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Mobile vs. Manufactured vs. Modular

The 3 M’s of housing… Thanks to Hollywood, all three words used to conjure up the same visual in my mind. I thought of Jim Rockford of the The Rockford Files. This was my favorite show growing up. He used to live in a mobile home in a parking lot in Malibu, CA. I once won a radio show call-in contest for trivia about his Firebird. The question? What was Jim Rockford’s license plate number? The answer? 853 OKG. But alas, I digress… This is after all, a blog about real estate. Back to the 3 M’s.

Visually, the 3 homes may look alike. Structurally, they are built the same way (they are all built in factories and brought out to the lot in sections). But, that is where the similarities end.

Mobile and Manufactured homes are built to standards set by the Department of Housing and Urban Development (HUD). Modular homes are built to state and local building codes. When sold, Mobile and Manufactured homes are considered to be no different than a motor vehicle. On these structures, you’ll find a VIN (Vehicle Identification Number) just like a car. And like a car, these structures are considered to be “Personal” property. Modular homes on the other hand, are considered to be “Real” property just like stick built homes (built on the property).

Financing a Mobile or Manufactured home is more difficult than financing a Modular home. In fact, unless the seller has taken steps to convert the home from personal property to real property in a process called “title elimination“, it can be nearly impossible to find a bank who will lend on a mobile or manufactured home. Financing a Modular home is much easier and no different than if the home were built on the lot. The revised codes of Washington (RCW) section 65.20.040 outline the process for title elimination.

Bottom line –

There are serious financial and legal differences between Mobile / Manufactured / Modular homes. Be educated. Know what you are buying. And if you get the chance to watch The Rockford Files, look for his license plate…

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This past week I was contacted by a friend/client to whom I had helped buy a house several years ago. He was interested in selling and wanted to know how much his home was worth in today’s market. It had been awhile since I visited his home, so I asked the standard questions such as what improvements he had made to the home, maintenance issues, etc. I then proceeded to do a CMA (Comparative Market Analysis) to determine a ballpark valuation.

When I gave him my results, he was a bit disappointed to say the least. He then proceeded to scour the web for his own comparables and sent me a long email with a list of addresses, sales dates, and Zesstimates from Zillow.com from which he used to create his own list price. That’s when the real fun began!

He mistook the Zesstimates as “actual” sales prices instead of what they really are, which are estimates of value based on tax data and other area factors. So, a home he thought had sold for $681,000 in reality had only sold for $635,000. In another example, he compared the $/sqft of his home with homes on Zillow only to later find out that the data on those homes listed on Zillow.com was off by several hundred square feet, which gave him erroneous results.

What’s my point in highlighting this situation? My client isn’t to blame for his assumptions (however wrong they were). He saw something on a website that he believed to be correct and relied on the data. Unfortunately, it is hard for the average consumer to know what is accurate and what isn’t. There is so much incorrect information available on the internet that even a very smart person (which he is) can be easily confused. Zillow.com, like other data analysis sites on the internet do the best they can to provide reliable information, but their computer modeling is only a small part of the equation when it comes to selling real estate.

My client then jokingly suggested that in order to “earn my commission”, I should be able to sell his home for what he thinks it is worth, not what I told him it is worth. My response was that I earn my commission by providing accurate and reliable data (and subsequent analysis) to my clients so that they can make educated and informed decisions instead of relying on Zesstimates.

What are your thoughts?

See your home from space!

I know for many folks who follow technology, Google Earth may be considered old news, but the coolness factor is such that I like to come back and check it out every now and then. Satellite images are nothing new, but how they are being utilized in the Real Estate industry is what is generating the buzz. Another site worth checking out is Zillow.com, where you can get a computer generated assessment on the value of your home. I know of many instances where the “Zesstimate” has been way off the mark (10% or greater error factor), but I applaud their attempt.

Many industry pundits cite this new wave of technology as the beginning of the end of real estate professionals. They obviously don’t understand or haven’t been educated to what extent we help facilitate the transaction and counsel our clients. Additionally, just because the information is out there, doesn’t mean that it is being interpreted or used correctly.

The best analogy I can come up with is this – You can learn how to do a heart transplant on the internet, but does that really make you a surgeon? My suggestion? Seek out as much information on the internet as you can, and use that knowledge to become a better informed consumer when dealing with a professional. It takes more to sell a home than just coming up with a price.

What are your thoughts?