The Home Buying Process
Steps to Buying a Manufactured Home
To assist you in your home buying process, reading through these topics will prepare you to:
- Ask the right questions
- Recognize your role in each process, and
- Not overlook any important step
The overall process includes:
- Choosing a home
- Buying a home
- Deciding where to place your home, or
- Purchasing a land and home package
- Financing options
Choosing a Home
What size home and floor plan do I want?
Manufactured homes come in a variety of sizes and floor plans that include spacious living rooms, dining rooms, fully equipped kitchens, bedrooms, family rooms and utility areas. Depending on the size of your homesite, you can choose a single-section or larger multisection design. Homes range in size from 900 to 2,500 square feet and can be customized to meet your needs and preferences.
What features are available?
The interior design of your home can include custom cabinets; walk-in closets; bathrooms with recessed tubs and whirlpools; and wood-burning fireplaces. Because most manufacturers use computer-assisted design, you'll have flexibility in choosing variations to floor plans and decor. You can choose from a variety of exterior designs, depending on your taste and budget. Exterior siding comes in an array of colors and materials including metal, vinyl, wood and hardboard. Awnings, enclosures around the crawl space, patio covers, decks and steps also are available.
How much can I expect to pay for a manufactured home?
Depending on the size, floor plans and features, a new home can cost anywhere from $15,000 to more than $100,000. This doesn't include the land.
What financing options are available?
Your retailer usually can provide information about financing. You can also check with lenders in your area. Just as there are choices when you buy a site-built home, there are a variety of financing options when you buy a manufactured home. Down payments and loan terms are similar - 5 to 10 percent of the manufactured home's sales price, and loan terms from 15 to 30 years. Most lenders offer fixed and variable rate loans and most have programs that allow you to "buy the rate down." If you own or plan to purchase the land where you will place your home, traditional mortgage financing can usually be arranged.
What other costs can I expect to pay?
While your mortgage payment may be your highest expense, you'll have other regular and periodic payments. They may include utilities, property taxes, land rental fees, insurance, routine maintenance and other service fees such as water and sewer. Today's manufactured homes are built to meet new national energy standards set by HUD. The energy conserving features found in manufactured homes help reduce your monthly energy costs.
How much maintenance will my home need?
Your homeowner's manual outlines maintenance requirements. It's important that they're followed. Failure to do so could void the warranty as well as lessen the value and life of your home.
What warranty coverage is offered on the home, its transportation and installation?
All manufacturers offer a written warranty that should cover: structural workmanship, factory-installed plumbing, heating and electrical systems, and factory-installed appliances, which also may be covered by separate appliance manufacturer warranties.
There are important differences among warranties. For example, manufacturer warranties usually do not cover installation (also called "set-up") and transportation of the home, but you may be able to get this coverage through the retailer or installation contractor. Although you may never need such warranty services, it's a good idea to check the coverage on any warranties offered before you buy.
Where can I locate my home?
Many manufactured homes are placed on privately owned property. If this option appeals to you, find out about zoning laws, restrictive covenants and utility connections. Your retailer can give you more information. Another option is to place your home in a land-lease community specifically designed for manufactured homes. Here, you own the home but lease the land. Placing your home in a land-lease community involves fewer siting considerations such as utility connections. A third option is buying the home and land together in a planned subdivision where siting issues are handled by the developer.
Buying a Home
Most manufactured homes are sold through retail sales centers, many of which are independently owned and operated. Others are owned and operated by a manufacturer. In some states, you may also buy from a manufactured home community owner, developer, or if you're purchasing a previously owned home, a real estate agent.
Shop around. Manufactured home retailers offer a variety of products and services. Many will help you choose your home and its features and, if you want, place a custom order with the factory. Typically the retailer is also responsible for coordinating the delivery and installation of your home. Ask what warranty coverage the retailer provides on transportation and installation and get it in writing. The retailer may arrange for financing and insurance. And, once you've moved in, the retailer is often the contact for warranty service.
A good way to find a retailer is to ask existing homeowners for recommendations. You can contact your state manufactured housing association for the names and addresses of manufacturers and dealers in your area. (Check the Yellow Page listings under manufactured or "mobile" homes.) As with any major purchase, check out a potential retailer or manufacturer with your local Better Business Bureau and state or local consumer protection agency. They'll tell you if they have any unresolved consumer complaints on file.
Manufactured Home Placement Options
Before you buy a manufactured home, you'll need to decide where you want to live. You have several options. You can place your home on land you own or intend to purchase, in a rental community, or in a subdivision.
It is important to note that there are distinct advantages to each manufactured home placement option. Different advantages will apply to different people depending on their specific situation. Most of these advantages have to do with the type and cost of financing the home.
