Figuring out the value of your home is an art.
If you’re contemplating selling your mobile home, and you have some idea (or have no clue) of the price your should sell it at… then read on about how to prevent yourself from being way off and having the home sit for a long time and price your California mobile home the correct way.
This is a true story of a seller who called me 3 days before Christmas.
She, had her home listed with a realtor for 6 months. She had no idea WHY her home hadn’t sold.
I checked into it. I brought up my comparable sales report. I looked on other online sources. I made a couple of phone calls to verify my research… and I found… that her agent over priced her home by $40,000!
It wasn’t that her agent was a bad salesperson. It’s just that her agent was a friend and listed her home as a favor. But her agent friend didn’t know mobile homes. She probably knew stick-built-houses very well… but not mobiles (and this isn’t unusual by the way)
Long story short…. I didn’t buy it.
The amount of money that she needed to pay off debt and the amount she owed was a lot more than what I can pay for the property.
(she waited too long to call me)
She ended up losing her home to the park instead (not too sure if that was a better option).
So, to prevent that from happening to you, here’s the process to valuing your home precisely.
Before you start asking anyone what your house is worth… take a look at your own home.
I mean, really take a CLOSER look.
The biggest mistake that people make when evaluating their home is they give it extra-value just because it’s their home. They’ll say things like, “Well, I put like $10,000 into the bath flooring, and my paint color is a better choice than Tim’s, and I put in plush carpet instead of the cheaper carpet…. so my home might be worth more than all the others”.
This type of self talk will cause you to lose a lot of time and money.
Because potential buyers don’t care too much about those things. They care about size, beauty, and functionality.
So, don’t get trapped into this thinking.
Start thinking truthfully about the home. We’ll start by doing a “walk through” of your home.
Answer these basic questions and write them down:
- What’s the year of the home?
- Is it a single wide or double wide?
- What’s the size (multiply the dimensions on title)?
- Rate the condition… Excellent (remodeled or rehabbed), Good (only minor cosmetic repairs needed), Fair (minor-major cosmetic and SOME functionality/mechanical repairs needed), Poor (not livable, holes in sub floor, major functional/mechanical repairs.
- What are some special features? Like, a large open space. A very large master bedroom. A hot tub. A larger yard than others. etc.
Now it’s time to compare it to the market.
Comparing your home can be tricky. Because sometimes it’s hard to find “LIKE” homes that are comparable to yours.
Most likely you’re not going to find the exact model that recently sold. So you’re going to look for SIMILAR year and size mobiles that have SOLD, THEN look at homes that are currently listed (called “Active”).
It’s important to look at past sales, not so much current for sale listings, because the current listings haven’t sold yet and they can be off quite a bit.
Three online sources to look at (We are going to mainly look at “sold” homes. But, “active” listings are going to tell is where the market is headed and what you are going to be competing with):
The MLS is where most real estate is listed on. Even manufactured homes. However, there are areas and parks where very few mobile homes are listed on there. If it’s a park where very few agents work in, then most of the homes in that park are sold For Sale By Owner and so you won’t find online listings. (I’ll talk more about these type of parks later)
- Pros of the MLS: You get to see pictures of mobiles to have better perception of type and condition. You get a lot of detail like how long it took for the home to sell.
- Cons of the MLS: sometimes there are very few mobile homes listed. You also need to have access through a licensed Real Estate Broker.
Santiago Financials records the sales in almost every park in California. So, the comparable sales report will give you a record of the homes that sold in any specific park with the price, size, and year of the home.
- Pros of Santiago: Accurate. Longer list than MLS.
- Cons of Santiago: No pictures. Cost money. Can be a very short list in parks where many sales are private and behind closed doors.
Zillow is the next best step (or any other online source like Redfin, Realtor.com, and Trulia… HINT, it’s best to look at all of these because sometimes a homes might be have been listed on Zillow but not on Realtor.com and vice versa).
- Pros of free online sites: FREE. Pictures. You can see the days on market
- Cons of free online sites: can be very short list if many homes in your park haven’t been listed on these sites.
Now that you’ve got an idea of the market from online research. It’s time to start talking to people.
- Talk to management. They can give you an idea of what your home might sell for. WARNING: they can be way off. It’s happened to me where they gave me a price that was about $15,000 more than what It should have been listed for and I lost a lot of money.
