How not to buy a mobile home

We've spent the last three months researching a manufactured home...while we are still on the fence, we've learned a lot about manufactured homes.

Manufactured homes are built much better than they used to be. However, there is no getting around the fact that manufactured home sales cater primarily to customers who do not have the credit histories to buy a site-built home. This leads to several unfortunate side effects:

A: Manufactured homes are sold much like cars. There is a substantial mark-up (some books estimate up to 37%) which is in your best interest to negotiate down. The sticker price on the house should be the upper limit.

B: Even the sticker price on the home is only "half a house". Putting aside the question of land to put the house on, there may be any or all of the following extra fees:

• delivery
  
• set up
  
• gas
  
• electricity to the site
  
• sewer and water to the site
  
• city/county permitting
  
• preparation of the land for setting the foundation
  
• pouring the foundation
  
• skirting
  
• steps or porch to get into the front door
  
• carport or garage
  
• meeting any neighborhood covenants -- our neighborhood in question required the foundation to be sunken (extra expense) and the house to be stuccoed
  
• It isn't clear to me whether the purchase of a manufactured home is subject to a NM gross receipts tax
  

Thus the sticker price on the house plus the cost of the land may be only 2/3 of your total costs. It is worth mentioning that the manufactured home sales use subcontractors to

• deliver the home,
• "button it up" i.e. structurally connect separate pieces,
• and finish the walls and flooring inside,
• connect the utilities (electric, gas, water, sewer).

Since payments to the subcontractors are subtracted directly from the MHD's profit (and having paid 100% upfront you have no leverage on the dealer) it is in the dealer's best interest to spend as little as possible on subcontractors -- even though installation may be one of the most important variables in how well the home ages.

C: Getting a loan for your manufactured home can be tricky. First, keep in mind that many manufactured home buyers pay in cash (they buy the home outright, rather than take out a loan) or have bad credit and would not qualify for site-built mortgage. If you pay cash for any home (site built or manufactured) you are in the unusual and unfortunate position that you can (but you don't have to!) skip the appraisal and underwriting and pay more for the house than it is worth.

Let's turn to the other group of buyer's -- those with poor credit. The manufactured home dealer (henceforth we shall call him the "MHD") knows much of their business is to people with poor credit. Therefore, they often loan the money for the house themselves. Rather than qualifying a buyer for an interest rate and negotiating a price, they negotiate a "monthly payment", sweeping a lot of details under the rug. Allowing the MHD to be your bank is very bad -- while they gather information to qualify you for a loan, they have access to your tax returns, bank accounts, and credit statement -- a used car salesman would be in seventh heaven if he could know that much about a purchaser. This also means that the holder of the loan is not an independent party -- it may be in the best financial interest of the company to have you pay a high price or high interest for years and default, rather than buy a home within your means at a fair price. (Some MHD sell the home, finance the loan, and issue the home insurance -- a triple whammy of conflict of interest.)

The final sticking point is bank loan timing. If you own land, and hire a contractor to build you a house, you have a construction loan with specific "draws" where money is transferred from the bank to the contractor, if specific goals have been met. It is not unusual for 10% of the total to be withheld until every detail in the contract has been completed and accepted. A manufactured home has to be carefully examined WHEN IT IS DELIVERED. This is the only time you have a chance to check that certain items you paid for were actually included (such as R19 insulation in the walls), and the best time to make sure poor construction or rough handling during transportation didn't produce any issues. However, most manufactured home sellers require the house to be 100% paid for before delivery -- thus you have no financial leverage over the company to fix things that were done wrong.

This 100% payment before delivery policy will disqualify you for most regular bank loans. Remember than when banks are being responsible, they protect their own interests by making sure you have a complete house with no major problems before they release the last of the money. (You are less likely to default on the house if you like it and it will be more valuable in a foreclosure.) You may be forced back into the arms of the manufactured home dealer for your loan, or you may be forced to take out a "bridge loan". Rates on bridge loans can be 12-15% (Wikipedia). A worst case scenario would have a several month delay in the house instilation while you

• pay 15% interest on a house on the bridge loan (you can't refinance until you have a house on the land)
  
• pay on the land
  
• pay rent on the place you are living or storing your things
  
• pay rent to the manufacturer to store your house on their site
  

I will mention two other snags that we didn't have to face. The first is "trailer parks" where every house is a manufactured home and no one owns the land their house sits on. Unless your park is a co-op with voting rights, the owner can require you deal with a single manufactured home vendor or lender (in some cases the manufactured home dealer OWNS the park). They can change the rent for your land at will and they can impose convents at will. Unfortunately a lovely and safe park with a reasonable landlord can change hands, and rules, overnight.