When considering the placement of your new home, weigh the importance of exactly where you wish to live with the type of financing available to that type of home location. For example, placing a manufactured home in a rental community will mean financing a smaller amount of money. However, personal property loans of that type also involve higher interest rates and can have an effect on the appreciation of the home.
Check to see if your choice will be affected by local land use regulations or private land covenants. Consult with your bank and/or retailer on all of your manufactured home placement options before making a final decision.
Buying Land for Your Manufactured Home
If you plan to buy land, there are several matters to consider. Your retailer or a licensed real estate agent can help you with the following concerns:
Zoning. In cities and suburban areas, and in some semi-rural areas, you may face zoning requirements or restrictions. Some areas may prohibit manufactured homes. Others may have requirements regarding their size and appearance. Contact your retailer and your planning and zoning office for more information.
Restrictive Covenants. These are limitations in property deeds that control how the land can be used. Covenants may mandate that homes be a certain size or that land be used for certain purposes. The title search, conducted when you buy the land, may outline these limitations. However, the restrictions are sometimes described in ways that are difficult to understand. You may want to seek the advice of an experienced real estate attorney to avoid problems.
Utilities. Although a manufactured home comes with plumbing, electrical and heating systems, it must be connected to utilities. Contact your local public utility companies for connection and cost information.
Water. Not all areas have local water lines and you may have to drill a well. Check with a local well-drilling company about costs and whether success is guaranteed, as success rates are less than perfect. Also, check with local health officials about water quality.
Septic. Some areas rely on septic systems rather than city or county sanitary sewerage systems. If you can't connect your home to a municipal or county system, you must check with local authorities about installing a septic tank. While properly installed septic systems can work quite well, in some cases environmental conditions may prevent their use. For more information, contact your local health department or the office responsible for issuing building permits.
Manufactured Home Communities
As you shop for a new home and decide what type of community you want to live in, explore living in a manufactured home community. Today's manufactured homes provide durable, state-of-the-art housing with custom features and options at prices you can afford. Today's manufactured home communities are well planned, attractive, and secure, offering a wide array of services and amenities.
Many people don't understand the financial benefits that can be realized from leasing land while owning their own home. When you live in a land-lease manufactured home community, you purchase your home but lease the land where your home is located. When homebuyers make their housing purchase with land costs included, their total housing costs increase significantly. When purchasing your home, but leasing the land your home is sited on in a manufactured home community, your initial dollar investment is much lower. This lower initial investment puts more money in your budget each month to either save, cover living expenses, or to give you some of the extras you want and need. If you invested your savings, the earnings could offset the rent you pay on your homesite, further reducing your monthly expenses. You could decide to make use of your monthly savings in numerous ways. You may initially wish to buy a bigger home since land costs are not included in your home purchase. You may decide to take more vacations or buy that boat you have always wanted. Another financial benefit of living in a manufactured home community involves real estate taxes. When leasing land, real estate taxes are paid by the community owner and are included in the monthly land rent. The individual homeowner only pays taxes on the value of his or her home, usually in the form of personal property tax.
Many manufactured home communities offer lawn maintenance, pools, clubhouses, cable television, storage facilities for RV's and boats, and playgrounds. They also have the staff to keep things in shape, freeing the homeowner from many of these chores. The services found in your manufactured home community are usually included in the rent for your homesite.
Manufactured home communities can provide you with the secure living environment you are looking for. The manufactured home community is the original gated community. Many have only one point of entry and exit. Some have security guards that ensure only residents and their guests have access to the community. Some communities provide security forces that constantly patrol the community to ensure resident safety. Plus, neighbors look out for each other, forming a full-time, caring, unofficial crime watch, so to speak. Residents can leave their homes for days or weeks without worrying about its security.
Professional managers for the community ensure that the common areas, homes and homesites are attractive and properly maintained. They ensure that the pool is operational, the snow is removed and the trash is collected. The owner of a manufactured home community wants to keep the community in "tip-top" condition to keep you as a resident and attract new residents. This professional management helps you protect your home investment.
When you want to sell your home, you may find the resale of your home in a manufactured home community is quicker and easier than in a traditional subdivision. The price of your home will be more competitive than homes similar in size with land included. The amenities of your community will help sell your home as well. Three things mostly determine resale value: the condition of your home, the location of the community, and the condition of the community. In a manufactured home community, the management helps you enhance the value of your investment by maintaining the overall community.
Land & Home
Manufactured Home Packages
Land and home packages are growing in popularity. This option provides a level of ease for the buyer that many find very appealing.
The buyer purchases the land and the manufactured home together in one transaction as opposed to purchasing them in two separate transactions. In addition, the developer of the property or community handles most aspects of the home installation like utility connections and landscaping. The developer should also ensure compliance with local land use regulations and any private conditions, covenants and restrictions.
This also provides opportunities for utilizing standard mortgage programs with very attractive rates and longer financing terms.
