Is the appraisal process different from modular home to residential home?

Answer 1

No. The three aopproaches to value (Cost - either Reproduction or Replacement, Income, and Sales Comparison) would still be utilized as appropriate (most likely, the Income approach would not be applicable).

The DATA used in the approaches might be different (e.g. modular costs vs. site-built costs for the cost approach, sales of modular homes as comparables rather than site-built homes, etc.), but the process - the application of the approaches to value - would be the same.

Modular homes can - but don't always - have a lower overall quality than their site-built equivalents in any particular neighborhood. But that difference, if it exists, is no different than, say 2x6 construction vs. 2x4 construction or tile vs. shingle roof. These are all factors that must be analyzed and applied by the appraiser. I myself have seen more than one modular home that exceeded the typical site-built home in its area in quality, design and construction features. Of course, it was no less expensive than a site-built home. As with most things, you tend to get what you paid for whether it was built onsite or off. Just because a home (or building) is of modular construction does not intrinsically mean that it is of lower quality. It just so happens that the majority of modular homes are, in fact, designed to save money. When you think about it, it makes logical sense -- if you are paying a lot of money, you want the ability to custom-design, so the appeal of modular construction (at least high-volume modular construction) trends to the lower quality with fewer custom features.

Bottom line is - again - that you get what you pay for. If you are an experienced home buyer and you can look at a particular home 100% objectively and say that you would pay as much or more for it than a similar stick-built home in the same neighborhood, then a buyer and an appraiser would likely go the same way. If it's a cheap POS, then the opposite would hold true. There's nothing intrinsically bad or even different about modular construction - it all comes down to quality, design, features, and (from a construction standpoint), cost.