The second issues is a land-home package, where the dealer owns lots where you want to live, but won't sell them unless you buy their home (and perhaps finance with them and use their home owner's insurance).

Things you can do to make your manufactured home purchase more successful:

• You are entering into a hostile negotiation. Every piece of information you give up can and will be used against you. In particular do not mention if you are paying cash (and therefore have no bank on your side) or if you have a trade-in.
  
• Pick out a high-quality manufactured home dealer. Read: "The Grissim Ratings Guide to Manufactured Homes: The Essential Buyer's Resource, Listing Every Builder in the U.S., Their Histories, Products, Price Ranges, ... Need-to-Know Information and Much More by John Grissim".
• Once you have picked a dealer and a model, find out how much the home you buy is actually worth. There are two ways to do this. First there is an equivalent of a "Kelley Blue Book" for manufactured homes, the NADA Manufactured Housing Guide. I will point out here that NADA, like the Kelly Blue Book, not only assumes depreciation of your manufactured house, but can predict it. You can purchase the NADA guide or you can find it in the reference area of your local library. The second method is to find a HUD lender and ask how much they would lend on a particular model. You should do both of these.
  
• Investigate all set-up fees (use the check list in B above). Use Craigslist, the newspaper or go door to door in your new neighborhood to find home owners who have installed manufactured homes in your area recently. Ask them about any surprise costs. If you find an owner with a home by the MHD you are going to use, ask them how they liked the house, if anything they ordered didn't come as specified, or if there were any surprises.
  
• Make arrangements in advance to get land, home, financing, and insurance from different companies. Shop around for the best rates and terms before you sign the dotted line. If the MHD seems to offer a better deal, read the fine print. Consider whether you want all your eggs in that basket, or if it would give you greater leverage to have an outside source.
  
• Every manufactured home comes with an installation guide. There is NO excuses for a manufactured home to be installed to lower standards than specified in the installation guide, no matter what the dealer might tell you. You may want to do your own research before you sign the sales contract and pick out higher standards, such as bolting the house to the foundation, "double blocking", or ameliorating bad soil before pouring a foundation -- so that the installation method becomes part of the sales contract. (Remember the installer doesn't work for you, they work for the MHD.) You need to have read this document before delivery and have it in hand on the day of delivery.
  
• Get the names and numbers of the subcontractors for each part of the installation. Ask if you have any choices. Investigate their reputation (they often do other work in the local area) and if you find any of them unacceptable, arrange to choose and pay for a different subcontractor -- ask for a "credit" on your purchase price. Some people have found it cheaper to hire a subcontractor to install wood floors, rather than upgrade from the factory.
  
• Negotiate the best possible price. I won't give any advice here -- any source that tells you how to negotiate for cars should be applicable. No verbal agreements will be honored -- everything a salesperson agrees to should become part of the written contract.
  
• You may get an invitation to tour your house at the factory, and that is certainly worth doing, however poor lighting and the half-completed state of factory inspections make inspection on the day of delivery absolutely necessary. On the day of delivery you should be present with a cell phone and the direct number of the salesperson and their manager, the complete contract, a ladder, the installations guide, a flashlight, yardstick and tape measure and a digital camera and notebook. At minimum you should check
  
  
  
  • The depth of the attic insulation
    
  • The condition of all 2x4s you can see while the house is in two (or three) pieces.
    
  • The R value of the insulation in the walls
    
  • Any minor or major interior or exterior damage
    
  
  The last issue is one of appreciation. We all know that "trailers", "mobile homes", and "singlewides" depreciate, unlike site-built houses which generally appreciate over the course of decades. Many hopeful statements have been made by real estate agents, MHDs, and home sellers that today's modern manufactured houses appreciate exactly like site-built homes. My limited experience suggests this: if your manufactured house LOOKS like a site built home, was installed properly, has an attractive stair/porch entrance and landscaping, and is in a neighborhood where the majority of the homes were site-built, it will probably appreciate along with the neighborhood houses.
  
