Author: Dan Rinzema, Datacomp Appraisal Services
Bio: Dan Rinzema is president of Datacomp Appraisal Services a company that specializes in mobile home values and valuation and operates MHVillage.com which is a website that specializes in the mobile home industry.

The Law of Unintended Consequences

Not Always a Bad Thing!

The Law of Unintended Consequences states that: any purposeful action will produce some unintended, unanticipated, and usually unwanted consequences. A corollary states the unintended consequences can turn out to be even more significant than the intended action.

Except for the “unwanted” part, that is pretty much what’s happened with MHVillage since 2004, when my partners and I decided to invest substantial amounts of Datacomp’s money and employee time into it’s creation. Little did we realize, that within a few short years, MHVillage would grow to become the largest and most active Website advertising Manufactured Home Communities (over 35,000) along with homes for sale and vacant sites available to rent in those communities (over 120,000).

Back in 2004, Datacomp’s two “intended” objectives for creating the MHVillage Website were:

• To collect closed sales transactions of homes sold in communities in order to allow Datacomp to provide faster, better, and less expensive comparable-based home appraisals. A “buy/sell” Website that allowed sellers to report the price of their sold homes seemed like a perfect way to quickly, easily, and inexpensively collect more comps. Comparable-based appraisals were critical, because it was clear to us “book” values made absolutely no sense for valuing manufactured homes, and were actually hurting our already declining industry by causing “adverse selection” and further damaging lender portfolios. The book was killing good loans by undervaluing high-end, well-kept homes in high quality communities, and allowing bad loans by overvaluing low-end, poor condition homes in low quality communities. “Adverse selection” continues to be a serious problem today, which is why, after 23 years, Datacomp continues to advocate comparable-based valuations, which are standard in the site built residential market, and far more accurate than book values.
• To motivate manufactured home community operators to update their property’s information on the new Community Attributes System (CAS) Website (www.mhicas.org) created by the Manufactured Housing Institute. The main goal of the MHI CAS iss to encourage more lending on homes in communities by creating a resource where lenders could review the attributes of the communities. In order for it to work, communities needed to input and update information Datacomp had already contributed to the database. We believed by freely advertising and promoting positive, marketing oriented community information included in the the MHI CAS database on MHVillage, community operators would be motivated to keep their information up-to-date and accurate.

We have achieved moderate success in both of these programs. We have better comps to work with, and it takes us less time to locate comps to use for our appraisals. Many community operators are taking advantage of the free advertising of their communities on MHVillage by registering on the MHI CAS Website and updating their community information. There is, however, much room to improve in both areas. We still need more communities and lenders reporting closed sales transactions, and we also need a much more community involvement with the MHI CAS.

In hindsight, the “unintended”, or at least unanticipated growth and activity of MHVillage, was the result of: 1) The industry’s pent up demand for a high traffic and high quality Website for listing and advertising homes on-site, 2) The number of consumers beginning to search the Web for those homes and communities, 3) The near collapse of expensive print media such as newspapers, as advertisers moved in droves to more effective and lower cost Web-based advertising.

We did not fully realize at the time, but our timing for the launch of MHVillage could probably not have come at a better time. In addition to system development, graphic design, and programming, we put substantial resources into search engine optimization, and before long both the traffic to our site and the number of home listings began to grow far more rapidly than we had ever imagined. Today we have over 120,000 homes and vacant sites listed in more than 5,700 communities as well as a very rapidly growing number of home rental and lease-to-own listings. Every day over 22,000 consumers search for listings on MHVillage and our other satellite Websites where our listings are advertised. This number continues to grow, and is perhaps the biggest unanticipated consequence of all.

As it turns out, this unintended consequence is very important, because nearly half our revenue now comes from Google ads, and other text or banner advertising, entirely dependent upon high traffic. This source of revenue makes it possible for us to continue to offer free and/or very inexpensive advertising for communities and homes. Many of our larger and more Internet savvy communities also depend on our very large and focused traffic volume to be the Internet “portal” to their own websites.

We’re obviously nowhere near the size of Google (the Internet’s largest search portal), but in the manufactured housing world almost everyone searching for manufactured homes or communities ends up on MHVillage. Once they do, we make it very easy for them to jump directly to the Websites of our customers for more in depth research. In fact, it’s one of things we do best. Both homes and communities can have a link directly to their Website, and that makes it very easy for our traffic to become our customer’s traffic. A Web link from MHVillage also has the significant benefit of improving our customer’s Website search popularity as well.

So if you’d like to increase traffic to your Website, or your doorstep, or if you’d just like the phone to ring more often with prospects for your homes, or residents for your communities, find your community’s page on www.mhvillage.com, and make sure it’s accurate and appealing to potential residents. And don’t forget, there’s no charge to update your community information at either MHVillage or the MHI CAS, and by doing so you’re not only helping yourself, but our industry as well!