Paradise lost, or disaster averted.. you be the judge

Industry pros offer their experience in manufactured housing to help first time buyers to make informed decisions with confidence and peace of mind.
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stekow1111
Posts: 12
Joined: Sat Aug 18, 2012 9:10 am

Paradise lost, or disaster averted.. you be the judge

Post by stekow1111 » Mon Feb 04, 2013 11:25 am

I will try to recall the events discribed here to the best of my knowledge and if errors are made I will try to error only on the side of caution.

This past summer-fall, 2012 my wife and I who are both fully retired decided to spend a day going around the local area to view double wide manufatured homes. we had looked at them when we first got married over 40 years ago, but just weren't impressed enough to buy one.So we were eager to see how they had changed over the years. Over the following month or so we had looked at many double wides in probably 10 different parks. After comming to a fair degree of certanty about which park seemed to come the closest to our liking and life style, we went in and talked to the park manager. We felt she was being up front with us on representing the business end of the park and presenting evry thing in a truthfill mannor.

Now we had talked with several other park manager. One of which managed a very nice upscale park, but he did not come across as being honest at all, and I would not trust him to oder a brand new home correctlyto our specs. The other previously looked at park was run by a management company and the lease and rules contained what must have been at least fifty pages some of which described some of the rights that you must be willing to waive. So that was an imediate showstopper for them.

Moving foward. The manager of the park that we were willing to go with told us that their pricing policy was all inclusive. the price would cover the manufacturing, transporting lot prep, set up, connecting utilities, ect.

So far so good.

So after three more visits to the park and 6about 4 hours of time for picking out the floorplan,features, upgrades and the desired lot locarion we trooped off to our credit union to apply for financing as the manager said we would be ready to order within a week to ten days or so. Now we had previously talked to the park manager about their financing options. Every one of the 20 or more financing companies that they used were out of state. Hmm. Once before I had a lacaly secured home mortgage sold to a company which was out of state and it turned into a legal nightmare. So from that point on I only do business with banks where I can talk face to facewith paperwork in hand.

Now I had previously talked with the credit union about finacing a brand new manufactured home and having it placed on leased land. they ran our numbers and said there shoulnd be any problem.

Ok so now wer'e at the credit union and talking to the manager preping the nessasary papers and info. she asked the price of the home and we stated the price we had been given by the park manager. Then she asked what the tax would be. We told her the price was all inclusive as mentioned above.Thats when the plaster started to show some serious cracks. The credit union manager said that They could only finance the price of the retail home cost . they could not finance the transportion, setup, lot prep or utilitiy hook up. so she agin asked if we knew the cost of just the manufactured homeand retyail mark up. I said no but proceded to call the park manager being certain that she coult answer that questin. with the park manager on the line I gleefully handed the phone to the credit union manager. Aster a short conversatinand hanging up the phone with a puzzled look on her face, I uh oh. she said that the park mander told her that they will not give aseperate retail price just for the home. They simply don't do that. Our jaws dropped.
I can only imagine that the manufactured home park that we were doing business with did not want us to know the margin of profit on the home.

Soooooooooo. the credit union manager who openly felt very bad for us opened the topic of looking for a home on the realestate market. She wrote up several finacial senerio's based on number we had given her and current loan rate including conventional and fha loans. all fixed rates.
So as of yesterday we talked to several realestate buyers agent and we are currently new house hunters. My wife and I look at this experience with the manufactured home as being something that just wasn't meant to be. We are anxious to see what the future holds for us. Dispite being at the end of our shopping for a manufacture home I will continue to monitor and post on this site as I feel I have alot of knowledge to offer.

good luck to all.

Jerry

David Oxhandler
Posts: 1459
Joined: Tue Oct 02, 2007 8:37 am

Re: Paradise lost, or disaster averted.. you be the judge

Post by David Oxhandler » Wed Feb 06, 2013 5:41 pm

Jerry -

No one in ANY business is going to tell you their cost. It tends to cause too much resentment, regardless of the mark up, and is a very poor business practice. I doubt that the CREDIT UNION was asking for the dealer's cost but rather the retail price of the home .... less the costs to transport and install. This has been a common practice with many lenders for some time.

