cost and appreciation

[Latonya]

I am in dire need of assistance. I live in Texas and I am not very familiar with manufactured housing, but it did seem to satisfy my need for space and the cost did seem manageable. I am a little concerned that the Clayton sales rep is trying to take advantage of me because I am a single female. Is $78k for a 32 x 80 manufactured home unheard of? Also, I would like my home to appreciate in value if I decide to purchase it, but I have been searching the web and it seems that all the information I get would lead me to believe that they only depreciate. If you can help me, please respond.

[rmurray]

It is hard to say if the price is out of line...There are homes in TX that are reasonable homes at much lower prices..I am sure there are others that cost more...Read the posts on these forums...There is a long thread on one..which a buyer is talking about a similar size Palm Harbor selling for $64K..in TX..

Appreciation like in stick built homes is ONLY a function of location..location..location...A site built home in the wrong location will depreciate..a manufactured home in the wrong location will depreciate...

If the used home is sold and has to be removed from the site..or is in a temporary rented site..you will lose about 40% of the purchase price of a manufactured home...This is much better than a site built home that is sold to be moved..they will lose at least 80% of the original value if they have to be moved..

The point...this is a home...think of it as such...location is the key to a successful resale..In most cases..rental parks are not the location to guarantee a good return...of course this would be true with site built as well..so much so..there is no such thing as a rental park for site built home..

You should be buying property along with your home...be sure the property is in a desirable area if resale is important to you...You should be financing the land..the home..and the improvements all in 1 package...

Most important with this dealer...you should be very aware of the financing..they will try to sell you home only finance at rates in the 11% range...when mortgages are very available at 6% interest...remember 1% interest in this price range costs about $20,000 over the life of the loan...DO NOT allow this dealer to sell you home owners insurance..shop around..you will find it cheaper than they sell...particularly do NOT allow them to sell you 3 to 5 years insurance at one time...That means you are financing (and paying interest on) large amounts of insurance long after it is gone,,,

They will talk to you about the "BUBBA" loan..they will show you the thousands of savings...of course..all this is is you paying 1/2 payment every 2 weeks (1/2 early every month and 1 extra payment per year)...which means a 30 year note will be paid in about 21 years..saving 9 years of payments...what they do not tell you is you can do this same thing with ANY home loan..theirs is nothing special..

Clayton makes its money on high interest rates..and high insurance...more so than the house..the sales person get lower commission if they do not sell you insurance and finance...so they will make theirs sound pretty good..They will try to show you how you payments are "lower" with their plan because a mortgage involves an escrow for future insurance..they do not have an escrow..which means you will have to buy insurance out of pocket in the future..

Now..1 question...does a single lady really need 2300 sq. ft. of home..remember all costs are higher in larger homes...heating and cooling if by the cubic foot (energy bills will be much higher for this size than average homes)..taxes in many areas are by the sq. ft., cleaning and care are by the sq. ft...long term maintenance is much high for larger home..example..shingle replacement will be 50% higher than normal sizes..carpet replacement will be higher...just decor changes will cost much more..the list goes on and on..All things a homeowner must think about..

Good Luck..and stop back often and ask questions..

[mindy & jason farley]

We are looking at a 2001 manufactured home, 3 bedroom, 1 office and 2 bathrooms 1512 square feet. In a resadential area in Washington state. It is in very good condition and is on two lots. The owner is asking for $121,000. Is this a good price for a manufatured home? Will it increase in value?

[Wendy]

Personally I have found that land and manufactured home packages appreciate in value when financed as such. I did a lot of research prior to purchasing my home.

For my area I found that land/homes packages had appreciated 60% from ten years ago.

I believe that manufactured homes are like anything else. If you do regular maintenance on your home, repair what needs to repaired, paint when you need to paint, etc. your home should last you.

If you do not do regular maintenance on your car (i.e. change oil, rotate tires, etc.) it too would depreciate.