So-called "depreciation" and financing

[Rosemary]

I'm in the market for another house and undecided about which way to go - site built or manufactured. I just came back from a day with a real estate agent who gave me the old line about not buying a manufactured home because they depreciate as soon as they're moved to your lot, just like buying a car, you-won't-ever-be-able to get your money out of it when you want to sell, blah, blah, blah. The funny thing is - one of the houses she showed me was an old - built in 1983 - mobile home on a permanent foundation sitting on a 1/2 acre of land. It was very unattractive - small, cramped rooms, tiny kitchen and bathrooms - dark wood paneling, etc.. I would guess that the house did not cost more than $15000 brand new (maybe Randy Eaton could give us an accurate guess, but I don't know who the manufacturer of this doublewide was) - yet the asking price for this house was $76,000 and it was ALREADY UNDER CONTRACT! (We just looked at it "in case the contract doesn't go through.") I mean this house was AWFUL - it was nowhere NEAR the standards of today's manufactured homes, yet - presumably the seller was getting close to $76000 for it. So how can anybody tell me that these houses depreciate? I just don't BELIEVE it!

On another note - the real estate agent said that it's getting harder and harder to find financing for "used" mobile homes, that Conseco has pulled out, for instance, and that if I DID buy a mobile home it might be impossible to sell it down the road if potential buyers could not get financing. This IS a concern of mine since I foresee possibly moving to another area in 10 or 12 years and I don't want to be stuck. Is this just scare tactics?

Randy, do you - or anybody else out there - have any comments about that?

[Dan O'Flaherty]

For years the real estate business and the manufactured housing business were at odds. Now because more and more of our homes are being placed on private land, that is changing.
The pure fact of the matter is that most real estate salespersons don't know a thing about manufactured housing. Most often when they sell MHs. they sell a home in a land lease community where the real estate the home sets on is not part of the deal.
The reason many real estate agents say that MH homes lose value is because that is what they were told when they became agents. So when these agents list homes that are manufactured they tell the seller his/her home alwasys loses value. Being told that the seller then, on the advise of the real estate agent, lists at a lower price. Noe agents who, dealing with a buyer say "lets look at the mobile home, we can offer less because they don't hold their value." With professional agents telling both sides of the sale, the buyer and seller, the home is not worth what is was before, is it any wonder that prices don't hold.
The misinformation is spread enought so it becomes fact.
To make this probem worse many town assessors, who are now dealing with manufactured housing for the first time, are either former realitors or rely on information generated by the real estate industry ( comps) to set assessments.
So now town assessors reinforce the mistaken opinion that our homes, just because the are manufactured, don't hold value.
It's a situation that has to be corrected or the manufactured housing industry will face real problems in having a future. That will cause a bad result for not only an important industry but also all thoes good families that have invested in Manufactured homes over the years.

[rmurray]

I think your observations are directly on target...The agent has lost all credibility when they showed you that 20 year old resale...Then they made fools of themselves with the discussion of manufactured home financing..

First...Conseco is NOT out of business..They still are the largest home only lender in the business..Opps..no facts straight..

Some high rate home only lenders have gone out of business because of all the new finance opportunities that consumers have...Untill only a few years ago the only viable finance was home only mortgages..At high interest rate in comparison to home mortgages..Now virtually all mortgage companies in the country..finance manufactured homes on the SAME programs as any stick built home..Every finance plan available to you in stick built is available in manufactured..Of course quality buyers have flocked to the new mortgages..leaving the high rate home only lenders with a very small portion of the market..The competition is changing the manufactured home finance business much for the better..

Not one of those stick homes the realtor showed you would have appreciated separate from the land..(If the seller was selling and you had to move those homes...the value would be NIL)..

Mortgage lenders have realized that manufactured homes and land react to the market just like any other type of home...Appeciation and depreciation are mostly a function of location...ask your realtor friend what is important in stick home..Answer..LOCATION, LOCATION, LOCATION...My guess is that that used manfactured home was in a good location..

Check out manufatured homes with confidence...find land in a good future location..have it built with a "permanent" foundation to qualify for the best mortgage lenders for you and your future buyers...And save money every month...

