D&D Transport and Sales © 2017

THE TRUTH ABOUT REPOS

Years ago, when I was selling new homes, it was pretty cut and dried. Usually when a home would repo, it would do so within the first two to three years and those that did repo were the ones with the smallest down payments as these buyers had the least to lose. That would leave almost all of the principal balance still owed on the home. What that meant to the new buyer was that they were getting a 2-3 year old home for almost the same price as a brand new one. This was not always the case, but it was a pretty good rule of thumb. Along with that, new homes were selling like crazy, so the finance companies were very aggressive in trying to get the full loan balance when they sold the repo. They could afford to hold on to their repos for a long time. When a customer came along with credit not quite strong enough to qualify for a new home…bingo…we’ll offer them this repo. That method usually worked quite well for the finance companies. It did not work well for the buyer.

These days and in this economy, the whole landscape of the mobile home business has changed. You’ve seen it as you have shopped around. In towns all around the country, where there once seemed to be a mobile home dealership on every other corner, now it is hard to find even one. Right here in Richmond, Kentucky, not too many years ago, there were 9 new home dealerships. Now there is one. Many of the mobile home finance companies as well, did not survive the downturn in the industry.

With our present economy being what it is, more and more people are being forced into foreclosure and fewer new mobile homes are being sold now than I have ever seen in my 45+ years in this business. This has caused two very significant changes in the industry. First is the fact that new home prices have gone through the roof. Secondly, finance companies are being forced to recover whatever they can as quickly as they can. This puts a whole new light on repossessed homes. Now, instead of trying to achieve a recovery rate of 80-90%, the finance companies are now tickled to death at a 45-50% recovery rate and will often take less than that if a particular home has been repossessed and is not resold within a 60 – 90 day period. On top of that, they are willing to do all the repairs, refurbishing, etc., needed to make a home ready to live in and even offer a warranty on the major components such as the interior plumbing, electrical system, furnace and water heater.

So, as things stand now, a repo is very often a much wiser decision financially than a new home. As an example, we just recently sold a 32 X 80 Dutch brand home for roughly a third of what the same home would cost new. This home was in excellent shape both inside and out and with it being constructed to Dutch’s extremely high standards, it will be a top quality home for many, many years to come for its new owners.

So, if you are shopping around for a home and want to get the most for each dollar you spend, just stop by and take a look at what we have to offer. We treat our customers with respect, courtesy and you will never have to put up with a high-pressure sales approach.