Real Homes, Real Value: Challenges, Issues and Recommendations Concerning Real Property Appraisals of Manufactured Homes
Many appraisers and professionals working in the manufactured housing industry express frustration with the existing process for appraising manufactured housing. Appraisers invoke challenges that do not arise in appraisals of site-built homes, such as rules governing the selection of comparable sales and difficulties in locating information about sale prices, title, foundation and other issues. Manufactured housing professionals, in turn, believe that the appraisal process does not always result in fair valuation of manufactured housing, which provides homes for millions of Americans across the income spectrum.
This study, part of the Single Family Finance Initiative of I’M HOME: Innovations in Manufactured Housing, looks at the practices of appraising manufactured homes as real estate and finds that the appraisers’ and industry professionals’ concerns have substance. The author, Robin LeBaron of Fair Mortgage Collaborative, interviewed 21 appraisers and industry professionals to identify appraisal challenges and issues. The paper also makes a number of specific recommendations to address the problems, falling into the categories of:
- Working with stakeholders to arrive at clearer and more consistent definitions of manufactured housing that can be universally applied
- Providing greater flexibility within the rules that govern appraisals of manufactured homes
- Developing practices and systems to facilitate appraisers’ work and improve valuations through more and higher-quality information
- Offering better education and data for appraisers on how energy efficiency should be valued in the appraisal process
Richly illustrated and annotated, the study is a “must-read” for finance and housing professionals.