cost

[debbie]

We are in the process of buying our manufactured home, it is a schult model numberB6455-33. Our loan has been approved by our lender and we have chosen all our upgrades. We did not negotiate the price and I am wondering are the prices negotiable or are they fixed, and also how do I find out how much profit the dealer is making, so we know how much room their is for negotiation. Is there a way to find out the invoice price like you can with cars????

[Randy Eaton]

Hello Debbie,

The invoice is so hard to determine but a good rule of thumb is take the selling price of the Mfg. home not including sales tax and divide it by 145% that should be close to invoice. Then you need to add for delivery a double wide is usually $2,000 to $2,500 a triple-wide is usually $3,000 to $3,500 and then you need to add for set-up costs. Normally set-up cost for a double wide is $4,500 -$5,000, set-up costs for a triple-wide is $6,500 to $7,500. Example a doublewide selling for $60,000 with your options not including sales tax divided by 145% gives you an invoice of $41,379 dollars. Now add $2,000 for delivery and another $5,000 for set-up. The total invoice amount will be $48,379 that’s what the retailer ends up paying after home is set-up, total profit of $11,621 dollars. The salesperson still needs to be paid and that's usually 20 to 25% of profit in this case the salesperson would make around $2,500 dollars. The retailer ends up with a profit of $9,121.00 Now that's assuming the mark up is only 125% of invoice. In this example the mark-up is close to 125% which I believe is a fair mark-up. Most retailers operate between 125% mark up but many retailers will start out at 135% mark-up and I feel this is too high. The best way to determine this is by shopping other retailers that carry the same brand of home and compare prices. By keeping the retailers honest you should only end up spending 125% mark-up of total invoice and not get taken for a ride by spending 130% mark-up or more. Hope this helps.
Randy Eaton

[Sharon]

Debbie and Randy-Just to bring up another thought. Not sure where you are located, but we are in northern Wisconsin. We are a small retailer and have to pay minimum of $3,000 for freight as we are quite a distance from our manufacturer. Sometimes it is more, depending on where the home is sited. We frequently have to hire a front end loader to move the home on site because of our many trees. That would add to the delivery costs. Set-up costs vary according to the type of home, i.e. does it have finished drywall or just a vinyl covered sheetrock wall? Is the dealer paying for hookups like water, septic,electric, gas, or is the purchaser paying for these items? My advice is to ask your dealer EXACTLY what is included in his price? I know dealers who charge separate fees on top of quoted prices. This is very important for the buyer to know up front. It is not so important for the buyer to know invoice as it is to know exactly what you are getting. And yes, talk to several retailers before you sign a contract. Also, ask for references of customers who purchased from your retailer so you can contact them to see what their experience was and how they like their home. Do your homework. One more thing-in Wisconsin, if the home is becoming a part of real estate, a use tax is included in the price.(which makes it harder to figure invoice amount) If you are placing the home in a leased community, a sales tax is added to the purchase price. Sales and use tax is figured on 65%total price.Hope this helps you Debbie.