How Much Is My Mobile Home Worth?
How Much Is My Mobile Home Worth?
How much is my mobile home worth? A lot! In our experience as professionals in the manufactured home industry, we always come across homeowners that do not fully understand how to value their home. This can be a touchy subject because we often have an emotional attachment to our homes; over time we put in the effort to fix our homes, we create memories in our homes with the ones we love, we may love the community that our home is in, and in turn, we attach that love that we feel for all of those things to our home.
Unfortunately, the reality is that we cannot include our emotional value in determining the price of our home. Or, we can, but that tends to lead to putting a higher dollar amount on the home than what the actual fair market value for the home is.
For example, this single wide 1 bed 1 bath home located in Gardena Villas in Gardena, CA, is listed for $70,000. While this looks affordable compared to other homes that are listed for $100,000 plus, it has been on the market for 144 days. Why is this? Well, likely the owner or realtor looked at prices on websites like Zillow and MHVillage and based their price from other listings along with including the emotional value they feel for their home.
Mobile homes in land-lease communities are not real estate and should not be appraised as such. Regular real estate agents are typically not equipped with the tools needed to value them.
So, this begs the question, how do I determine the value of my home? In the article below, we address several factors that you should consider when determining how much your home is worth and how much you should list it for.
Factors that contribute to a homes value:
Lot rent of the park
The lot rent of the park plays a huge role in determining just how much you may be able to get for your home. This is because it includes other factors such as the city your home is in, the median price of manufactured homes in the area, school districts, etc. (click here to see our previous article where we discussed lot rent in Los Angeles County). Though mobile homes aren’t technically real estate, the old adage location, location, location still matters. The same home in a desirable community or area will be worth more than one in a less desirable area.
For example, a home in a five-star waterfront community will be worth more than one in poor condition or one in a community with fewer amenities. This 2018 2 bed 2 bath home is located on the Palos Verdes coastline and is listed at $989,000. Compare that home with this 2019 2 bed 2 bath home located in Lomita listed at $165,000. Although one year newer, the home on the Palos Verdes coastline is considerably more.
Why does this matter? Because the lot rent of the park can deter people from wanting to live in that particular park. Therefore, while the home may be affordable, a seller may have difficulty selling the home due to the lot rent. For example, the lot rent at Palos Verdes Shores MH & Golf Community is $1,800. Meanwhile, the lot rent at Royal Western Park in Gardena is also $1,800. Palos Verdes Shores community provides many high-end amenities, while Royal Western does not provide any amenities other than a community swimming pool.
We recently sold a home in Royal Western Park. Initially, the home was listed for $30,000. While the home garnered a lot of interest, buyers ultimately decided the lot rent was not worth purchasing the home. Fast forward to today, and the home sold for $10,000. Even though the home has now sold, the buyer will be moving the home to a new park where the lot rent is affordable. If you are interested in checking out our inventory, join our Facebook group!
The takeaway here is that the lot rent is going to undoubtedly contribute to how much you can get for your home. In the last example, we would have been able to sell the home for $30,000 if the home was either in a park where the lot rent is more affordable or if the home was in a more desirable park.
While the year matters, it matters more so when comparing homes that are far apart in age. The rate of inflation may make an older home worth more than it was 10 years ago, however some sellers tend to compare the value of their home using the same appreciation idea of a stick build home. Unfortunately, this is simply an inaccurate way to determine the value of your home. Lets return to the example of the home that we just sold in Royal Western Park. This is a beautifully renovated home. Nevertheless, the home is 1968.
Interior of Mobile Home
Mobile Home Bathroom
Mobile Home Master Bedroom
Take a look at this listing for a similar single wide, 1 bed 2 bath home. The home, in our opinion, is not as nice as the home we sold, but the key difference is that it was built in 2019. (Please note how long this listing has been on Zillow this tells us that although the home is a new build, the realtor is overvaluing the home because the realtor is unfamiliar with the market.)
Repairs are also a huge factor in determining a homes dollar amount. Manufactured homes are not built with the same materials as a traditional stick-built home. This is because the homes must be light enough to travel at high speeds on a highway when being transported from one place to another. If youd like to know some of the basics of manufactured home characteristics, check out this Inspectapedia pdf.
The big-ticket expenses that will devalue a home are roof repair, floor repair, AC repair, plumbing repair, and electrical repair. The price of repair varies depending on your location. Here in California, owners can expect to pay a premium to have these repairs done. For example, the cost to repair a shingle roof on a double-wide manufactured home can cost up to $4,250 for the average contractor.
Usually, when a seller is looking to sell, especially for older homes, they are looking to sell as is. If the buyer is expected to take on the cost of repair, the anticipated cost of repair should be included in the price of the home times 1.5. We suggest doing this because the cost of repair is almost always more than the initial quote.
Therefore, if any of the big-ticket items need repair, and you are not going to take care of this yourself before selling your home, the value of your home will generally need to be reduced by around $5,00010,000 depending on what needs to be done. Homes that need repairs across several of the big five are usually what we term handyman specials and go for the bare minimum if anyone is willing to take on the project at all.
What other homes in the park or area has sold for in the past several months
After considering all of the above, a seller will need to look at what other homes in the same park, or general area, has sold for. This is termed comparables. Zillow can provide some insight into what your home may be worth; however, because of all the factors mentioned above, the value of a home is really determined on a case by case basis.
Take a look at these two listings: the homes are in the same park, are close in age, have the same number of bed and baths, but are $35,000 dollars apart. This example shows us that while the homes are comparable, the price is determined by the individual factors of the home. Zillow estimated that this nearby homes value was $34,006, however it sold for $37,000.
A more accurate way to assess your homes value is to first consider all of the other factors listed above, and then use comparables.
Owing money for taxes, lot rent, or your home loan
This is a topic that we will go into further detail on later, but owing money for taxes, lot rent, and/ or on the home loan are things that must be factored into the amount that a seller wishes to sell their home for because these costs are usually passed on to the buyer. For example, in California, a buyer will usually pay unpaid lot rent of the seller before they can move into the home as well as late fees.
If a seller has not paid lot rent for four months, and the lot rent is $900 a month, the buyer will have to pay $3,600 and any other late fees charged by the park. This dollar amount should be factored into the purchase price of the home since the buyer will be taking on the obligation of the seller to get the lot rent current, allowing the seller to avoid legal action by the park. The same is true for money owed for unpaid taxes, and usually a home loan.
For home loans, the loan is guaranteed using the home as collateral for the loan. Therefore, if a loan is not paid off the lender can repossess the home. From our experience, if there is a significant amount owed on the home, a seller is happy to get from under the loan by selling the home for the amount still owed on the loan.
If the home needs to be moved
Lastly, if the home needs to be moved out of a park or from private land, the buyer is generally responsible for paying the cost to have it moved. Aside from the legality of moving the home, this cost can be significant even if only moving the home somewhere else in the general area.
For example, it usually costs between $2,000 and $5,000 to move a mobile home less than 100 miles. While this responsibility ultimately lands on the buyer, if you are selling because the home must be moved out of the park, the cost of the move should be considered when determining the price of the home. Ultimately, it may not be worth it to a buyer if the seller is trying to get fair market value for a home that needs to be moved, and the move would add an additional $5,000 – 10,000 that the buyer will have to pay.