What’s the value of that mobile home I’m looking at?
That’s ALWAYS a great question. And one that takes some legwork, homework and time to get a good handle on.
The book “Outliers” by Malcolm Gladwell talks about 10,000 hours to get proficient at anything.
Average job is 40 hrs/week x 50 weeks/year (2 weeks vacation)
40 x 50 = 2000 hours x 5 years = 10,000 hours.
Now, I’m not talking years of time to get a handle on area values. 6 months of area research and due diligence to evaluate YOUR market and you will have a good idea of what something is worth and what it ‘might’ sell for.
‘Might’, of course, because until a check cashes and title transfers, we’re never sure to the penny.
And I keep underestimating what something will go for finished. We’ve been pleasantly surprised several times.
Better to be under than over estimate and get into trouble, right.
I visited with a park manager yesterday. Last summer we sold a short double wide there for $60k.
When we were working on it, we were told either we had to, or the buyers had to, add a carport and a deck. Park said we could pass it to the buyers. So we did. Saved us $5k-$10k. However, the buyers never got the carport or deck done. Manager said the people are now going to list it for $74k!!
But wait! But wait! Mobile homes depreciate while houses increase in value!!!
OK. I guess so.
Here’s an article on mobile home values from a nice Mobile Home blog site stuffed with info. Good site. I bookmarked it.
Check out #6 in this article. “Free home must be moved” is not always a good deal. I addressed this last week.
One thing they mention in #1 is that older than 15 years cannot be financed.
If you watch the video interview I did with a lender, that may not be correct. He only does manufactured home lending for the past 30+ years.
He says anything newer than June 15, 1976 CAN be financed.
HOWEVER, the home and sale price must pass an appraisal. The appraisal is the kicker.
Even stick built houses today are NOT meeting appraisals so cash is KING as always! I posted an article on this issue last week, too.
A mobile home I have for sale for $60k may only appraise for $40k. Drop the price or lose the sale.
Example: We had one last year that we listed for $89,900 and took an offer of $87k. Buyer had been pre approved by a lender for a mobile home. 21st Mortgage. Triad appraisal came in at $77k.
They can only run appraisals for a home in that park. The closest sale was for a home 12 years older and went for $77k a YEAR PRIOR so that was the max they could do.
Q – But there we several in the park across the street that went for more $ and more recently.
A – NOPE! Only that park we were told.
Q – But there were 6 brand new ones in that park that ALL sold just 1 or 2 months before for $95k! Ours was 200 sq ft bigger and MUCH nicer than all those. They were cheaper quality models than ours and smaller. All backed to a busy street. Ours backed on an open field with no plans to develop. Plus they all had carports, no sheds and we had added a garage!
A – New homes cannot be used for comps.
Q – Hey! Can we have the buyer pay us $10k and then finance the $77k for our price of $87k?
A – NOPE! Sale price is total price. Plus the buyer now thinks we’re gouging her when stick builts are experiencing the exact same thing. Comps coming in lower than sales price.
So do we drop the price $10K!!??
Nope! “Sorry buyer no can do.” Next!
We ended up selling it to a cash buyer for $89,900, after all that. Lost a month in the process but not a problem. Sometimes we will lose time. Just make it up in deals and it’s all good.
In Park Lending Video here!
Q – What if a home doesn’t qualify for a loan?
A – Options to sell would be:
1 – CASH = always KING!
2 – buyer gets a personal loan from their credit union or bank
3 – seller financing – you carry the contract
4 – lease option is possible but most parks want the residents to be owners, or be buying.