Buyers that are looking to enter the housing market have multiple home types to choose from. They can look into existing homes or new construction, along with tiny homes and other unique properties. Another option to choose from is the modular, or pre-fabricated home. These homes first gained traction in the early 20th century, when customers could choose from dozens of home designs out of the Sears, Roebuck and Co. catalog. Modern innovations continue to make modular homes a popular choice.
Learn more about the average cost to build a modular home and what choosing one of these kits entails.
Modular Homes are Factory-Made and Assembled On-Site
Unlike stick-built homes (or site-built) that are created on the land they are placed on, modular homes are constructed in a factory. They are created in a warehouse and then the parts are shipped to the buyer’s location. Almost 90 percent of the house can be made off-site, which means there is minimal assembly once it’s time to put the parts together.
Modular homes are different from mobile homes, which are completely constructed in one place. Mobile homes can be easily transported from one place to another and are often placed on frames rather than attached to a foundation.
As a buyer, you simply have to choose the model of the house that you want and let the manufacturers do the rest. This can save you time in designing blueprints and means you won’t have to work with an architect or contractor to create the layout you want.
You Can Choose a Unique Modular Home
One of the biggest concerns that buyers have when considering modular homes is the style of the house. Most people don’t want to feel like they have the same house as everyone else and they might have unique needs based on their family size or lifestyle.
There are hundreds of different modular home layouts to choose from. You do not need to select one home design and hope it works for your needs. Even in the 1930s when Sears was selling its modular homes there were more than 370 different home designs to choose from.
Don’t let design styles put you off from this kind of home. You should be able to find a layout and home type that matches your personality and lifestyle goals.
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Understanding the Cost to Build a Modular Home
Because there are hundreds of prefabricated home options to choose from, the cost to build a modular home also varies. Some buyers can choose smaller prefab homes that cost around $80,000 to build while others can pay more than $450,000 for the house alone.
There are two key prices to look at when determining the cost to build a modular home: the base model cost and the total finished cost.
- The base model cost includes the actual home materials, the delivery, and the labor to assemble the modules in place.
- The finished cost includes land preparation, the foundation, the permits, the utility connections, and other costs related to the house. It also includes additions like interior design and landscaping.
Finishing is not optional when it comes time to price out your modular home. The team sent to assemble the kit cannot place the house on dirt without a foundation. They cannot build the house without the proper permits. You cannot live there without running water and electricity. Keep these added costs in mind when looking into modular homes.
The average finished cost of a modular home is around $270,000, with an average base cost of $120,000.
Before you look at modular homes, you need to know whether you can actually afford to own one. Mortgage payments are generally higher than rent in most states. And even when the prices are close, there are other costs associated with owning your home instead of renting.
Your property taxes will be added to your monthly mortgage payment. And if you put down less than 20% for a down payment, your lender will probably require you to pay for private mortgage insurance (PMI) as well.
You’ll also have to pay some costs that you might not have had to pay while renting: utilities, cable, garbage pickup, and any necessary repairs.
Make sure you can comfortably afford not just your mortgage but also any additional expenses before buying your first home.
If you’ve run the numbers and decided that yes, you can afford homeownership, your next step is to meet with a mortgage lender. You can discuss the different types of mortgages and decide which would be best for you. You’ll also want to be pre-approved for a mortgage before you begin house-hunting.
To get pre-approved for a mortgage, you’ll have to share your financial and employment information with the lender. They’ll require documentation such as tax forms, pay stubs, and more. Once they review and verify your information, they’ll determine whether to approve you for a mortgage. If they do, they’ll let you know your mortgage options and terms.
The lender will also issue a pre-approval letter. You can show this to sellers when you’re looking at homes, to let them know that you’re able to secure financing.
Modular Home Costs Do Not Include Land Prices
As you budget for your modular home, remember that the house costs do not include the price of land. Depending on your area, the land may be the most expensive part of the purchase. According to Zippia, New Jersey has the highest land prices at $196,410 per acre. Wyoming has the most affordable land prices at $1,558 per acre.
Land prices will vary significantly by city and region within each state. While Florida has a comparably lower land price at $28,961 per acre, the price of land in Miami or Orlando is significantly higher than part of Central Florida or the panhandle. The same can be said for Washington. The price of land near Seattle is much higher than in the Eastern parts of the state.
Before you look into the cost of a modular home, research land prices (and land types) so you know where your house can stand.
Modular Homes Hold Their Resale Value
When the time comes for you to move, know that your investment in a modular home is just as likely to pay off as a stick-built option. Modular homes hold their resale value and last just as long as other properties. If the market is growing in your area and home prices are increasing, then your home’s value will likely increase along with it. As long as you care for your home and continue to invest in it, going the modular route can pay off.
Find a Realtor to Help With Land Buying
If you are interested in buying land and installing a modular home, work with a Realtor who can help you on this journey. At UpNest, whichis owned by parent companyRealtor.com, we pair customers with qualified Realtors who specialize in different home types. When you connect with one of our network Realtors, you can ask them about their modular home experience and see if they have any land recommendations.
Above all, remember that your realtor should be there to aid in your home buying process, not just to show you listings. Helping you avoid the wrong time to buy, the wrong location or the wrong house for your budget can all go a long, long way in making sure that you’re happy with the end result. Beyond that, realtors aren’t all the same, and you will need to find one that gels with your interest as a home buyer before choosing to go the length of the field with them.
UpNest uses a proprietary agent matching system that considers closed listings, location of listing, and other factors to providethe customer with 3-5 individual proposals.
The proposal includes commission information, marketing techniques, a Q&A about the agents, local trends, reviews, and more. Once agents start using UpNest’s platform, the matching system evaluates their performance with UpNest, including conversion rates and response time.
Our network agents have been carefully vetted and often offer competitive, lower than averagecommission rates to UpNest customers. There is no obligation to sign up with one of our network Realtors, but when you can potentially save thousands on commission – why wouldn’t you? If you’re ready to get started, just enter your zipcode below!
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What is a modular home?
Modular homes are manufactured in a factory and then assembled at the building site. They are also referred to as prefabricated homes. These homes do not ship fully assembled and require some construction completed on-site. Buyers can order specific home layouts and property sizes based on their house goals.
What is a stick-built home?
The opposite of a modular home is a stick-built home, otherwise known as a site-built property. This home is constructed on the land and is traditionally how homes are built. Everything from the walls to the roof, electrical wiring, plumbing, and windows are assembled on-site. If a home isn’t modular, it is likely stick-built.
Do modular homes follow building codes?
Modular homes need to follow all state and local building codes exactly. It doesn’t matter where the home is originally manufactured, it needs to meet the local codes where the house is placed. This includes environmental protection building codes in states like California. This means you can trust the construction of a modular home you buy.
How much does it cost to build a modular home?
The cost to build a modular home varies based on the size of the house you buy. Most buyers can expect to pay $120,000 to $270,000 total for the house. This includes the installation and construction. These costs do not include the price of the land and any costs associated with preparing the property for the home.
Are modular homes mobile homes?
Modular and prefabricated homes are not mobile homes because they need to be assembled on-site. If the house is attached to a permanent foundation, then it is not considered mobile and buyers should have an easier time securing financing. However, some states classify modular homes as mobile homes, which can affect taxes and mortgage options.