On average, mobile homes are 10-20% cheaper than stick-built houses even though their building materials are as high or even better than traditionally constructed homes.
Mobile homes are more affordable than stick-built houses because they are often constructed in bulk and shipped out to homeowners across the country. Simply put, it all boils down to the economy of scale in which the cost per construction is inversely proportional to the scale.
Here, we list some tips for first-time mobile home buyers to help them make sound decisions.
1. Shop around
You can shop around online or visit a few locations to whittle down your choices. It is important that you compare not just the price but also the style/layout of the homes, their proximity to the workplace, supermarkets, etc., and their community. If you are near the Sacramento area, you might want to consider viewing several mobile home parks in Sacramento.
2. Consider your financing options
These are the financing options available to mobile home buyers:
- Traditional mortgage
- Personal loan
- Chattel mortgage
- USDA loan
- FHA loan
The accessibility of financing options is primarily influenced by the mobile home’s category (real estate vs. personal property). For example, you may qualify for a traditional mortgage if the manufactured home is affixed to the land and/or you are also planning to purchase the lot where it will sit.
By contrast, your financing options might be limited to chattel loans if you buy a mobile home that is not permanently attached to the land. Oftentimes, they come in shorter repayment terms, smaller loan amounts, and higher interest rates than traditional mortgages.
3. Work with a reputable agent
While you can buy a manufactured home from a dealer, your best bet is to hire a real estate agent who can present you with different options and point out some downsides a dealer may not be keen to show you.
Note: Mobile homes attached to the land are the only ones that real estate agents can sell.
4. Hire an installer
Most mobile home manufacturers have their in-house crew that can help you install your home. However, you may want to consider hiring a different installer who may provide you with a better deal.
5. Hire an inspector
Don’t confuse this with an inspector employed by finance companies whose only concern is to ensure that the home on the paperwork is indeed the property the borrowers/buyers are getting.
By hiring an inspector who solely works for you, you can be sure that he will conduct an extensive home inspection.
By having your own real estate agent, installer, and home inspector, you’re giving yourself the same level of protection as a stick-built home buyer.
6. Negotiate the price, not the monthly mortgage
This is one of the most common mistakes of first-time homebuyers, whether they are opting for mobile homes or traditionally constructed houses. First and foremost, manufacturers and dealers cannot give you the “true” monthly payment details because they are not a bank.
Keep in mind that only a loan officer can provide you with detailed payment information, which means that he is your go-to person if you want to know if the home you are buying will not force you to live paycheck-to-paycheck.
When negotiating with your dealer, focus on the home’s total price so you won’t end up with unexpected or hidden monthly charges.
7. Don’t let anyone pressure you from making rushed decisions
Salespeople have this habit of rushing consumers to make a decision. Never fall into this trap, even though they claim that they can only give you “the best deal only for today.” Should you ever hear this “cliche,” ask them why the price is only good for a very limited time. Most likely, this question would leave them tongue-tied.
Remember, don’t make any decision, especially if it involves a considerable sum of money like buying a new home, if you feel pressured.
