When it comes to newly manufactured houses, we will all agree that it’s a stressful and overwhelming process. First, there are many decisions to make. You have to choose the home builder, the right dealer, the best models, the perfect floor plan, and a lot more. Here, we didn’t even include financing and insurance. This article packed some helpful tips for manufactured home buyers that will help make the whole process much easier.
1. Know the Profit Margin
Home manufacturers are like car dealers. They use the same markup and commission system. The average commission for manufactured home dealerships is around $11,000 per home. The salesperson will get 20% of it.
A salesperson can earn up to $2,000 on a new manufactured house. This provides them with enough incentive to do whatever it takes to sell a house.
2. Know What You Want in a New Manufactured Home
Know your target price and finance options before visiting a dealer. This is one of the best strategies that can help you against high-pressure sales tactics. Do as much research as possible. This article can be your head start.
Research all the knowledge you think is relevant and find as many resources as possible. Know the manufacturer you want to work with, the kind of floor plan you want, and the features.
3. Never Settle on the First House or Dealer
Even though you might have already chosen a manufacturer in mind, the person who will offer you the best price may be different. Use customer reviews and ask for testimonials. Obtaining the best price for features is as essential as after-sale customer service and references from past clients. Still, longevity and services are more important.
Don’t pin your hopes on one dealer or house. Get some good prices from several dealers and different brands, both online and offline. The markups of dealers at houses can vary widely. Avoid pinning your hopes on only one home or one dealer. Get firm prices from several dealers like the Michigan Manufactured Homes and several brands either online or via phone because dealer markups on homes can vary widely. What’s more, you get to weigh the pros and cons of each house.
4. Understand the True Competition
Before settling with a house dealer, visit at least three lots. Ideally, the lots should be true competitors, not just a different brand name from the same company. For instance, some companies operate under multiple different brands.
5. Get the New House Appraised
You can get your home evaluated by an appraiser. Generally, this is an estimate of the house’s market value. It’s not the asking price or sale price. It’s just an estimate of the value and what the house may be worth. This may differ from the seller’s asking price.
Read https://www.investopedia.com/articles/pf/12/home-appraisals.asp to learn more about the home appraisal processes.
6. Know Your Comparable
Consider knowing the prices of substitute house options around your area. This includes condos, houses, and apartments. This is beneficial in areas whose real estate markets are growing or decreasing rapidly. Learn about the lot rents and other monthly costs to have a larger perspective of the total monthly expenses.
7. Investigate Financing Options Before You Visit the Dealer’s Lot
Before going to any lot, investigate your finances. Check your bank and credit cards and all other traditional manufactured housing lenders.
Whatever you will do, ensure you avoid dealer financing. If dealer financing is your only way of getting financed, ensure you know what you are getting yourself into.
Traditionally, dealers use personal property or chattel loans to finance mobile houses instead of mortgage loans because they have high interest.
You should talk directly to lenders because dealers most times get credit for you. Even if you eventually get financing through the dealer, you will get to negotiate better, especially if you know your options. This concept applies to insurance.
8. Don’t Wrap the Taxes, Insurance, and Other Costs into the Loan
Ensure that all home ownership costs are evaluated, including rentals or purchases, finance charges, insurance, taxes, maintenance, and many more. Avoid adding unnecessary costs to your home loan. Generally, interest rates on manufactured house loans that aren’t put together with lands have percentage points higher than mortgage loans.
Read more on the benefits of investing in a manufactured home.
Conclusion
When you are ready to purchase a manufactured house, there are some tips you should carry around stored in your mind.
These tips include knowing what you want in the manufactured home, understanding the true competition, avoiding settling on the first home dealer, getting the new home appraised, investigating your financing options before visiting the dealer, and avoiding wrapping taxes, insurance, and other expenses into loans.
Remember, what matters is for you to get a house at the best deal and without much stress.
