Legacy increase

I had a group of homes ordered from Legacy where I had signed agreements and had paid my initial deposit and these are due to be delivered next week.  They have said that HUD came in this week and told them that they had to put in a mixing valve  to prevent scald and are tacking on a additional 140 dollar per house fee.  They sent me a document to sign to alter my contract to buy the homes to pass the increase on to me.  I could understand them passing this on on homes not already in the pipeline where there are no contracts in place but feel that this is a cost they should absorb as this is like an increase in materials cost which may occur after a house is ordered.  Has anyone else been through this this week and what is your opinion.

Legacy’s pricing is really cheap. They make very little per house. Meanwhile, they finance the homes, which no other manufacturer does. We’d pay it, as those issues do come up from time to time, and the Legacy relationship, to us, is worth more than $140 per home. I do not think they are trying to rip you off.

I don’t think the houses are cheap.  Priced against factory homes from Clayton, etc, I could buy homes like Minimizer for less for homes of same box size. My first 13 homes from them all had leaks. The only advantage is that they finance. That is the one thing that I love about them.   I am not a big owner like you, but I have purchased 23 units from them in the past 12 months and likely would do the same in the coming 12 months.  I don’t feel they are trying to rip me off.My issue is that they have a contract to deliver at a set price which I agreed to, and consummated that agreement when I made my initial payment due on placing the order.  They make most of their money on the financing just like we make money on lot rent as well as the interest we charge when financing homes.   Their finance charge is probably at least 4 percent over the cost of what it takes them to get the money, so on a house with $25,000 of financing, they are making $1000/year in interest.  Over the 10 year financing period, they will make around $5000 in interest charges alone. I might be more understanding if I was paying cash for the home and they had less opportunity to absorb the cost, but that is not the case.  I am trying to keep my homes as affordable as possible and what we are talking about is Legacy trying to pass on a cost which represents only 4% of what they will end up making on the sale of the home.  I honor my contracts and expect them to do the same.  Do you feel that Legacy is handling this in the proper fashion?

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You should call the sales rep and talk through it.

If you buy a home from Legacy, based on your analysis, they make $5,000, and you make probably $25,000+ in value from converting a vacant lot into an occupied lot. That’s why you do it to begin with. If Legacy does not finance you, you save $5,000 and lose $25,000+ in opportunity cost. Legacy does all park owners a favor by offering their finance program. I think you’re missing the big picture and focusing on $140 per home, If you can pay all cash and find a cheaper home, then buy it. But without their financing program, most park owners would be unable to tap into the potential of their vacant lots. If you make too big a deal over this, I doubt they will sell you more homes under this program. Personally, I would not do what you’re doing. They don’t have to sell to anyone – it’s not a legal requirement.

21st Mortgage also provides financing, for homes manufactured by Clayton, under their CASH Program. For the rental program they will finance 100% of invoice. 

Mark if you are in business to make money, as Clayton is, then simply pass the additional cost along to your buyer. It’s what every business does.
More important that you maintain a good relationship with Clayton than stand on principal or concern yourself with a minor additional cost to your buyer.  

Good Afternoon Everyone - My name is Mark Ledet and I am one of the Directors in the Park Sales Department for Legacy Housing, LTD. I am over the South/Southwest Region. Here are the facts of it all. Basically we have 750 or so homes in the backlog. HUD has come in and made all manufacturers change the following: toilet compartments, window height to meet new egress requirements, raise the height of the washer stand pipe, provide extra copies of operating and installation instructions for furnaces, a/c, heat pumps, water heaters, range, cook top, etc, move all electric panel boxes, (As they can no longer be located in closets), change all kitchen counter top electrical circuits and all outlets to a GFCI protected circuit, and put heat tape on all bathroom GFCI circuits. All of which will cost the customer $140 per home. Lastly, they are making us install anti scald valves on all showers, tub/showers and garden/oval tubs which cost $40 per fixture. So as you can see it is a lot for a manufacturer to eat especially with a huge back log. These are all cost that can or could be passed on to your costumer (end user) as stated by other park owners. We will do everything to retain and maintain our clients but we can not always eat unexpected costs that may come up.The leaky faucets have also been serviced and fixed all in a timely manner after receiving the service requests. Little things such as this are common service request that come up during or after transport and we will continue to service our clients in a timely manner.

Mr. Ledet…I am trying to reach someone from Legacy Homes for the South Texas market area regarding potential home purchases. Can you PM me please? OR if anyone on the forum has a contact they can PM me… I’d appreciate the help! Thanks in advance.

contact johngainer@legacyhousingltd.com
John Gainer

Thank you for response. I found out he no longer works for them and they have given me a different rep. His name is Reed Spivey.