When you get a loan for a manufactured home the lenders security is ONLY THE HOME. In the event of a default the lender has no way to recover the cost of transport and installation... especially if the home has to be reallocated in order to resell it.

The recent crash of the mortgage market left banks and finance companies as owners of hundred of thousands of homes in every market across the country. This has turned the loan business on its head. The massive losses have driven lenders to be ultra conservative. They have tightened underwriting standards, making it almost impossible for most folks to get any type of home loan. Apparently your credit must be outstanding.

Most of the more desirable parks will not let anyone bring a home in that the park operators do not sell and install. The economy of developing and maintaining MH Communities today demand that the owners seek that profit to lessen the bottom line impacts of development and maintenance. In most cases without that income the monthly rent would have to be considerably higher. If you have your sights set on that community, turn around and get the selling price for just the home. If the lender needs to discuss mark up that needs to be a confidential discussion between lender and seller.

I can offer you some alternative suggestions. If you decide to abandon that park and look elsewhere. Consider a community where you own the land. The cost of owning your land is significantly less over the years than paying rent. There are more and more occupant owned parks and subdivisions across the country. Many of them are very upscale and offering amenities very much like the classiest land lease communities.

I always suggest that home shoppers start with the independent local dealers first... this will give you a handle on the base market cost of just the home. Start by clicking thru to http://www.mobilehome.com/homefinder.php --- click on your state. Visit the nearest dealer that the system returns. The dealer locations in that system are all wholesale new home dealers. They will offer the lowest price on new homes in your area. They DO NOT install homes. They are strictly sales operations. If you don not see the plan you want on their sales lots can you most often will be able to custom ordered from the factory.

Most intelligent people can locate local licensed contractors and arrange to have their home set up, tied down and utilities hooked up.... saving a significant amount of money that otherwise would go towards middle man profit to the dealer or park owner.

Alternatively, visit the nearest dealer that offers bank repos. The number of foreclosed homes for sale in every market is still very high. You may be able to find an almost new home in great condition that the banks will likely not only sell at huge discounts over new homes ....but also be happy to make unusually good finance arraignments to an individual like yourself with a great credit history.


Good luck with your search
David Oxhandler
[email protected]

stekow1111
Posts: 12
Joined: Sat Aug 18, 2012 9:10 am

Re: Paradise lost, or disaster averted.. you be the judge

Post by stekow1111 » Thu Feb 07, 2013 4:42 pm

Thanks for the reply Dave. I understand what you are saying about the poor business practice. But on the other hand It was a fair question on the part of the bank. all they asked for was the retail price, not the margin of profit. When you say The retail price could have been discusessed in private between the dealer and the bank, it sounds like you may have meant as in :behind my back".. In which case it would be poor business practice on MY part to allow that to happen. Besides, I don't think my banker would treat me like that after granting me 3 conventional home morgage over the past 40 years.

One thing you are mistaken about. There are many business dealers who would show you there cost. I would never purchase a brand new vehicle without asking to see the invoice first which show the dealers cost. If he says no than so do I. But I find that 40-50 percent of new auto dealers have no problem with this. It sevrves as a good starting point for negotiation. For me to not ask this question would be poor business practice on my part.

But in the end I'm glad things worked out the way they did. We are now working with a real estare buyers agent under the pre approval of our bank.

But again. thanks for the reply.

Jerry

David Oxhandler
Posts: 1459
Joined: Tue Oct 02, 2007 8:37 am

Re: Paradise lost, or disaster averted.. you be the judge

Post by David Oxhandler » Mon Feb 11, 2013 6:51 am

Jerry

Auto.dealers are happy to discuss their invoice price. They never let you know their real cost. It is a nation wide fraud on the public. That invoice is.produced for.public consumption and never.tells.you about the dealers factory rebates, or their monthly or yearly dealer volume bonus programs. Most dealers. can sell below that invoice.and.consistently make profits .

It is common for lenders who finance high price items to demand the sellers mark up not exceed a set percentage with out sharing those.details with the customer. Lenders are protecting themselves and the customer to insure the seller is not financing a.profit that would create an unrecoverable loss in the event.of.a.default.

Owning the land under your home is the best option unless you desire to buy into a.community life style otherwise unavailable in a.desired location.
David Oxhandler
[email protected]

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