What is the right price for a used mobile home?
Tuesday, July 17, 2018
You can get a rough idea of how much a used mobile home is worth by using an online service like NADA Guides and pay $20 or $50, depending on the level of detail you want. Go to http://www.nadaguides.com/Manufactured-Homes to get started. But, ultimately, a used mobile home is only worth what you can get someone to pay for it, and that number may be more or less than its estimated value, depending on how many buyers are out there and how the competing homes for sale are priced.
A professional appraiser evaluates a mobile home in the same way as a site-built home, taking into consideration things like the site, square footage, and condition, along with comparable recent sales—and you should do the same. In some rural areas that don’t have a lot of recent sales, pegging the right price can be difficult. A local realtor that has experience with mobile homes can be helpful.
Here are seven other variables that can affect the value of a mobile home:
1) Homes 15 years old or more cannot be financed through regular lending institutions. This means that a buyer will have to pay more for their financing from a secondary source or pay cash. Either way, it decreases the value of the home.
2) Homes that have been moved from their original site do not qualify for the preferred FHA and VA financing. These are called “second set” homes.
3) The tie-down standards for mobile homes were raised by HUD in 1994, as a response to the devastation from Hurricane Andrew in South Florida in 1991. Then the state of Florida further raised the standards in 1999. “Homes installed before 2000 require an upgrade of their tie-down system in order to get financing, if it hasn’t been done already,” according to Dianne Chewning, a Century 21 realtor in Old Town, Florida.
4) Homes located in a park (you don’t own the land) that is in less than desirable condition are devalued by their location. Conversely, homes in upscale parks like Paradise Cove Trailer Park, on a bluff overlooking a private beach on the Pacific Ocean in Malibu, Calfornia, bring top dollar. It’s hard to find one there for less than $1-million.
5) The condition of homes that are the same age can vary widely depending on the quality of construction and level of maintenance.
6) If you are buying a mobile home that has to be moved as part of the sale, be aware that moving it can cost more—sometimes much more—than you are paying for the home. This is why we tell our customers that a “free” mobile that must be relocated is not really free at all. Moving a used mobile home to a new location also requires that the home meet the standards set by the county or city that it is being moved to, and they specifically do not accept dilapidated, older homes, not matter how much you plead and tell them about all the repairs you are going to do. An inspection by a professional is typically required, and any necessary repairs must be done and approved before it is moved.
7) Manufactured homes have a life expectancy of 30 to 55 years, depending on the level of maintenance, according to the U.S. Department of Housing and Urban Development (HUD). Rehabbing a 40-year old or older mobile home, or even just continuing to maintain it, means you are investing money in a unit that is typically under-insulated and has an electrical system that is too small for today’s electrical loads. With careful, meticulous maintenance, a manufactured home can last longer than it’s life expectancy, but will have minimal value. The one exception is vintage homes that are considered collectible by trailer enthusiasts.
Also, see our blog posts What are the most common problems with older mobile homes? and Does it make sense to buy an older mobile home and remodel it?
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