have little to do with the actual market value of your property.
I am in a unique situation where my loan approval has everything to do with the appraisal. I am using the USDA loan to do a land/home package for a new manufactured home. The way this works (to the best of my knowledge anyway, it is quite convoluted) is that we submitted to the lender how much money I needed in a loan to purchase the home, land, and do the improvements to the land (well, septic, etc.). I was approved for that amount and the loan has gone through underwriting, etc. This is where the appraisal comes in. The appraiser now has to get the floorplan for the home I plan to purchase, get the tax parcel ID for the property, and appraise all of this. Then this appraisal is compared to the amount of money we asked for initially and if it is at or above this amount we are fine and the loan should be ready. If the appraisal comes in lower than what we asked for in the loan then I must find a way to make up the difference.
You may indeed encounter a problem especially considering your circumstances. I have very often seen the cost for a land/home package exceed it's market value. It's not unusual. An appraisal will be based on the property being complete and what it's worth once the manufactured home is on the site and set up. That value is determined by what others are paying for existing manufactured homes in the area which in this housing market may likely be less than what you are paying for your land/home package. Ultimately, your problem stems from the type of property you are buying. Manufactured homes drop in value significantly the day you purchase them and then they decline in value moderately over their economic life. The land underneath the manufactured home will likely increase in value over time but it rarely outperforms the decline of the structure.
An appraisal will be based on the property being complete and what it's worth once the manufactured home is on the site and set up. That value is determined by what others are paying for existing manufactured homes in the area which in this housing market may likely be less than what you are paying for your land/home package.
That was my main question. Because the guy at Clayton Homes said that he's done several deals like this and had no problems with the appraisals. He says they appraise the homes based solely on square footage and that I should be fine because I am getting a fairly large home square footage wise but for a very cheap price per square foot. My idea of appraisals was how you stated it, that it was based on what the house would sell for in our market once it was set up and everything. If the appraisal is only based on square footage I think I'll be fine but I'm worried it is based on the actual value of that home set-up.
You may indeed encounter a problem especially considering your circumstances. I have very often seen the cost for a land/home package exceed it's market value. It's not unusual. An appraisal will be based on the property being complete and what it's worth once the manufactured home is on the site and set up. That value is determined by what others are paying for existing manufactured homes in the area which in this housing market may likely be less than what you are paying for your land/home package. Ultimately, your problem stems from the type of property you are buying. Manufactured homes drop in value significantly the day you purchase them and then they decline in value moderately over their economic life. The land underneath the manufactured home will likely increase in value over time but it rarely outperforms the decline of the structure.
--" I have very often seen the cost for a land/home package exceed its market value "
Probably just as likely ( or more likely ) with a stick built home also.
I have yet to find a real bargain on a parcel for sale with a newer double wide.
Yes, the newer double wide and lot/land is listed lower than a comparable newer stick built home, but never low enough to account for the difference in original price between the stick built home and the double wide.
That would tell me the manufactured home/land is not depriciating at a faster rate than the comparable stick built/land package.
( just my observation from looking at many properties in the mid-souith for retirement )
--" I have very often seen the cost for a land/home package exceed its market value "
Probably just as likely ( or more likely ) with a stick built home also.
I have yet to find a real bargain on a parcel for sale with a newer double wide.
Yes, the newer double wide and lot/land is listed lower than a comparable newer stick built home, but never low enough to account for the difference in original price between the stick built home and the double wide.
That would tell me the manufactured home/land is not depriciating at a faster rate than the comparable stick built/land package.
( just my observation from looking at many properties in the mid-souith for retirement )
I'm in NC where a typical 1800 sq ft manufactured home retails for around $80,000. Combine that with a typical lot ($25,000) and all the stuff to get it set up ($15,000) and you've quickly spent $120,000.
A typical existing 1800 sq ft manufactured home less than 5 years old will bring about $90,000 in our area. That's a $30,000 decrease in less than 5 years. The same home 20+ years old may get $65,000 on a good day. Trust me, manufactured homes lose value MUCH faster than site built homes. I've appraised a few hundred of them. I've got a pretty good grasp of how they depreciate. But if you doubt me by all means go out and buy one, keep it a few years and resale it and let me know how well that works out for you. The number of manufactured homes I've seen hold or increase in value in my 8 years of appraising is zero.
I'm in NC where a typical 1800 sq ft manufactured home retails for around $80,000. Combine that with a typical lot ($25,000) and all the stuff to get it set up ($15,000) and you've quickly spent $120,000.
A typical existing 1800 sq ft manufactured home less than 5 years old will bring about $90,000 in our area. That's a $30,000 decrease in less than 5 years. The same home 20+ years old may get $65,000 on a good day. Trust me, manufactured homes lose value MUCH faster than site built homes. I've appraised a few hundred of them. I've got a pretty good grasp of how they depreciate. But if you doubt me by all means go out and buy one, keep it a few years and resale it and let me know how well that works out for you. The number of manufactured homes I've seen hold or increase in value in my 8 years of appraising is zero.
Here in Minnesota, that manufactured home price is listed as -- "set on your foundation".
I just looked at a modular home( brand name, had a front porch), and it was listed as--------" $74,800 -------delivered and set up on your foundation "
Comparing the manufactured home of 20 years ago ( and using it for predicting future depreciation ) is misleading cuz the ones built 20 years ago don't come close to the ones built today.
That is like saying cars with 100,000 miles are worn out cuz that used to be true.
Heck, if a car built recently gives me any trouble in the first 200,000 miles, I consider I got a lemon.
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