FACT: There is no established real estate market for tiny houses; on wheels or otherwise. There simply isn’t. I’ll give you a second to argue with me. I’ll just go get another cup of coffee.
Okay, ready? Again, there is no established real estate marketing for tiny houses. Small houses? Yes. In fact, I just saw a listing for a 590 sq.ft. “bungalow” in my birth town of Norfolk, VA. Listed at $99,900 it is on a foundation, is perfectly legal, features an all new kitchen with beautiful cabinetry, granite work surfaces and stainless steel appliances, both wood and ceramic floors, a tile bathroom, a new roof, a deck, and a privacy fence. It is an amazing small space for less than the cost of monthly rent and is listed on Zillow, Trulia, and Small Home Listings. It is perfectly legal, has an assessed personal property tax value, and sits on a 3,049 sq.ft. lot. And so, therein, lies the rub. It is listed on the major sites, has an appraised real estate value, and is listed on county tax dockets, because it falls within building code for that municipality. Although built in 1948, it doesn’t have to use labor hours, material prices, and other non-quantitative figures, to assign a price value.
If I have been asked once, I have been asked a million times how much someone should charge for their tiny house on wheels. They want to sell it but have no guidelines with which to price it. The scenario usually involves a DIY tiny house on wheels. The trailer is valued at XYZ. The lumber to build cost around XYZ. The amount of labor is sporadic at best because it was 4 hours here, 2 hours after work once or twice a week, a build party a few weekends into the project, etc. It isn’t RVIA certified or ANSI certified or any other insurable, certifiable body, for that matter. Yet somehow it is loosely comparable to a model built by a professional building outfit and could possibly fetch a price near one of their builds. I typically give the same answer. I don’t know. By selling a tiny house are you hoping to make a profit? Break even? Pass it on to someone else for more sentimental reasons? Without any sort of tax appraisal or personal property tax history, the value of the tiny house is relative only to what someone is willing to pay for it.
Let’s examine for just a minute how the bungalow mentioned above probably arrived at its asking price.
The owners did a little research of the direct competition (600 sq.ft., single houses in this case). They may even have contacted a real estate agent that prepared a comparative market analysis of (get read for an overused HGTV term) “comps”, detailing the original listing price, how much the home actually closed for, and how long it stayed on the market. The owner and agent then probably sat down and analyzed how the bungalow compared to neighboring properties. Is it bigger? Smaller? Is the yard nicer? Less landscaped? Does it have on-street parking only? They may have driven by some recently sold houses or visited open houses to get a sense of the neighborhood market. And the list of preparations goes on….
This process is not available in the tiny house world though and even less attainable in the DIY tiny house world. To be quite simple, you are trying to sell an illegal item for an unestablished price. You are subject to the buying market only. Even if you built a house that would value at $80,000 if built on a foundation, you have to consider that because it is on wheels or sits on a wooded lot without proper zoning and documentation, it is worth only what someone will pay for it. This is tough love, I know.
In 2014 my wife and I decided to sell our tiny house on wheels. The house was not certified by anyone. None of the electric or plumbing or insulation was done by a licensed and bonded contractor. It was all DIY. While the house was beautiful inside and out, it was not remotely legal anywhere but on our property. We had gone through the process of working with our municipality and having it certified legal by them, within their parameters. Once it left the lot, it was out of our hands. It was again, a self-constructed RV at best. We sold it for just under $19,000. Sounds pretty low for 240 sq.ft. doesn’t it? Especially considering it featured Malaysian hardwood countertops, a double sink, custom cabinetry, cork flooring, heating/air, etc. All we felt validated in charging for though was what we had receipts for. We didn’t feel right charging labor on something that took us over a year to build or charging for the time we spent comparing and test painting our exterior color. Sure we could have listed it at $40k, but why? We knew what we had and after really looking into our heart we knew what we had was special to us, but was still just a house on wheels; an illegal one at that!
So how much is that tiny in the window? It depends. How much will you give me for it?
Do you beg to differ with me? Have you sold your tiny house and had a different experience? Share your story with us. Use the comment section below.