rotten appraisal

[Wendy Aikin]

Hi, sure wish that I had found this site BEFORE we got our manufactured home. My problem is that I can't get an equity loan because of our "manufactured home" status. We have our Silvercrest Manor 2135 sq. ft. home on 1/2 acres on the central coast in California. I made the mistake of gutting the home when it arrived, donated everything to Habitat and did custom work inside. In addition we did extensive landscaping with a total expense of $851,870.00. Now this includes everything; land prep. engineering, septic, water and elec. to lot, compaction, foundation, concrete work, tree work, drainage, driveway, garage, outbuildings, decks, landscaping, the cost of the home and home upgrades. I love my home and there is no way you could touch a similar stick built home for under 1.2 million in this area. However, no manufactured home has sold in this county or adjoining counties for the last year. No comps. My comps came from a mobile home park. I'm just sick. The appraisal came in at $600,000.00. The land alone is worth 300K. I don't understand why my home is compaired to "trailers" rather than homes. It is better built than most of the 20 year old stick built homes in the area. What do I do?

[rmurray]

Appraisal rules are different in every state...the rules are made by the states appraisal laws....also...some lending programs have their own rules in addition...such as the FHA which has extensive rules for appraisers to follow...then individual lenders may impose their own rules as well...

In special circumstances like yours...most lender will allow at least 2 stick built comps...and 1 or 2 out of area manufactured home comps with explainations....

The best approach will be to find a mortgage company that has an originator that is very familiar with manufactured homes..and their company rules..they usually will know an appraiser that is familiar with the special rules for manufactured homes...Appraisals are nothing but a guess of value made by an expert in the business..It is not unusual to see competing appraisers over 20% apart in numbers...Especially in special circumstances like yours...

I would suggest that you call the manufactured home association in your state (or a local dealer in a near by county) and ask for active lenders in CA...Call one of them and be sure you have an originator familiar with manufactured homes...

Unfortunatly...in new homes...manufactured or stick homes...extensive renovations like you made do not effect the appraisal amount at all in most cases..they might make the home more attractive for a buyer...but not for an appraiser..

For lender outside of CA..these numbers might be confusing...it is rare for a manufactured home to be in a million dollar market area...I would be sure I was dealing with CA lenders who are familiar with these large numbers..

Good Luck

[Wendy Aikin]

Thanks for your prompt answer. It doesn't solve my problem, but it certainly gives me some direction! I will tell you that I was led to believe (by my dealer) that once the home was placed on the foundation and bolted down, it was looked at just like a stick built house. I guess that only applies to the County Tax Assessor. Now I know... a little too late. I will recommed your web site to all the folks that my dealer brings to my home hoping to "sell."

[mac]

So the house itself is worth $300K - for 2135 SF that's about $150 a SF. The purchase price is less than $50 a SF. $150 a SF is likely replacement value for a dwelling on the CA coast (what does your insurance say?) So I am not sure I see the problem. If it were site-built, why would it be different? You're getting more than you paid for the house... I guess I don't see the problem.

[Jon]

A good market approach appraisal should consider all factors that may affect value, especially improvements. If your appraisal report did not consider the improvements you should ask your appraiser why it does not. While there may be a legitimate reason for their exclusion, though most of the time they should be included.
Although overall professionalism is rapidly improving, a few traditional bankers, appraisers, etcetera, still hold some bias towards manufactured homes. In the future you may want to take a few moments to insure that such individuals view manufactured homes as homes, not trailers, and that they are professionally experienced with them.
All the best.

[Cathy]

Just read your question and wondered if you were able to get an equity loan afterall? My husband and I are in the process of buying a new, 2160 sq. ft. Guerdon which we are going to set on a full, daylight, walk-out basement, on a $250,000 river-front lot here in northwest Montana. After reading your email, I am wondering if we, too, will have problems obtaining an equity loan after completing the project. As with you, our dealer has assured us that the home will appraise just like a site-built, once it has been welded and tied-down. What would you suggest to us since we have only excavated the basement at this point? We have not yet paid for the concrete work for the foundation, nor have we signed a contract on the manufactured home as yet. Your response would be most helpful.