[Rosemary]

I think Dan is too kind in attributing real estate agents' belief about mh depreciation to ignorance. I believe that as more and more people catch on to the great value that m-h's offer, consumers will want to go that route and this takes sales away from real estate agents, therefore m-h's are a threat to their livelihood. I HAVE actually talked to 3 or 4 r.e. agents who do NOT parrot the "party line" about m-h's, but I think the majority of those who DO are just feeling threatened by the competition (as well they should!)

But my point about the 20-year-old, very unappealing mobile home was - this house had an asking price of $76,000 and was already under contract, therefore I assume somebody paid close to that price which proves the very opposite of the agent's statement that m-h's depreciate. As stated earlier, the cost of that house brand-new 20 years ago was probably less than $15,000, yet today it's going for $76,000 !!!!! WHERE'S THE DEPRECIATION?

And you're right, Rmurray, about the value of a site built house separated from its foundation - it's ZERO! the LAND is what's appreciating!

I'm convinced that manufactured housing is the way to go - the big problem is finding some affordable, unrestricted land. It's practically impossible here in north Georgia. This is something the manufactured housing industry had better start fighting!

Thanks for both comments!

[rmurray]

We have been fighting the local zoning boards for many years...You hear every political excuse in the book..The jist is that most county zoning boards are very friendly to the local builders....most of whom are locally connected and politcally active....They are the ones feeling the heat...They work hard to keep manufactured homes out of the mix...They know they cannot compete...

The manufactured home business is diversified over large areas, and it is hard to be politcally connected in every area they do business with...The example of our dealership is that we regularlly do business in 20 counties in 2 states...This leads us little time to even be active in our own county..

Georgia Manufactured Home Association (located in Atlanta)..is very effective on the state level...but they know local politics is local...They are making some attempts to get local dealers involved...but the attempts are slow in producing results..

We need the help of the people like you...When you talk to your county commissioners...Talk about manufatured homes...Tell them you are not happy about the zoning laws...We see it everyday....land owners not paying attention until they are told what to do with their land..The time to pay attention is before the laws are made..Good Luck

[Rosemary]

Yes, it's the old story of not caring about unjust laws until it affects YOU. People who like the idea of prohibiting manufactured housing in their area are flabbergasted when they find out they can't build a detached garage (for example) on their own property. "But it's MY property!" they shriek. "Who are these bureaucrats to tell me what I can do with my own property?!" The answer is - the SAME bureaucrats who tell others that they can't put down a manufactured home. The problem is - most people don't understand that it's the BASIC PRINCIPLE (dictating land use to property owners) that's wrong - that when you acquiesce to letting yourself be "protected" against a certain type of housing, you've given up YOUR property rights too. Maybe I should become a lobbyist for the industry.

[rmurray]

Call Charlotte Gattis at the Georgia Manufactured Home Association...Who knows...she might have a position open...If nothing eles she will get you a packet on dealing with local planning officials...

Your characterization of the folks reaction to zoning is very true...You reminded me of a picture in our local paper during a zoning change in Augusta...Lady in fromt of her 1100 Sq. ft home 15 year old home (worth 60K here) complaining about 2400 sq ft manufactured home on permanent foundation in the backround (worth 110K+)....The picture showed a piece of a 18 wheel truck parked in her yard..Already in violation of current zoning...After a few manufactured home dealers compalined..you saw her in paper all upset because zoning made her move the truck..HE HE

[Rosemary]

Oh, that is SO funny (about the truck) - but also frightening -- that these Zoning Nazis can wield such power over our lives - and even more frightening - that we lie down and submit without a whimper. But I WILL call Ms. Gattis - thanks for the tip!

[Dennis Hayes]

Rosemary,
Instant Equity?
How about a home that appraises for 20% more than it cost to build. 300% more efficient, will withstand 250 mph winds and an 8.5 earthquake. So...as far as appraisal value or depreciation, after a hurricane, tornado or earthquake I would say its value would be more than any in the neighborhood, since it would be the only one left standing.
Sound to good to be true, believe me it is now a reality, with a Solar Pyramid Home.

Dennis Hayes
Phi Designs, Midwest Sales Manager
http://dehsigner.tripod.com/
www.phidesigns.com

[rmurray]

The webmaster here would be more than happy to sell you advertising space and even web hosting without those annoying pop ups of the free site you use...All at very fair prices..