Opinions/advice sought

[Billy]

Hi all,
I'm preety new to the board, but I have become addicted, very good answers,my hats off to all the great posters.This is a long post..thanks for your patience!

I have a question ....several actually, maybe someone can help, if not, I appreciate the effort.

I am in the process of purchasing a manufactured home (Palm Harbor).
I found land (2.5) acres for 27,500.
The land has perked, and its georgeous land. Land in this area is selling for 12,000 per acre.

Palm Harbor sent an appraiser to appraise the land....the land appraised at 21,000, 6,500 off the asking price.
The price of the home with all land improvements, and the land allowance of 27.5 comes in at 124,430. Less a down payment of 3,600 total financed 120,830.

I cant believe this land appraised this low, I called the land owner, and he told me he paid 7,000 per acre and I believe him as he is very honest. If Palm Harbors appraisers are right the land appraised at not much more than what the man paid for the land.

The land owner said he know of a certified appraiser, that if we wanted could do another appraisal. If this appraiser finds that the land appraises at close to the asking price, can we take our appraisal to Palm Harbor, and get this deal done?

Or...do most mobile home dealers do their own appraisal, and thats the one they go with?
He (the land owner) said he is certain that the land would appraise for quite a bit more than Palm Harbors appraisal.

I have already signed a contract for the 120,830 mentioned above, Palm Harbor is saying that if we should decide to go with this we will have to come up with a larger down pay...to the tune of 7,000 more! This was not aggreed to on the contract....3,600 is the figure on the contract.

On the back of the contract, there is a clause that states that we cannot break the contract "for any reason other than cancellation because of any increase in price".

To pay another 7K in addition to the final figure is definitly an increase in price...I just want to make sure Im interpreting that right.

One last question: If I get the appraisal on the land and it comes up to what we need, can I take that appraisal to another manufacturer/dealer,and get a mobile home on this land...or do ALL dealers/manufacturers do their own appraisal, and thats the one they go with? I live in NC if thats any help.

We have our hearts set on this land. Thanks alot for your consideration!!

[Jon]

Billy:
While I don't know NC law, my understanding of the uniform commercial code (UCC) would indicate the lender is stuck with accepting the downpayment indicated in the contract. If they refuse to accept it, they are violating the agreement not you. If push comes to shove, talk to your attorney. You should be on solid ground with this.
With regard to the appraisal: Our experience has been the lender will only accept an appraised value that is different from that of their own appraiser under special circumstances. Having the higher independent valuation amount of a certified appraiser may help because it shows you too have the formal value estimate of a qualified professional supporting your position. If it doesn't help with the current lender, perhaps it will with another one. Still, before you spend money on an appraiser do a little homework. Ask real estate brokers for their opinion of the cost of land situated in the same area as your property (remember, a real estate broker's opinion is not the same thing as an appraisal). If your informal research indicates the lender's appraisal may be low, then consider getting your own appraisal at that time (keeping in mind a lender is not compelled to accept your appraisal).
Good luck!

[rmurray]

Is this a PH owned store....What has the dealer said when you asked this question...believe me..as a dealer I have often gone through many more than 1 appraisor...Appraisals are an art...not a science and 2 appraisors can easily be more than 20% appart...

Now I have a question...why would they be appraising only the land value...Quality mortgages look at the overall appraisals not the appraisal of just the land...The kind of financing that only looks at the land is the old stlye manufactured home finace that has a much higher interest rate than a first rate mortgage..

It might be that the home and the land might not appraise for 121,000 you need...There is only 1 finace plan that would allow this small of down and it is the FHA...All other finacing will require at least 5% down and sometimes even more..

There was something wrong with the quote from day one....Maybe this excuse is them doing what it takes to staighten out the lies that it sounds like they told you in the first place...

You can cancel this order with no penalty..

[Billy]

Thanks for the replys!!.

Murray,
Yes, this is a PH owned dealership, and his only option to us has been to find some land somewhere else, we CANT find land this cheap. And what do we do, keep paying for appraisals until we find land that appraises??!! He has not mentioned trying to get another appraisal for this land.

Yes...he did an over all appraisal, he (the dealer) is saying that until he gets the paperwork in front of him to look at the comps he will not be able to know for sure, but he is taking an educated guess that the land under-valued by 7K, give or take.

From the beginning we were planning on an FHA mortage, but after talking to the dealer, the dealer called the bank, and the bank said they could do it for this amount down, because of my extremly low debt to income ratio (i have very little debt). Its Wells Fargo that he called, we were sitting in the office when he called.

This land is wonderful if you drive 15 mile south, this land would easily cost you 15K per acre. Its good to know we can back out without penality....but Im wondering if we do another appraisal, and it comes in say, 5K higher than the one they did, could we do the deal then.....or could we take our appraisal to another dealer/manufacturer and they could go with this new appraisal.

