Home/Land Resale

[Leslie]

I'd like to hear from anybody who has sold a manufactured home on its own land (not in a park on rented land). Did you have a problem selling it? Did you get the price you wanted? Did the house appreciate? How long was the house on the market? Did the buyer have any problem getting a mortgage on a used m.f.?

Thanks.

[David Oxhandler]

The modern manufactured home is resold with land in exactly the same way any stick built home. You can engage the services of a realestate agent or try to sell it yourself. If you want to go it alone try placing an ad in the local newspaper classifieds. You can also try the MANUFACTURED HOMES FOR SALE BY OWNER web site at www.mfdhousing.com/classified/fsbo/
webmaster

[Leslie]

Thanks for your reply, but I'd still like to hear from some people who have actually done this. I keep hearing conflicting opinions and I don't want to get into financing something I may not be able to sell later on.

Thanks again.

[Gayle Linke]

Hi.

We have not been on the selling end of this type of transaction, but we have been on the buying end.

Last year we bought a doublewide as a weekend place in a gated lake community in north Texas. See www.aboutnoconahills.org for more info. There were several MHs to choose from. We ended up buying a 1988 High Chapparal Tiffany 28X50 on about 1/3 acre. All the units we looked at included the lot(s). Most of the homes we looked at were price similarly.

Why did we choose the one we did? Condition! Most of the homes we looked at were waaaaaaaay behind on their maintenance. One had soft floors in the kitchen, maybe from a sink overflowing. One needed a new roof. Some needed to be completely recarpeted. Several need to have a big box built around them and then have everything in the box torn out and replaced! The one we chose needed to have the carpet cleaned and needs a coat of paint and new skirting - no big deal. Some of the other homes are still for sale a year later.

I have no idea what the home/land cost new, but we paid about $40K for the complete package. We financed the land and home as one bundle and had no problems getting financing.

If you are interested in the area, let me know. I can put you in touch with the realtor we used.

Hopes this helps.

[Charles K. Clarkson (TX)]

    I expect to sell 2 land/home packages in April. I'll likely hold the paper, I prefer to. I am considered a retailer by Texas laws. To date all my homes are in parks or on my own land.

    Like automobiles, mobile homes depreciate in value. The demand in your area may increase your land's value, but improvements on land (dettached and attached) depreciate in value. Also, many people listen to banks and dealers when deciding how to finance their homes. These homes tend to depreciate faster than the loan balance.

    Before you purchase, ask around the area for an approved and licensed mobile home repair contractor. Ask this person to inspect the home you're buying after you have seen their liscence. I pay a local contractor $150 to inspect homes I buy. I am starting to do it with the sellers present. The price drops when they realize how much maintenance has been deferred.

    Ask the owners if they will carry the note. This can cut out all the red-tape from HUD and FHA - both of whom, wrongfully, frown on mobile homes. Do not rely on HUD or FHA inspectors for home condition. HUD wouldn't know a good home if you parked it on their front lawn.

Charles K. Clarkson
Clarkson Energy Homes
254 968-8328

[David Oxhandler]

.
Charles -

I have been buying and selling manufactured homes and land for over 20 years in rural Florida and have found that it is NOT TRUE that manufactured homes automatically depreciate in value or that they depreciate the value of the real-estate.

The value of any structure, site built or installed is based on 2 factors
Location (location location)
Condition

I have remarketed manufactured homes that were over 20 years old for more than they brought on the same land when new. These were located in prime residential areas where all the homes were well maintained and the deed restrictions prevented all the neighbors from neglecting the appearance of their homesteads.

On the other hand I have resold homes that were just a few years old in neighborhoods that were in constant decline, where some of the neighbors homes looked more like junk yards than homesteads. In those cases there was a nasty loss of value to the almost new manufactured home.

[Charles K. Clarkson (TX)]

David,

    I never meant to imply that mobile homes depreciate the value of land. Your experience with mobile homes is far greater then mine. I have been reselling mobile homes for less than a year. I don't even have my license yet. However, I believe you will find that in the majority of cases where a home on land increased in value over a period of time, the land value grew faster than the hiome depreciated in value.

    The maintenance records would help illustrate this. When upkeeping a house (any house) you spend far more money fighting entropy than you do on the land. The expense is in both time and money. Today's building materials last longer and require less maintenance, but entropy and use erodes the value of most improvements to land.

    While exceptions do exist, most neighborhoods have a price range. Hit the maximum price range for an area and you will likely find the selling price of the home will not go up much more, regardless of the home placed there. When a home sells for less in a run down neighborhood, it is likely you've passed the price cap for that area. There just isn't a demand for that nice a home in that part of town.

    Look back at those homes you sold for more money after 20 years.
Did vacant, cleared land go up in value in the same area?
Has the population (and the demand for land) in the area increased?
Did you factor out inflation?
Was this a typical price in this neighborhood? or the high end?
Has the neighborhood changed significantly?

    R. H. Grenier once said, "All generalizations are bad." The initial cost plus the time, effort, and money spent to maintain an improvement properly _generally_ exceeds the resale value of the improvement.
This is the reverse of land, where generally the maintenance cost is low and the value tends to increase over time. There are exceptions, but time and use erode the value of improvements on land.

[David Oxhandler]

There are a lot of popular myths about manufactured housing that just aint so....

You say that "money spent to maintain an improvement properly _generally_ exceeds the resale value of the improvement." This is simply not so. If it was there would be no builders in business anyplace. Why would anyone speculate on building a home or any building for resale if their cost of improving the raw land would exceeds the resale value of the improvement?

HUD CODE MANUFACTURED HOMES HAVE APPRECIATED, in terms of REAL dollar buying power. Visit a retailer, out there on Main Street, that is offering pre-owned homes. We are now talking about just the home no land. Look for a used manufactured home built even twenty years ago, in the early 80s. I use these as an example because the HUD code was initiated in 1979 so the early 80's homes are the oldest HUD code manufactured homes available.

Here, in rural Florida, the typical 14x70 single wide in the early 80's was retailed for around $8000.00. That same home is typically reselling today for around $14,000. The typical small double-wide, (24x44) that we retailed brand new in the early 80s for $12,000 delivered and set is today selling for $20,000 or more

You need to burn that book your quoting.