  If your manufactured home is clearly identifiable as manufactured from the outside, or if a large proportion of the neighborhood is manufactured including older-style singlewide and doublewide mobile homes, the house will depreciate much like a car. Keep in mind that the NADA guide expects depreciation.

Books

2006 The Grissim Ratings Guide to Manufactured Homes, John Grissim

Has a 60 item rating system on the quality of design (but not customer
service or how well the design is carried out) that results in a score
from 1 to 10 (ten being best). In NM, acording to the book, the
following highly rated homes are available:

• Silvercrest Homes 9
  
• Schult Homes 8
  
• Golden West Homes 8
  
• Oak Creek Homes 8
  
• Palm Harbor Homes 8
  
• Patriot Homes 8
  
• Skyline Corp 8
  
• Karsten 8
  

Buying a Manufactured Home: How to Get the Most Bang for Your Buck in
Today's Housing Market

(3rd Edition, 2008) by Kevin Burnside and
Robert Bentley (Paperback - Aug 30, 2008)

Manufactured Home Buyer's Handbook

by Wes Johnson (Paperback - Sep 30, 2005)

I also recommend the following website.

What I did to the hardwood floors

Most of the house has hardwood floors. I haven't the faintest idea what kind of hardwood. Before we moved in I sent my husband over to mop, then I came and mopped myself, puzzled that I couldn't make the floors look good. It turns out that the floors have completely lost their finish. I did a fair amount of research on the web and found an overwhelming vote for Waterlox -- a tung oil+mineral spirits combination that a) protects the wood and b) brings out the luster. One good thing about Waterlox is that you don't have to refinish -- strip the old finish and sand.



However there are three problems -- Waterlox can be hard to find (VOC restrictions in various states), it's really expensive, and opened containers of Waterlox tend to "gel" and have to be thrown out. Most places carry it only in quarts -- at my local store it's about $40 a quart. Online, before shipping!, $25 a quart. There's a handy online calculator that lets you figure out how much you'll need. I have 1000 square feet of wood floor. For a less shiny floor that takes two gallons of Original, then four gallons of Satin. Online that's 24 quarts of Waterlox, $588.00 plus $56.47 shipping. Yikes.

I started looking at the options. Tung oil takes too long to dry. I found myself staring at the lemon oil in the grocery store. At $5 I could afford it. So I cleaned the floor on my hands and knees with a slightly damp rag, then I sprinkled on a healthy amount of Old English Lemon Oil, and used another ran to rub it in. The oiled cloth picked up even more dirt -- a good thing -- and the floor looks much better. Now, I wouldn't do this again -- it turns out lemon oil is light mineral oil (basically paint thinner) scented with a little lemon oil (not labeled on the bottle but you can find it on the Material Safety Data Sheets). Better choices would have been mineral oil or olive oil, scented if you want. Recipes are available at several sites.

The floor was only slick for about 30 minutes. After that the floor had absorbed all the "lemon oil". I wouldn't call this a "finish", rather I would say I cleaned the floor with an oil product, rather than water. I would still like to use Waterlox...when I have the money. Until then furniture polish will have to tide us through.

Things that went wrong.

So I did want to detail a few things that went wrong in the renovation. Nothing major and nothing I want to tear up and fix but things that a little (more?) foresight would have prevented.

• Contracting is your work, cleanup is mine Life is busy, I wanted to do some work myself. It's hard to tell how much to trust the contractor. But I would have been much better off if, each day when the contractor's men left, I went in and swept up the mess. Cleaning, picking up the shavings, throwing out the lunch bags, just gives you the right, floor level view, of the work that's been done. "Inspecting" can be done too fast, you can't see under the mess, but cleaning gives you a great view, as well as giving the contractor a fresh start the next morning.



• People cost more than things I've certainly learned this in the world of work, that if costly software and really expensive computers save you ANY labor, it's more than worth it. In remodeling, this means that there's really no point in me saving a bundle on fixtures, when it's the labor costs that are going to completely sink me. I bought a very nice bathtub at the ReStore for $50 but I needed a bathtub that was enclosed on TWO sides -- the labor for creating an enclosure on the 2nd side is going to be at least $100.
  
