Manufactured homes are now the most preferred homes for boomers seeking to downsize for their next home, as well as students struggling with their loans.
Manufactured homes have grown popular thanks to being low maintenance, customization ability, and affordability, compared to a site-built home. Manufactured homes are also easy to develop, as opposed to site-built homes.
Even though people are now opting to go for modular homes and manufactured homes, there are certain factors that they need to take into consideration before purchasing them. For instance, home maintenance considerations, choices about land, and acquiring a mortgage for manufactured homes differ from other home options.
In this article, we will focus on everything you need to decide on buying a manufactured home.
Tips for Buying a Manufactured Home
Before you buy a manufactured home, there are several factors that you must put into consideration. Here are some tips for buying a manufactured home:
What Does a Manufactured Home Involve?
A manufactured home, which is otherwise known as a mobile home, is a prefabricated home, developed/manufactured away from the site, in a factory, and then transported to the final location. They are constructed under the mandate of the HUD Code for manufactured homes and are modern improvements of mobile homes.
You can either place mobile homes on a permanent or temporary foundation. The technology behind the development of a mobile home has been around for many years.
Land for a Manufactured Home
Manufactured home developers understand that people are looking for a beautiful and comfortable space that offers luxurious upgrades and fixtures.
Before buying a manufactured home, you need to have land to put the home and foundation on. Manufactured home dealers do not sell you land together with a mobile home.
However, those buying a mobile home can have it placed on leased land from different home communities (learn of the benefits of a land-lease community here). There is also an option of having the manufactured home on your own private land if you don’t want to incur extra costs with a mobile home park.
Buying a mobile home and then renting space lowers the initial cost. However, it makes it difficult to take out loans.
Owning your land may prove to be expensive initially, but cost-effective in the long run. If you don’t have enough money, place your manufactured home on a rented piece of land.
Understand the Profit Margin
Manufactured home dealers use the same commission system and mark-up as a car dealership. The average dealership commission for these homes is $11,000 for each home, where the salesperson gets at least 20% of the money. A salesperson, therefore, makes roughly $2,000 on a manufactured home.
Understand What You’re Seeking in a Manufactured Home
If you’re seeking to get the best manufactured home deal, you must understand your manufactured home financing options and target price before approaching a dealer. Doing comprehensive online research on manufactured homes should be your starting point.
For instance, understand your favorite floor plan and the type of manufacturer that you like most. Floor plans vary widely and you must choose the one that is best for you.
Consider Smart Upgrades and Features
Some certain upgrades and features can extend the life of your new manufactured home. These features can also make the home more comfortable and cost-effective.
The smart upgrades for manufactured home maintenance tips include:
- The best idea is to have better insulation (learn how to add insulation to a mobile home here)
- If possible, choose a shingled roof rather than a flat one
- Ensure that the eave is 6”
- Never go for particle board subfloors
- The exterior wall studs should be 16 inches apart
- Exterior walls must be 7 ½’ in height
- Always select vinyl siding as opposed to hardboard or metal siding
- Each plumbing fixture must have a shutoff valve
Three Classes of Manufactured Homes
For manufactured homes, you always get what you pay for. There are three classes of manufactured homes, including single-wide (a single family home), double-wide, or triple-wide homes. For instance, don’t expect to get a $150,000 triple-wide home if you paid for a $50,000 double-wide home. Learn what is a double-wide manufactured home here.
There are also differences in construction aspects, materials, and fixtures in the different units. Always go for well-constructed manufactured homes where your expectation aligns with the price.
Never Go with the First Dealer or Home
Even though you might have selected your manufacturer of choice, there is a high chance of getting a better deal from another one. Here, you must ask for customer testimonials or use online reviews.
It will help if you don’t just pin your hopes on a single dealer or home. Compare prices from several brands and dealers. Checkout our list of the top five double-wide mobile home dealers in Michigan here.
Always Have the Home Appraised
An appraisal from NADA is very important. The cost of an appraisal when buying a new manufactured home is $20. You can then use the appraisal to negotiate a better price. Learn how to increase the value of a manufactured home here.
