What should I know about manufactured homes?

Oh, the confusion. The terms “manufactured,” “modular,” “mobile,” “pre-fab,” and “trailer home” are examples of words that seem to have become concerningly intertwined in the minds of consumers. In this article, I want to discuss manufactured homes specifically and the essential things for REALTORS^® to know about them. First, it is crucial to untangle the confusion of these terms. Let’s start there and move on to manufactured home information with more specificity.

Term Talk

Let’s start at the highest level. Pre-fabricated (pre-fab) homes include all homes built off-site in a controlled manufacturing facility transported to the site in a complete or mostly complete state. This would NOT include panelized construction where a high-production home builder brings “panels,” such as pre-framed walls and truss systems, on-site to hasten the building process to the lock-up stage.

The next level would be modular homes built off-site in large “modules” almost completely wired, plumbed in the manufacturing facility, and joined on-site. These are placed on permanent foundations by an on-site crane and connected to on-site services like gas, water, electricity, and sewer like any other home. “Manufactured homes,” on the other hand, is the new term for what used to be called a mobile home or, further back, a “trailer” home.

A manufactured home is built entirely in a factory, including a full frame and undercarriage, to move it if required. The shift from the term mobile home to manufactured home is not just marketing but a change in manufacturing standards of these homes from the late 70s, where the construction focused less on the portability of the home and more on the building standard itself, making them more “homes that could be moved” rather than “mobile units designed for living” if that makes sense.

Construction Standards

A traditional site-built home is created in the same place it will stay permanently and requires various inspections and permit approvals throughout the process by the municipality. Manufactured homes are built in a controlled factory setting which means they are a fully complete unit when they leave, including electrical wiring, plumbing, HVAC, etc., in the walls when they arrive on site. This process means, like any other manufactured product for Canadian use, it requires a CSA-approved standard of assembly and construction. Because they are dwellings, they must also meet national building codes. To verify these standards are met, every manufactured home that leaves the factory is given a CSA label qualifying it for use in Canada to meet or exceed the standards required. This “do not remove” label is almost universally placed on or inside the door of the electrical panel in the unit but is also sometimes placed inside a kitchen cabinet.

Serial Number

As a manufactured product, it makes sense that the manufactured home would have a unique identifier specific to the unit itself. The serial number of every unit is assigned in the factory and typically included on the CSA registration number label. Still, it can be on its own plate or sticker, along with other information attached to the electrical panel or inside a kitchen cupboard. Because the serial number is extra important to identify the individual unit, there is typically one or more spots on the frame or undercarriage of the home that will be stamped with the serial number or have a serial nameplate attached by rivets. Some manufacturers take the extra step of attaching a small number plate on the home’s exterior and near the soffits on the front or back.

Manufacturer Details

Because a manufactured home is manufactured by a single entity and not generally subcontracted to various other companies, it is important to know the manufacturer’s details. These details are typically found on a data sticker or plate in the kitchen cabinets with the manufacturer’s name, model number, date of manufacture, and other applicable information.

Transaction Considerations

When representing a buyer or seller in a manufactured home transaction, all of the above information must be recorded on the applicable manufactured home schedule for the listing and purchase contract. Missing info or the inability to find information on the manufactured home can seriously hinder the ability of the seller to sell the unit if a lender doesn’t provide funds due to a lack of valid information.

Additionally, the lender will seek security against the potential moving of the unit itself and requires the seller to disclose if or how the home is secured or attached to the ground, such as on blocks, concrete footings, screw piles, etc.

Finally, a big one in a transaction is to secure a spot for the unit to reside. This means that a manufactured home sitting on leased land in a manufactured home park should not be assumed to have a lease that will be assigned to the new buyer automatically at the same price since this is rarely the case. The buyer should have a condition in the contract allowing them to verify the assignment of the lease with the park and the terms of the lease cost once transferred. Most parks increase rents on each lease transfer; the buyer must know this.

Mortgage Money

Technically speaking, a mortgage is only available for real property, which a manufactured home is not. As a portable chattel, the security for the lender is not by land title but through the personal property registry and personal covenants with the buyer. For this reason, only a handful of lenders will lend money on manufactured homes and only under specific criteria. This should be discussed in detail with the buyer at the beginning of the relationship so they can do their research.

Manufactured homes have served a segment of the real estate marketplace well since the end of World War II and continue to be a product offered to the consumer as a niche market real estate option.

Love or hate the concept, manufactured homes are out there, and consumers have questions, so when a REALTOR^® is helping a consumer transact in these homes, these are some of the important things to know.