Our hearts are set on this land......Again THANKS A TON for the replys.

[Dan F.]

Just FYI, I shopped for financing first then went to dealers with my approval letter. the approval is not an actual loan acceptance just a broker saying they can get you a loan. This way you buy on your own terms not the dealer. Also when you apply for financing they will give you the amount you can spend on land and the home. Plus some lenders have appraisors they use all the time and trust. I found my financing on this site on the dealer finance list. As a bonus I didn't put down a penny of my own money. the closing costs and brokers fees are slightly higher but I got the market % rate. Anytime you can invest someone elses money and keep the profit for yourself its a win situation. I am not sure if this is true but I heard that in fairness and in an effort to give the consumer the right to shop for the best deals, all credit inquiries pulled by a licensed mortgage company in a 30 day period only count as one inquiry. The same goes for auto laons only the time is one week instead of a month. just hearsay but nobody has disputed this so far. If this is not true I am sure someone will post a reply. Good luck let us know what happens.

[rmurray]

The land sounds wonderful....but the sales person is not up to speed....It is the package that appraised short...not the land..

Appraisers do not appraise the land and then add the home and improvements...They only appraise the whole package in the area you are putting the home..another way to look at it is that he appraised the home as over priced by 7K for the neighborhood..

Actually you could use this appraisal with the same size cheaper home..from PH or any company..The appraisal is sq foot based..and will be good for any manufactured home..This leaves you options..Cheaper land might not work because the appraisal would have to be redone for the new neighborhood..but less features OR more down OR different lower priced home all would work on this land...Of course the seller of the land could offer to take less money...OR the dealer could offer to take less money..OR a combination of the above..

Location is more important than any thing..do not give up on the land..

Just any appraisor is not going to be ok...It must be a FHA approved appaisor if this is a FHA loan...Fewer than 1 in 5 are FHA approved..

This deal can be done...He trapped himself when he promised the small down...Land seller and dealer could easily discount this amount...Candidly the PH is thousands over priced in the first place..You might try to shop this home at an independent dealer and use the same finance soucre and appraisal...Independents do not have the large corporate overhead and corporate required minimum deals...They will happily sell this home for 7K less..
By the way...my dealer always pays for reappraisals...GEEZ..the sales commision on this price home at this lot is $3000..He could pay for reappraisals if he really wanted your business..

Get tough and negotiate...but get the land you want..

[rmurray]

Pre approved loans are ok...but many independent dealer make no money from the finance end and know every lender in the market..Often they can save you money...A combination of both is really the best..your own source and listen to the dealer on what he can offer..

extra costs and extra interest do nothing for the home...

[Billy]

Awesome replys.

See being new at this I dont fully understand the process. My wife told me that it should be as simple as the dealer lowering his price. But, the base price of this unit is 67.5 this is with the quality construction features.....can the mark-up really be that much on this home...can the dealer really afford to adjust his price by 7K?

We have talked to the owner of the land....he has told us what he paid for the land, and believe me at this price the room for negotiation on this land is very, very little...if any.

Another thing I thought about doing....the wife isnt totally thrilled by this.I could talk to the land owner....ask him if he would come down let say 5K on paper on the asking price of the land...then finance the 5K "off the record" for us to repay.
BUT, this would involve TWO transactions, and about another $200 monthly to the land owner on top of the mortage.

I think you're right, the dealer has gotton himself between a hard place and a rock, and doesnt know how to get out of it......Im not sure why I should have to eat the 5-7K on this deal....ALL the PH dealers in the state of NC are corp owned...so I have no room in that area...I may have to look at another manufacturer.....but I love PH....esspecially this home.

BUT....if I tell the dealer Im willing to put down another 1500.00 this brings the downpay up to 5,100.00 That would still leave about 5,500 that someone is going to have to eat. I appreciate the your time and energy.

Murray...if it were you would you drop your price to accomidate us..esspecially AFTER the contract had been drawn

What other homes are of the quality of a PH in the SouthEast...I know Homes of Merit are....but I need something in NC.

[Mrs X]

Billy - take your floorplan illustration to another dealer and see if they have anything similar.

Because of the way Palm Harbor has mishandled this situation, I'd cancel the deal and go somewhere else. You've seen their true colors...

I agree with Mr. Murray about the land. Don't let it get away. You can find another home to buy but the land is unique and they're not making any more of it. This may be a blessing in disguise. You'll probably find another house at another manufacturer that you like better for less money.

Hope you'll let us know - and good luck!

[Billy]

There is an independant Palm Harbor dealer in VA.....its actually as close to us as the one that we have been going to.

Since I already have paid for the appraisal on the land, and I have "good faith" money deposited in the land-owners escrow account...I think that Im going to ask for my copy of the appraisal...the land owner has already said that he will hold the escrow, and the land....I think Im going to cancel the contract, and go to the independant PH dealer in VA.