  
  
  
• Level, but not level. There's no doubt that you have to find the right contractor to work on an old house. I thought I'd picked well, because he and I agreed on the type of floor which would be perfect -- brick laid over crusherfine and sand. However it turns out that his motto was "we'll make the rest of your house look like crap" had a hidden truth in it -- if the corner wasn't straight he couldn't bend to meet it, if the wall was uneven, oh well, his flooring was straight -- the gap was my problem. So despite my repeated entreaties to make the floor level with the two thresholds, not with absolute, we wound up with a half inch drop to the kid bedroom -- a hard brick drop -- talk about a trip hazard. What would have fixed this? A written list of my "goals" for each part of the project, posted in the bathroom.
  
  
  
  
• Half walls vs. full walls. In my mind's eye, plumbing is underneath the floor. Despite discussing with the plumber where the vents went, I didn't clue in that the plumber needed a full view as well as a floor plan. He ran a vent pipe up where there was only supposed to be a half wall -- it got rerouted but still didn't wind up in the correct place. What would have fixed this? If we'd marked on the floor plan and posted that in the room, I would have known the pipe was going to stick up in the middle of the room.
  
  
  
• Get the tub in I didn't know how much room was required for code behind the shower end of the tub or between the tub and the wall. This was rather critical because there was a tight turn between the sink and the tub -- my plans "worked" only if everything was snug. It wasn't the plumber's job to maximize floor space. I kept asking the contractor's men if they had measured the tub, but what needed to happen was that we needed to MOVE THE TUB INTO THE BATHROOM AND LOOK AT IT IN PLACE. Then we needed to mark the (floor) bricks and notify the plumber of the marks. Instead it sat in the yard, unmeasured, and the plumber put the pipes in the wrong place, losing us almost a foot.
  
  
• 
  Don't puncture the structure In a "real" house with 2x4 framing you can open any wall and run plumbing and electrical behind the sheetrock; generally your problem is a concrete slab floor. In a new adobe house you can carve channels in the adobe wall with abandon (almost). However, in an old adobe with questionable walls you have to pause before you poke, carve, and change. The walls stand for so long, with so much damage, but do you really want to bring this wall down by hanging a mirror on it? I remembered this for the mirror over the sink but forgot that the washer and dryer needed hot and cold water in, cleanouts (two), and a drain. The plumber took one look and asked the contractor for a box in front of the wall -- so that each of these items pierced the wall, but did not require an excavated channel. That was a wise decision but it lost us four inches and brought the washer and dryer uncomfortably close to the tub.
  
  



• The best laid plans So what happened to the greywater? We got exhausted after five weeks without a bathroom. I forgot I'd ever cared. Now, that's only a mild regret. What I really regret is not having put in a drain. If you have an uneven bathroom floor, or if you put the washer in the bathroom, or if you live in a house who's structural integrity requires the floors to stay dry, there should be a drain in the bathroom. I really wish I'd added a drain in the vicinity of the washer -- just so that I could control the flow of water in the case of an overflow. And it would be nice to have had the greywater plumbing. And the pipes for radiant heat (which we scotched when I was told it would take a 4th plumbing inspection). Oh well.
  
  
  
  
  

How to make a new light fixture look old?

Since we rather backed into this project I haven't had a lot of money to spend on fixtures or time to shop at the Re-Store trying to find something old. So I went to Lowes and Home Depot and did the best with what they had. The European style vanity is hip right now, but is has the same grace as an old antique vanity, without too much fuss. There's not even veneer on this vanity -- it's 100% plastic but it's a nice dark brown color. It's Woodcrafters 36" Del Mar in Expresso.



Right away I found the perfect faucet and handles -- also at Home Depot, it's an inexpensive Glacier Bay "Teapot".





The Allen + Roth Copper Rectangular Framed Mirror from Lowes isn't the exact same color as the cabinet -- but since it's antique copper finish is dark with copper highlights, it's a good match.

However the light is a problem. I picked out a light that's the right amount of fussy -- after all this adobe has nine foot ceilings and crown molding. But it's a chrome fixture and looks all too new. I'm thinking of going at it with steel wool and shoe polish to see if I can get it just not to stand out so much.

