Crucial Things to Know Before Buying a Modular Home

Real Estate Agent with RE/MAX Executive Realty 91362

If you are considering new construction, it could be because you like starting with a fresh design to your specifications. But building a home from scratch can create many problems, though some types of home construction reduce the risks of a new build.

If you choose modular construction, many of the potential problems of a traditional build go away. There is less chance of the weather delaying progress, and the quality of construction could be better thanks to factory production standards.

Modular homes come in many designs and are quicker and easier to build. This reduces your costs with less work for your contractors. But how much are modular home prices? We look at what you must research for a modular home purchase, including the cost.

What are Modular Homes?

Modular or prefabricated homes are constructed in a factory, transported to the construction location, and assembled. They have to be assembled as the entire house cannot be transported in one piece, and it is easier to transport sections of the home instead of the whole.

This process is very different from the way traditional stick-built homes are constructed. With site-built homes, all the individual materials have to be transported to the site and are entirely constructed in place. This takes more time than assembling the prefabricated sections of modular homes.

Once the modular home is assembled on the foundations, it is a permanent structure. It isn't like a mobile home that can be moved to a different location or a tiny house that sits on wheels.

The Benefits of Choosing a Modular Home

  • Construction time: Building a modular home can take half the time compared to a more traditional design.
  • Reduced costs: Thanks to the shorter construction time, costs can be 20% less.
  • A wide range of options: With many different companies, there are options to meet most needs and budgets.
  • Environmental benefits: Due to optimized construction, less waste is created.

What is the Cost of a Modular Home?

It is easy to check online to give you an understanding of the price of modular homes. However, the figures you see on these websites can be misleading. You often look at only the starting costs to construct a modular home.

Before you build a modular home, you must have the funds to cover the costs. The base model cost includes the modular sections, delivery, and assembly costs. But this doesn’t cover everything you must do to finish the home. There are also the finished costs.

The finished costs include preparing the lot, pouring the foundations, permitting costs, connecting utilities, and anything else needed to complete the project. The base model and finished costs must be considered when considering modular home prices.

Companies that offer modular homes often include assembly costs in the price, but there could be additional expenses for landscaping.

Budgeting to Build Your Modular Home

The average cost to build a modular home is $180,000. This can vary considerably depending on your specifications and the size of the home. Budget for spending between $50 and $100 per square foot.

This estimate does not include the land cost, so you must also budget for this unless you already have the lot. This might mean choosing a different type of loan that allows you to buy the land and construct the property.

You need to have a realistic budget before you start this type of build. It will enable you to pay all the expenses and your contractors and still have money left to help you settle into your new home.

While they are not as cost-effective an option as shipping container homes, they offer a more conventional look.

Are All Modular Homes the Same?

While original modular home designs were very limited, that is no longer true. You will find many customization options to ensure your home meets your lifestyle requirements.

You can change the layout and interior design options and add the required amenities. You can even use digital tools to see what the finished product will look like.

Are Modular Homes Less Valuable than Stick-Built Properties?

You might imagine a modular home will not sell for the same amount as a stick-built property, but this isn't true. A modular house will appreciate at the same rate as other homes.

Even if you disclose that the home is of modular construction to a buyer, they could consider it an asset since the property will benefit from quality construction and any warranties that are still valid. The home inspection will confirm whether or not the property is in good condition.

Final Thoughts

A modular home is another option in a sea of housing choices. One of the more essential things to know is that the quality of modular housing has come a significant way from what these properties were like twenty years ago.

They no longer carry the stigma of being an inferior housing choice. Like anything else, it becomes vital to do your due diligence before buying a modular home.

Posted by

Bill Gassett is a thirty-two year veteran to the real estate industry. He enjoys providing helpful information to buyers, sellers and fellow real estate agents to make sound decisions. His work has been featured on RIS Media, National Association of Realtors, Inman News, Placester, RESAAS, Credit Sesame and others.

Comments (8)

Michael Jacobs
Pasadena, CA
Los Angeles Pasadena 818.516.4393

Hello Bill - a "sea" is a good choice of words to describe many decisions during the home construct process.    It can be rough or smooth sailing.  And like the 1960s television sitcom "Gilligan's Island", it can be a three-hour cruise that can go terribly off course.   

Jun 05, 2023 02:02 PM
John Pusa
Berkshire Hathaway Home Services Crest - Glendale, CA
Your All Time Realtor With Exceptional Service

Hello Bill Gassett very good helpful report for crucial things to know before buying a modular home.

Jun 05, 2023 02:54 PM
Paddy Deighan MBA JD PhD - Vail, CO
Paddy Deighan J.D. Ph.D

Modular homes have come a long way to be sure… a much more viable option now. Especially the ones that unfold in minutes! Kind of pricey

Jun 05, 2023 06:42 PM
Richard Weeks
Dallas, TX
REALTOR®, Broker
Great information, thanks for sharing.  I hope you have a great day.
Jun 06, 2023 02:28 AM
Bill Gassett
RE/MAX Executive Realty - Hopkinton, MA
Metrowest Massachusetts Real Estate

Thanks for all your comments on modular homes.

Jun 06, 2023 04:56 AM
Gwen Fowler SC Lakes & Mountains 864-710-4518
Gwen Fowler Real Estate, Inc - Walhalla, SC
Gwen Fowler Real Estate, Inc.

Modular homes are a way to gain your independence and build a life.  They do build less equity but many times, independence is more valuable than money or future values.

Jun 06, 2023 05:18 AM
Diana Dahlberg
1 Month Realty - Pleasant Prairie, WI
Real Estate in Kenosha, WI since 1994 262-308-3563

Thank you for sharing this valuable information about modular homes (aka prefabricated).  There really are some advantages as well as disadvantages.  Each person must investigate  the pros and cons and decide what is best for them.

Jun 09, 2023 12:20 PM
Leanne Smith
Dirt Road Real Estate - Golden Valley, AZ
Relocation to NW AZ with elbow room & more freedom

Having sold numerous manufactured as well as modular homes, their construction depending upon the manufacture is outstanding. Usually the issue is how the home is set, ground or on jacks. Ground set homes are far more attractive and usually cost more because of the cost to dig the crawl space.

Jun 10, 2023 08:09 AM