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Real Property Appraisals/removing the mobile home HUD plate

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Question
We have a double-wide mobile home permanently mounted on a basement. From one of your previous questions I see that once a mobile home, always a mobile home.

This week when we went to renew our homeowner's insurance we were told that some of the rules are changing in the future which will allow us, as mobile home owners, to pay higher rates for lower coverage. And they may not cover full replacement value to boot (or at least not without a substantial hike in premiums beyond the mobile home hit). We would also like to eventually make changes that I doubt would fall under acceptable variation for a mobile home. Fireplace, better windows, new roof, moving the kitchen.

If we can't make changes to the mobile home to classify it as a stick-built for insurance purposes then we will (eventually) have to tear it down and rebuild.  My question is, "How much can we keep to still classify the end result as a stick-built?"

The basement has all of the infrastructure that I would want to keep--the pump, plumbing for the septic, replacement furnace. If we were able to tear down the house but leave the subfloor and floor joists intact we could quickly build a replacement house with SIPs or similar. The only significant trade work required would be the electrical (and I would replace all of it now if I could anyway).

Moving isn't really an option for us.  Besides the house have built a 30'x50' greenhouse, planted an orchard and tiled the field. We'd never recover the money we've put into the ground and probably wouldn't recover a fraction of it or want to repeat it on another piece of property.

Looking forward to your reply.  Please let me know if you need any other information.

Warm regards,
David

Answer
David,

Mobile homes are generally considered personal property, not real property. I don't know where in the U.S. you are located. In CA, you can apply to the Assessor to transfer from personal property to real property. Very quickly, I found this site: http://www.mh-processing.com/ which will give you the beginnings of information you will need to make this decision. This "may" solve your future insurance problems. Run several other Google searches about converting mobiles to real estate to get all the information you need to make this decision.

Check to see how you are assessed. If you are being assessed as personal property, find out how to convert to real property and the costs involved. Before doing anything, check with your insurance company to see if this will positively impact your property.

With regard to your question: "how much can we keep?" There is no way I can answer your question, except to say: "it depends".

It depends upon the foundation and the basement for the property being to code so that a new stick built house can be built on the basement foundation. This basement may have all of the infrastructure that you need, but may not be to code for a new structure. You will need to have a local experienced contractor come out to look at the basement. He/she will need to be versed in the local code and if so, should be able to tell you if tearing down the mobile home & building a new home is feasible. If it is not to code, the contractor can tell you if you can bring it to code and how much it will cost.

If you find out that rebuilding can be completed to code, you will have to get estimates to see how much building a new structure will cost. You will need to compare these costs to the sales prices of other as similar as possible homes in your area to make sure you are not spending more to built that you can get by selling. Get the help of a very knowledgeable real estate agent to help you with the search for comparables.

Good luck in your endeavor!

John C. Carlson
CA Certified General Real Estate Appraiser
Victorville & Diamond Bar, CA
www.jccrea.com  

Real Property Appraisals

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John C. Carlson

Expertise

Any questions regarding commercial and/or residential appraising, appraisals or real estate valuation such as: appraising as a profession, valuation techniques, comparable sales selection & analysis, the new HVCC and how it affects appraisers & Borrowers. Also, questions like: "Why did my appraisal come in low & what can I do about it?" I cannot answer questions about comparable data in areas in which I do not practice. I have expertise in most areas of So. California.

Experience

31-years both commercial and residential valuation experience. State of CA Certified General Real Estate Appraiser, licensed to appraise all property types. FHA Approved. Specialized expertise with historic, architectural & luxury residential property valuation. Experienced in industrial building and small commercial property valuation. Experienced Reviewer of appraisal reports and expertise with intensive forensic reviews to uncover fraudulent appraisal reports. Expert Litigation and Expert Witness experience.

Organizations
Associate Member of the Appraisal Institute. Associate Member of the Certified Fraud Examiners.

Publications
Numerous posts to Blogs. Please "Google" "John C. Carlson Real Estate Appraisals" where a list of responses I have made will show up.

Education/Credentials
Numerous classes by the Appraisal Institute since 1978 in the practice areas in which I specialize

Past/Present Clients
First Republic Bank Wells Fargo Bank California Bank & Trust Preferred Bank Numerous Attorneys.

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