Nowadays, when people refer to manufactured homes as mobile homes, they fail to realize the subtle difference between the two. Factory built single family homes, that conform to the code laid down by the US Department of Housing and Urban Development (HUD), are known as manufactured homes. The HUD code for construction and safety standards came into existence on 15th June, 1976. Whereas, mobile homes are manufactured homes that were constructed prior to 15th June, 1976. Throughout this article, the term mobile has been used synonymously with manufactured.
Steps Involved in Appraisals
Despite conforming to the HUD Code of safety and quality, the per square foot cost of these homes is generally 10 to 35 percent less than that of conventional homes. Hence, their appraisal has assumed a great deal of importance in the face of increasing popularity of these homes. Freddie Mac and Fannie Mae have laid down the rules for the same. At the least, the appraiser is expected to perform the following tasks:
- Visually inspect the surroundings and the property under consideration
- Determine the approach to be used for real estate appraisal
- Assuming that comparable sales approach is used, the appraiser should collect comparable sales figures for recently sold neighborhood properties
- Check the accuracy of the collected data by comparing the figures, against the numbers mentioned in the public records
- Document the results in the Manufactured Home Appraisal Report that can be downloaded from Fannie Mae’s website
Choosing the Appropriate Method
An appraisal is an unbiased estimate of the value of the property under consideration using the standard and approved methods. The licensing requirements for appraisers vary from state to state. While appraising a property, the absorption rate for a neighborhood is particularly important. Absorption rate is defined as the length of time required to sell off the entire inventory
It is important that real estate transactions that include transfer of property are conducted in a legal way to avoid any problems in the future. For this, a detailed legal document called deed is essential to be prepared between the parties who are conducting the transaction. It gives the legal description of the property and the terms. A person who is transferring his interest in a real estate is called a grantor, and the one who receives it is known as grantee. Though there are many types of deeds, two of the most important deeds for real estate transactions are warranty and quitclaim deeds. Both are used for the legal transfer of property from one person to the other. Both documents have to be signed in front of witnesses for the completion of the transaction. They help protect the buyer or the grantee from third party claims for the property. Though there exist similarities, there are stark differences between the two.
About a Warranty Deed
In a warranty deed, during the transfer of the title, the grantor or the seller warrants that his ownership of the property is clear and free of any kind of liens. This deed is mostly used for traditional sales transactions.
About a Quitclaim Deed
In this deed, the grantor’s ownership of the property is not explicitly mentioned or assured for that matter. It only states that the grantor will release the ownership rights and interest in the property to the grantee. This deed is not used for traditional sales transactions.
WarrantyDeed : There are no tax advantages in this type of deed.
Quitclaim Deed : As property is transferred from one family member to the other, the transaction is treated as gift and, thus, has tax benefit.