Before your home is installed, make sure the site has been properly prepared. Careful attention to the following details will help ensure satisfaction with your home for years to come. Your retailer can provide you with valuable guidance and assistance.
If you're having the home installed on your own land, you may be responsible for site preparation. It is often a good idea to have your retailer or installer inspect the site to offer specific advice on your responsibilities.
Here's a site preparation checklist:
- The delivery truck must be able to reach the site.
- The site must be as level as possible.
- The area where the home will sit must be clear of trees, rocks and other debris.
- The soil must be graded and sloped away from where the home will be placed for water runoff.
- Fill soil must be compacted adequately as required by local codes to prevent the foundation from sinking or shifting.
While you may be able to do some of the site preparation, most tasks, such as grading and compacting soil, require professional expertise. Otherwise, you could do damage to your home that's not covered by the warranty.
Manufactured Home Delivery
In most instances, your home will be transported from the factory to the retail sales center. There, it will be inspected by your retailer. Any damage done to the home in transit will be repaired before it is delivered to your homesite.
Before you finalize arrangements to buy and transport a home, make sure you have a written warranty from the transporter and/or the retailer that clearly outlines responsibility. Otherwise, if damage occurs during delivery, you could have a difficult time getting no-cost repairs.
All drivers must meet North Carolina Commercial Drivers License Requirements. In addition all homes are transported with an escort meeting the following requirements:
- Certified by another state's approved escort program, or
- A North Carolina law enforcement officer, or
- A person who is at least 21 years of age, or 18 years of age with a Class A commercial driver's license.
- Possesses a valid driver's license without restrictions other than for use of corrective lens and has a driving history without conviction of driving while impaired or reckless driving in the previous 12 months
- Has successfully completed an NCDOT oversize-overweight escort vehicle operator course with certification exam score of at least 75 percent (75%) correct and has received consequent certification by the Department.
Manufactured Home Setup & Installation
Aside from the introductory remarks, make sure the following steps for installation are included in a written itemized list before you sign the contract to purchase your manufactured home:
- Transporting Your Home
- Building A Foundation
- Leveling Your Home
- Securing Your Home To The Foundation
- Finishing Your Home
- Connecting Utilities
Manufacturers must provide instructions for proper home installation. Usually, the retailer will install your home or use a contractor and the price of your home typically includes installation. You should get a written explanation of the installation services from your retailer. Be sure to read your contract before you sign. If installation isn't included, you may have to hire a professional. Ask your retailer for recommendations.
Whether the retailer or a contractor installs your home, follow these guidelines listed below. They will help you understand what you're paying for and how to check that the work has been done properly. You'll also better understand your warranty protections. Get written proof of the installer's qualifications. In North Carolina, installation contractors are required to be licensed by the NC Department of Insurance.
Ask if there is a written warranty for installation. If not, have the contractor put in writing any promises or claims regarding the installation.
Ask the contractor to explain the installation process; have it written into the agreement.
Transporting Your Home
The manufacturer is usually responsible for transporting the home from the factory to the retailer. The retailer or its transporter is usually responsible for delivering the home to your site. However, if roads are inadequate or obstacles make delivery difficult, your retailer may not be able to accept responsibility for delivery. Have the transporter check out the route beforehand to avoid problems.
Building a Foundation
Your home must have a foundation. In addition to following the manufacturer's instructions and complying with local codes, ask the institution financing your home or your rental community if they have special requirements. The Federal Housing Administration (FHA), Veterans Administration (VA) and the Rural Housing Service (RHS) also have special foundation requirements for homes they finance. Remind your retailer of the kind of financing you're using so that all applicable requirements will be met. If you place your home on your own property, you can choose from a number of foundation types including concrete block, metal or treated wood piers; a concrete slab; or a full basement. A professional installer will know which local building codes apply. Ask the installer to obtain required building permits and inspections.
Leveling Your Home
Its critical that your home be leveled to meet the manufacturer's installation instructions. Otherwise, your home's weight will be unevenly distributed. This can cause floors and walls to buckle and prevent doors and windows from opening and closing smoothly. While the manufacturer's warranty won't cover repairs resulting from improper leveling, a written warranty from the installer may. Insist on a walk-through before the installer leaves. Check for signs that your home may not be level. Because some foundation supports may settle unevenly, it is important to periodically check that your home stays level. The first check should be done 60 to 90 days after installation, and then once every year.
Securing Your Home
To help minimize damage from high winds and earthquakes, your home should be anchored to the ground or concrete footers. Anchoring must comply with the manufacturer's instructions or as required by local codes. This is not a "do-it-yourself" project. Ask your retailer for more information. North Carolina has very strict anchoring requirements for manufactured homes that add to the homes' safety and durability.
Finishing Your Home
Your home may need finishing work, such as an enclosure around the crawl space. The enclosure must provide adequate ventilation openings at all four corners of the home. If you have a multi-section home, finishing work may include molding and joining carpet on the interior, and siding and roofing work on the exterior.