- Talk to the Park Realtor (not hired by the park but the Dealer’s or Broker’s who are working your park). They of course have the best idea. But they will try and sell you on the idea of listing with them. Some may even try and exaggerate how much your property can sell for if you list with them. But that is a common mistake. They get you excited on a high price, then while it’s listed they tell you that the market has dropped and they have to lower you price.
- Neighbors. Your neighbors might have a decent idea about prices in the home. WARNING: don’t rely on this one. Use this to double check what you are already thinking.
Let’s get a ball park number.
Ok, so we’ve got our sources, and we’ve got at least 2-3 homes similar to ours that have sold in the last past year and we are looking the similar ones that are being listed now.
Factors to get it right (in order):
- Make sure that if your home is a 1975 than you’re not looking at a 2008 to compare values.
- If you’re home is more than 20 years old, then only use the homes 20 years old. Homes that are 20 years old have much better value because of the financing options available.
- Try and keep the comparable year you’re looking at to a max of 10 years.
If you can’t find anything in that range comparable to yours, than you need to look at reducing your price by at least 20% less than the nearest-to yours, year-built home that sold.
- Compare double wide with double wide, and single wide to single wide.
- If you have a single wide and there are no single wides that have sold recently… then you MIGHT have to list it at 50% less than the double wides. I say MIGHT because it could be a highly desirable park where there are a lot of buyers. If there are a lot of buyers you might be able to sell it for only 20% less than the doubles.
- When choosing comparable homes, keep the sizes at plus or minus 15%. Meaning if you’re home is 1500 square feet, then look at homes that are anywhere from 1275 to 1775 (exception, if your house is below 1,000 square feet, then a 950 square foot house SEEMS much smaller than a 1100 square foot house just based on the fact that you’re dealing with three digits rather than 4.
- However, keep in mind, that buyers aren’t too picky about it. If you have a 800 square foot house but the lay out seems very large, then its possible to compare with a bigger home.
- If there are absolutely no similar size homes, then consider then size up, and remove 10% if its not more than 500 square feet. If its more than 500 square feet, then 15%. If its more than 1000 square feet difference, then 25% or more.
- Remember that rating I told you to jot down. Now give the other homes a rating
- Can’t see images of the homes that recently sold? Then drive by.
- It’s best to set a price range to each type of condition. Look at all size homes for this.
- There’s a certain price scope for condition in the park; meaning, an excellent home might sell for $10,000 more, or a poor condition might sell for $30,000 less. You can visually see a pattern if you look at all the homes sold.
- If there are very few homes sold, then best bet is to consider all homes were sold with same condition and look at a average price. Remove all the odd-ball sales and just look what seems normal price for your type of home.
- The good thing about “condition” in mobile home parks, that they don’t affect the price greatly. You might be looking at a a $5,000 difference between an excellent home and a fair home. (exception: if you’re house in poor condition it much not even be “sellable”.)
Really look at the market- What’s the direction of the park
This is the final step but not a necessary one. However, it gives you a broader picture of the market that can save you from over pricing your home. The park values can be declining and there are some clues you can see before hand.
What’s the current condition of the market? I’ve lost money from not seeing the writing behind the wall in a park. Parks can literally lose value from one day to the next.
Supply and Demand
Are there a lot of homes being sold in that park? If so, you don’t want to be the highest priced house where it’s helping all the others sell. Be the right at point, or if your house is the better looking one (let’s be honest about ourselves though), than we can go up to 20% higher than the others.
A disgruntled staff can make it hard to sell a home. And make the park less desirable
Government/Legal/ Financial Troubles
The owner can be in a legal or financial mess with the county, the state, the feds, being sued, IRS, etc. Any number of entities can throw a wrench in the working operation of the park ,which can affect your home value through a number of ways until the issues are resolved.
Finally, I’d like to end this by saying to use these methods to help you place an accurate value on your home even if the home is listed already.
If you have you’re home listed already and you find out that you or your agent has misjudged the price of your home (which might explaining why it’s been sitting for long), then it’s ok. Don’t stress. It’s not too late.
Ask your realtor if they can really take a look at the values again and that you’re concerned with why it’s been sitting long (it may be that your park has some very high days on market). Be especially concerned if homes are selling faster than yours and bring that up to the conversation.
Ask your agent how many mobile homes has she/he sold in this area? Remember, you’re hiring the realtor, so interview them.