First Year Value Change of Patriot Homes

[Bill Beebe]

I am considering purchasing an Arlington Falls home manufactured by Patriot Homes. My wife and I like the floor plan and the home we want to order is stretched 4 feet and has several upgrades including 5-12 roof pitch, 30 year shingles, 2X6 side walls on 16" centers, 2X8 floor joists on 16" centers, 2X4 interior walls, hardwood floors in the Kitchen and Dining Room, two French Doors, upgraded carpet and cabinets, etc. We plan to sit it on our own property, a 61 acre forested tract. The bank we are working with is interested in financing this project, but they want to know the value of the home after the first year (how much it is likely to depreciate). We plan to sit the home on a full slab foundation.

Can anyone tell me if this home will retain its value after one year or if it is likely to depreciate (or appreciate) and if so by how much?

Thanks,
Bill Beebe

[rmurray]

If you mean selling the home independent of the land...then the loss will be large...moving and resetting a home like this can cost thousands...maybe more than 10 thousand...Answer would be at least 25% to 35%...

BUT...this would be a MUCH better return than a locally built stick home constructed on the property and then sold with in 12 months to be moved away...You would be lucky if your losses were less than 75%...

Now if they mean how much will the 60 acres and home be worth in 12 months...???...check out the novelty store for a crystal ball...even a professional appraiser would have a hard time answering this question...He/she can comment on the trends in the area...but never promise a value in the future...Ask your bank what the interest rates will be in 12 months...if he knew for sure..he would be rich by then..

I have never heard that kind of question from a mortgage banker...maybe you need to shop around more for your money..

Sounds like you are going to have a nice home place..

[Bill Beebe]

Thanks for the information. I did not expect that question either, and really do not understand their concern except that this home is about $20,000.00+ more than the normal manufactured homes they are used to financing. Maybe that has them concerned, however stickbuilt homes in this area costing more than $70,000.00 are not moving for several years. We hope to have a great place when we are finished.

[dave]

I had one of my customers ask me the same question this saturday.He has great credit and naturally went to His own bank to see what kind of finanacing He could get on a manufactured home.His banker made the statement that did he know he would loose 20% or more of the homes value as soon as the home left the dealers lot.
My answer to him was as follows.Yes it is true that your home becomes a titled "used" home once you put the home on your land and finance the home with a chattel,"home-only" loan.However to determine what if any impact this will have on your decision to purchase a manufactured home we need to look at the advantages that attracted you to want to purchase a manufactured home in the first place.

#1 Are you purchasing this home as an investment or since this is going on family land is this a situation where you will never sell the land.
#2 Are you interested in purchasing a manufactured home because you can specify a home that exceeds entry level site-built home standards and can get 2X the sq. footage for less money.

His answer was that no He would never sell his land and that overall cost vs. what he could get for that cost was a very important factor.He also added that he intended to finance His new home for 15 years or less for the same payment he would have had on a site built home built to the same specifications and financed for 30yrs and this would have required that He mortgage His land.

Just consider a final point.If you can get the same or better quality at half the price,aren't you taking a considerable "appreciation" up front.

[Mary]

We are in the process of buying a Patriot Home from the Crystal Valley series. The appraisal process is taking FOREVER...or at least it seems like forever. We are putting our on 35 acres of land that has an old double wide (late 70s) on it. When we did the refinancing a few years ago, the property refinanced for $98,000. The home we are putting on it lists for $89,000...we are buying a lot model and are getting a great deal on it. The mortgage will be for $132,000 total...this would seem to be a "no brainer" but we are hoping to have an answer this week finally. We are preapproved...all we need is for the appraiser to say the house and land are worth that amount of money.

Our Patriot Home is 32 x 60, has a 5/12 roof pitch, finished drywall throughout, upgraded cabinets throughout and HardiPlank siding...can't wait to move in!

...Mary

[Scott]

Are you cutting out a portion of the land or trying to get the whole 35 acres put in with the home. Appraisors will generally only appraise a maximum of 10 acres with the house. The problem with the appraisal could be that there are no comparables out there that will justify the dollar amounts you are talking about. I of course say this without knowing which part of the country you live in so I could be way off base but in my part of the country, there is no way that you would get a house and 10 acres to appraise at the amount you are requesting.

[Scott]

Are you cutting out a portion of the land or trying to get the whole 35 acres put in with the home. Appraisors will generally only appraise a maximum of 10 acres with the

[Mary]

I understand that they will only appraise 10 acres + the house. But there are approximately three "buildable" lots in the 35 acres, and we are taking out the new mortgage on the entire piece of property. So the entire parcel is considered as part of the appraisal. My complaint is not whether or not it will appraise that high--every one assures us it will--its with the amount of time its taken.

[Scott]

The amount of time it has taken may be due to the difficulty in finding comps. Normally, an appraisal shouldn't take more than just a few days if the appraisors don't have a huge back log. As to every one assuring you that it will appraise that high, of course they are going to tell you that. They are trying to sell you a house.
As far as the 10 acres go, it may be difficult for an appraisor to find a comp for a 10 acre tract that has a 35 acre payoff.

[Don]

Ground set the home, secure it on a foundation, not just a slab. In Arizona, ground set homes are the same as real estate, site built homes. The down side is that your property taxes will be higher.