Learn About Your Comparables
It wouldn’t hurt to learn about the prices of substitute home buying options in your location, including condos, apartments, and houses for sale. Don’t you want to know if mobile homes are cheaper than apartments? This can be very helpful, especially in areas with rapidly decreasing or rising real estate markets.
Understanding the required monthly costs and lot rent helps you acquire a larger perspective of the average monthly costs.
Investigate Financing Options Before You Visit the Dealer’s Lot
Before settling on a home to buy, you should first investigate your available financial options. It involves checking the available credit unions, credit banks, and traditional manufactured home lenders. Learn how to finance a manufactured home here.
Here, it would be best if you always avoided dealer financing. If it’s the only available option, make sure you understand everything about it inside out.
Dealers will finance your mobile home with chattel loans or personal property rather than mortgage home loans. Such home loans come with high interest rates. Always avoid loans that have a higher interest.
Think About the Location of Manufactured Homes
It’s important to understand and carefully consider the site where you’ll place your manufactured home. If you locate your home in a rental community, it will experience a reduced gain in equity.
There is a chance to place your home on your own piece of land instead of a mobile home park. Having your home on your land reduces the financing costs, you don’t have to worry about lot rent for a mobile home, and it raises the stability of your tenure.
Never Worry When it Comes to Monthly Payments
Similar to negotiating for a car, it would help if you never let a dealer force you into naming a monthly payment or price that you’re willing to pay. Always ask to be given a total cash price and start negotiating from that.
It’s also important that you ask for the invoice price. It’s harder to negotiate down from the retail price than to negotiate up from the invoice price.
Never Pay a Deposit Until You Visit a Minimum of Three Lots
It can only make sense for you to pay for a home when you’re 100% sure that you’re ready to buy it. If you pay and change your mind about buying the unit, you might find it difficult to get a refund.
Never Wrap Lot Rent or Insurance into Your Loan
One of the best things that you can ever do is to avoid adding additions to your loan. Items such as insurance premiums, stereo systems, furniture, and prepaid park rent are allowed on chattel loans for manufactured homes – never do it!
This cuts your equity in the house, and given the high interest rates on chattel loans and your personal property, you’ll spend more than the value of the item in the long run.
Never Allow High-Pressure Sales
Do everything within your power to resist high-pressure methods, employed by salespeople and dealerships, to convince you into buying mobile homes for sale. You have to understand that there are no unique or special sales, and these are just tricks used to sway you into making a purchase.
The Salesperson and Manager aren’t Your Friends
Purchasing a site-built home takes a lot of paperwork, along with various attorneys and agencies. However, a home manufactured in a factory typically goes to a community that has a manager and salesperson. Point Blank: Neither of them cares about you.
Never Rush into Buying a Home
Most dealers will have you approved, and even have a contract ready for signing, within a few hours. It would be best if you resisted high-pressure sales approaches at all costs.
- Respectable dealers will still be available to sell you the home the following week
- Always be skeptical of freebies, enticements, and special prices to sign quickly
- If you feel uncomfortable at any particular time, feel free to walk away from the deal
- Always carry with you someone that doesn’t possess a strong emotional investment – this means that they can point out things that you might miss out on
Go for Factory Dealers
There are two types of dealers available: Factory and independent dealers.
Independent dealers sell a variety of brands, while factory dealers sell only one brand. You’ll experience fewer problems if you purchase from factory dealers.
You can ask your manufacturer or retailer to examine the lot and certify that the preparation meets the required standards.
Never spend any money on utilities or site preparation until the loan has been sealed and signed. This puts you in a position to walk away from the home, or loan, if it costs too much.
Never sign any contract or paper that you don’t fully understand. It is also critical that you don’t rely on representations, especially salespeople, when it comes to contracts. If there is something that you don’t understand about the contract, bring someone close to you along to help you out.
Buying a manufactured home, mobile home or site-built homes isn’t an easy thing. However, if you go through these tips carefully, you’ll be able to achieve everything easier.
Remember that salespeople and dealers aren’t bad, but they are also not your friend. The commissioned based salaries that they receive opens the door for cheating and lying.
Always remember to follow the above tips if you want to buy a home manufactured in a factory. We hope you get what you’re looking for.