A manufactured home is entirely constructed in a factory before being delivered to its permanent land plot, so the idea of appraising it in the same manner as a site built home may seem rather strange. Some appraisers report turning down assignments because they believe they lack the necessary expertise to appraise a manufactured home. Yet all homes are appraised in accordance with the Uniform Standards of Professional Appraisal Practice (USPAP), which applies to real and personal property in California and other states.
1 Identify the user. Some lenders have appraisal standards for manufactured homes that apply in addition to the USPAP Standards. Freddie Mac and FHA-insured loans, for example, are only available for manufactured homes that exceed a certain size and qualify as real property. This means that the home must be used as a dwelling with permanent foundations.
2 Ascertain whether the manufactured home is permanently affixed to its tract of land. The Alabama Real Estate Appraisers Board offers two tests. If the tongue, axle and wheels of the manufactured home are removed and tiedowns installed, the home is physically affixed to the land. The second test is intent-based. The homeowner must declare the home as a permanent principle residence by registering locally for property taxes. If the home is affixed to land, it is treated as real property. USPAP appraisal standards apply.
3 Complete the appraisal using standard appraisal form URAR 1004. USPAP allows each appraiser to determine which recognized appraisal method to apply. For manufactured homes, the sales approach is a suitable method.
4 Research the market to obtain the sales prices of similar manufactured homes that have recently sold in your locality. As with all real property, the best data is the most proximate. However, certain lenders recognize that market comparison evidence is scarce in some areas, and will allow an expanded search radius. Average out your comparison evidence to give a baseline value for your manufactured home.
5 Adjust your baseline value up or down to accommodate your subject property’s size and individual features. All modern manufactured homes carry a label confirming that they are built to the Department of Housing and Urban Development’s (HUD) safety standards, so you can assume a similar standard of construction. The Alabama Real Estate Appraisers Board urges caution when determining your home’s measurement. The unit’s listed dimensions are shipping measurements, which include bay windows and overhangs. Appraisers assess only the gross living area (GLA) of heated living spaces within the unit. You can calculate the GLA from interior plans, or by physical measurement.