Generally, these tasks are handled by the retailer. Be certain that the contract clearly outlines the level of completion to which the retailer will finish the home.
Installation should include connections to water, electricity, gas and sewer. If connections aren't included in the installation price, you'll have to contract for them separately. Your retailer can help you with the arrangements, or you can contact local authorities for more information.
Manufactured Home Inspection
Conduct an organized inspection before you move in. Move from the exterior to the interior, carefully checking each room. Many manufacturers provide a checklist in the owner's manual. Fill it out, date it, include additional items that need servicing and promptly return it to the manufacturer. Keep copies for yourself. A delay could jeopardize your warranty.
Manufactured Home Alterations
Once your home has left the factory, the HUD Code does not include provisions for additions and alterations. Such modifications may jeopardize your home warranty. They may also create malfunctions or an unsafe home. An approved addition should be a free-standing structure that meets local building codes; you may need a permit. Contact your manufacturer, the state agency that oversees manufactured housing in your state, the U.S. Department of Housing and Urban Development, or local building officials for more information.
Manufactured Home Warranties
Warranties are one of the most important aspects of the home buying process. Unfortunately, they are also one of the most often misunderstood and overlooked.
The four types of warranties discussed here are:
- Manufacturer warranties
- Implied warranties
- Retailer warranties
- Appliance warranties
It is very important that home buyers are aware of these different types of manufactured home warranties and understand what each does and does not cover:
Warranty coverage varies among manufacturers. Retailers must make copies of warranties offered on the homes they sell available for you to review and read before you buy a home. Read them and compare coverage. The following questions may help you in doing this.
- What coverage comes with the home?
- You may get warranties from the home manufacturer, the retailer, the transporter, the installer and the appliance manufacturer.
- What components and what types of problems does each warranty cover? What's not covered?
- Does the manufacturer's written warranty cover transportation and installation? If not, are they covered by other written warranties?
- How long do the warranties last?
- How do I get warranty service? Who will provide it? Where will it be performed?
- Are extended warranties available from the manufacturer? If so, what do they cover and cost?
Manufacturer warranties generally cover substantial defects in the following areas:
- Workmanship in the structure.
- Factory-installed plumbing, heating and electrical systems.
- Factory-installed appliances, which may also be covered by separate appliance manufacturer warranties.
Manufacturer warranties DO NOT cover:
- Improper installation and maintenance.
- Owner negligence.
- Unauthorized repairs.
- Normal wear and aging.
Make sure the person who performs the installation follows the manufacturer's installation instructions. Also ensure that the manufacturer's maintenance and repair instructions (contained in the consumer homeowners manual) are followed to keep your warranty in effect. While your retailer will perform most warranty service, the manufacturer is responsible for making sure repairs are done and completed in a timely manner.
In addition to written warranties, you may be protected by certain "implied warranties." An implied warranty is an unspoken, unwritten promise that a product is fit to be sold and used for its intended purpose. For example, a manufactured home should be fit to be sold and lived in. Implied warranties protect you even if no written warranty is offered by the manufacturer or retailer. Most states allow sales that exclude implied warranties ("as is" sales). However, some states do not allow sellers to exclude or limit implied warranties. Check with your state or local consumer protection officials to learn more about implied warranty protections. If you're buying a previously-owned home, ask if it's being sold with a warranty or "as is" with no written or implied warranty.
A retailer may offer a warranty on a home. Ask to see the retailer's warranty in writing before buying a home. While retailer warranties vary, they typically include:
- The terms of the warranty.
- What you must do to keep the warranty in effect.
- What you can reasonably expect from the retailer.
- That the home has been installed according to manufacturer's installation instructions and local regulations.
Retailer warranties do not cover problems that arise from:
- Owner negligence.
- Failure by the owner to provide notice for service.
- Unauthorized repairs.
Your home appliances also have warranties. They may come with the use and care manuals from the appliance manufacturer or be included in the home manufacturer's warranty, as required in some states. You have the right to review copies of all warranties before you buy a home. It's a good idea to do so, and to compare coverage.
Carefully read your warranties. Note their length and terms. In most cases, you'll get service from a local appliance service center. However, if warranty service isn't available, contact your retailer for guidance.
To learn more, contact NCMHA at:
4911 Departure Drive
Raleigh, NC 27616-1849
Toll Free: 800-849-6311
Another great source of information on manufactured housing is www.manufacturedhousing.org. This site has information to help buyers through the entire process of buying a manufactured home as well as links to other sources of information.
For consumer information on a wide variety of issues request a free copy of Best Sellers from the Federal Trade Commission.
Consumer Response Center
Federal Trade Commission
Washington, D.C. 20580
or call 202-326-2222
You also can visit the FTC at www.ftc.gov on the Internet.