The bathroom renovation which destroyed the house, part I

So working with a national bank, the random appraiser asked for a structural inspection by a structural engineer, because the bathroom floor was uneven. This is a rather expensive inspection, $600-1000, plus mileage since they have to drive the 70 miles from Albuquerque. That would be fine if we actually got useful information out of the inspection (wouldn't it be great be able to consult a structural engineer who also knew about old adobe buildings?) but since I cannot pick the structural engineer, I predict that one of two things would happen:

1. He would declare the house unsound because it is 150 years old, period. It's clearly not built to modern code (hmmmm...PVC in 1880?). Therefore it is not habitable.

2. He will have absolutely no idea how to evaluate it and will put something vague that protects him from lawsuits and pass it.

So since we had a quote for $1000 to replace the bathroom floor we informally asked if we could just fix it, and get a second visit by the appraiser (not as expensive as a full second appraisal). While this wasn't what we had expected to do first on the house (central heat and a second bathroom would have been our priorities) we did plan on doing it eventually, so why not now?

What was wrong with the bathroom floor? The floor was built on wooden beams, covered by subflooring (I forget what now) then two layers of linolium (I use the term loosely). Water from the bathtub had leaked out and rotted the floor under the tub. The tub was 300 pounds of cast iron. Something of that mass should never have been placed over a wood floor without extra support to begin with. In addition to rot under the tub, there was rot around the toilet.

So rather than the purchase going through, we wound up with a one year rental contract with an option to buy and permission to renovate if we wouldn't hold the current owner responsible for the cost.



And...as long as you are going to tear up the floor, you should replace the 100 year old plumbing...and as long as the plumbing has to come out, it's no more expensive to move the bathroom fixtures. And as long as we are moving the fixtures, we should get the washer and the dryer out of the kitchen, where they are in the way. Sound like a expensive project? Yes, well...just wait.

Book review: Renovating Old Houses

I'm eagerly reading "Renovating Old Houses" by George Nash and while it doesn't even mention adobe houses, it's got the right spirit. I'll post more when I finish.

The Tyranny of "Code"

I can't count the number of times well meaning people have said to me "You can't do that, it's not up to code". Followed by "you'll never be able to sell it". It's enough to make my blood boil.

Don't get me wrong -- I love the fact that modern houses just about cannot be lit on fire because building code prevents them from doing so. I like having air for my furnace and a ground wire for my electricity. But I have three points to make:

First of all I have lived in several modern (1970+) houses in my small town NONE of which were up to code in every aspect. Even the code of their day. I bought and sold a house (built by a licenced contractor) which had several aspects that were not to code -- I disclosed this when I sold it -- it had no effect on the sale. In a busy market you could sell a house with no roof (I exaggerate). In a slow market a buyer could make you replace code with non-code (OK, I'm really exaggerating). But the point is, most houses don't conform to code in some ways and it has no effect on sales.

Secondly, code must be applied intelligently. The GOAL of code is to make a house safer. If applying a code doesn't make a house safer, or worse yet, makes it less safe (or less structurally sound) then it is a bad idea.

Third, code wasn't developed for old houses or adobe houses. For one thing, nothing but the roof on an adobe house is actually flammable. Code has a lot to say about keeping water away from walls and floors of a house -- but an old adobe house "brought to code" can be ruined by water now trapped around adobe walls, instead of evaporating. Concrete floors poured inside adobe walls, concrete berms on the outside, water barriers and waterproof flooring are all done in the name of bringing a house to "code", but they can bring a house down. A house, which has already survived it's first 150 years!

Finally, everyone should know that historic houses aren't legally required to follow the code your local new subdevelopment requires. In New Mexico the code that should be followed is the 2006 NEW MEXICO HISTORIC EARTHEN BUILDINGS. This says in particular "Replacement of existing or missing features using original materials shall be permitted. Partial replacement for repairs that match the original in configuration, height, and size shall be permitted. Such replacements shall not be required to meet the materials and methods requirements for new construction".

(Oddly enough many of the NM state building codes are modifications of the international building codes...which you cannot get online. See the article.)

The National Trust for Historic Preservation cites this as a major problem renovating old school buildings: "Most existing and recently built school buildings will not comply with every code provision at the local and state levels. Despite the flexibility of many codes and the potential for waivers, often studies rigidly interpret this compliance, declaring a building unsafe or cost prohibitive to retrofit. " Later in the same document they point out "the [historic] designation could make the project eligible for alternative building code requirements and additional funding sources".