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Is It Real Property?

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For buyers considering manufactured housing, it pays to find out

     With the average sale price of a home hovering around the $120,000 mark, and new construction costing upwards of $40 a square foot, many folks looking at purchasing a home are turning to the manufactured home market, and doing so in big enough numbers that manufactured housing topped $17 million in sales in 1999.

     Cheaper square footage costs, quick construction, and homes built to UBC standards are all reasons why people consider purchasing a manufactured home over building their own, but the would-be buyer should realize that a stick-built house vs. one built in a factory are still apples and oranges in a lot of areas; particularly at the county Assessor’s office.

     In most areas of the country, including our own, the portability of manufactured housing puts your high-dollar purchase into a different category for taxation– the same category, in fact, where you’ll find your boat, camper, or SUV. Yes, manufactured housing is titled through the Department of Motor Vehicles, and there it will stay until the homeowner takes steps to convert their new “vehicle” to real property.

     “(In Bonner County) you pick up a “Conversion to Real Property” form from the Department of Motor Vehicles, fill it out, and record it with the recorder’s office,” explained Larry Decker, an appraiser in the Bonner County Assessor’s office who deals with manufactured housing. “Once it’s recorded, and it’s confirmed that the person who owns the manufactured home also owns the property it sits on, the paperwork goes down to Boise and the title is destroyed. From that point on, it’s real property.”

     Part of the form must be filled out by an appraiser who’s certified by the state to conduct inspections for the conversion to real property. The appraiser will come out to your home and look to see that the installation meets Idaho Code for real property; these are items like tie downs, type of foundation, venting, and the removal of the tongue, tires and axles used to transport the home to your property.

     If you’re considering the purchase of a manufactured home, don’t assume that your dealer or your excavator knows the requirements– look them up in Idaho Code yourself, or pay some money to one of the certified appraisers in the area to advise you through the process. A little money spent up front can save a lot of money, time and hassle later.

     “I’ve talked to a handful of individuals who had to go back, once their home was set up, and figure out how to fasten it (so it meets code),” Decker said.

     If you’re financing your purchase, your lender will likely require the home be converted to real property as a condition of the loan. If they do so, it’s important to make sure the process is followed– the lender has the option of foreclosing on the loan if the conditions are not met.

     While you’re filling out the paperwork, take the time to apply for the homeowner’s exemption, as well, and save a few dollars on your property taxes.

     If you’re buying your home outright, or if your lender doesn’t require a conversion to real property as a condition of your loan, you might wonder whether it’s worth it to go to the additional expense and spend the extra time to file the conversion anyway. But if there’s a chance you’ll want to sell the home at some point in the future, then now’s the time to get this done. Not only is it easier to incorporate the requirements at the time of construction or initial set-up, but you don’t run the risk of requirements for the conversation changing years down the road, and a future conversion becoming a financial impossibility.

     There are other options to consider for future re-sale value at this time as well; one of those is your skirting. “I always suggest to people they go to the expense of a continuous concrete block foundation instead of traditional skirting,” said Decker. “It looks more substantial, both  now and to any future buyer.”

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Landon Otis

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