What Are Modular Homes: Pros and Cons, Cost, and Buying Guide (2022)

By: ROS Team

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Whether you’re preparing to move into your dream house or are shopping for a starter home, you’ll need to invest money and time into making sure you find a solid structure. Not every house will be. A modular house is an excellent alternative to a traditional home, and they save you the trouble of having to build one yourself.

What is a Modular House?

A modular house, or a prefabricated home, is built in different sections, usually at a factory or warehouse, then transported to the home site. Once the units are reassembled, a modular home looks just like any other house.

Modular homes are different from manufactured homes, which are also known as mobile homes. Mobile homes, as the name suggests, can be moved. Modular homes, once assembled and placed on a foundation, become permanent.

You may be surprised to know that modular homes are not new conceptually. People have been living in them for a long time. They have proved to be tried and true alternatives to traditional houses. However, they have gained popularity recently because people are once again finding that they are a more convenient alternative to homebuilding.

How Modular Homes are Delivered

There are different ways to deliver a modular home. Modular homes are often referred to as fully pre-assembled homes. The method used for delivering the house to a homesite largely depends on the accessibility to the site.

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  • Pre Assembled

The modular home is always built-in sections and delivered to a homesite by way of a crane or truck. Once each house section is finished, they are assembled into the final product and transported as a complete house. The whole house is then delivered and placed on a foundation. Since the home is pre-assembled, the size options are often limited due to transportation constraints. A house that is pre-built must be able to fit onto the road and meet the width and height requirements for transportation.

  • Panelized

A modular home where the roof, walls, and floor are assembled in a factory and the home is constructed on-site is called a panelized home. Panelized homes are easier to build, but they take longer to build than modular homes. Their main benefit is in the way they are shipped and constructed on-site. In addition, there are more design options and sizes, and it can be cheaper to transport than a traditional modular home.

  • Flat Packed

A flat-packed home is moved to a homesite in pieces on a truck or shipping container. Flat-packed homes are the safest and easiest to deliver. Most flat packed homes ship anywhere in the country, so you don’t always have to buy from the local modular home manufacturer. You will find many modular home companies by searching online.

Cost of Modular Homes vs Building

There is a significant difference in the cost of modular homes vs. building a traditional house. Since they are built in a factory, they can be built quickly and for far less money than a traditional house.

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Generally, the average home costs roughly $150 per square foot. In contrast, the average modular home could cost between $90 and $120 per square foot. A more customized and complex layout may cost more. Adding basic utilities like electrical and plumbing services can also add to the base price of your home.

Pros and Cons of Owning a Modular Home

Though there are numerous advantages of owning a modular home, there are a few cons as well. Have a glimpse over the following pros and cons:

Pros

  • They can be customized
  • Cheaper to build
  • No home inspections are needed as it’s done at the factory
  • Shorter build times
  • Built to be more energy efficient
  • No weather-related building delays
  • Built with environmentally friendly materials

Cons

  • You will still be required to purchase the land
  • You cannot build on subdivision
  • Not all modular home manufacturers are the same. You will need to research which company to choose.
  • Most frequently asked questions
  • You may need a construction loan to finance the modular home
  • You will have to build a foundation, incorporate plumbing, electrical, and sewage on-site

Do Modular Homes Hold Their Value?

One of the top questions potential buyers of modular homes have is whether they will lose home value through depreciation. Modular homes do not depreciate; instead, they appraise the same as their traditional counterparts.

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The best feature of modular homes is that they come with building warranties. If you purchase a modular home from any of the best modular home builders, you will receive a building warranty much like that of any other newly built house. The warranty will cover all of the home’s features like electrical, mechanical, plumbing, and structural components. Make sure you discuss these details with the modular home builder.

Can Modular Homes Be Moved?

No, modular homes cannot be moved once they are installed on the foundation. This is the significant difference between mobile and modular homes.

Can Modular Homes Have Basements?

Yes, if permitted by local building codes. Using a modular home as a basement is also a smart option since it can provide an added space that can be utilized in numerous ways. A modular home as a basement also provides a safe shelter from severe weather.

Are Modular Homes A Good Investment?

Without a doubt, modular homes are an excellent investment. Unlike mobile homes, modular homes hold their value and don’t depreciate with time. In most cases, modular homes even gain value; the resale value of modular homes is usually higher than their initial purchase price. Thus, it can prove to be a good option from an investment point of view.

Note: Before purchasing a modular home, do your research. Reach out to several modular home companies and compare prices, building materials used, and customer reviews before you order one.

How Long Do Modular Homes Last?

Modular homes are designed in light of local zoning codes and regulations. So, naturally, they last as long as a traditional home.

Modular Home or Prefab Homes, Which is Better?

Well, modular homes are built under the category of prefab homes. There are other types of prefab homes like mobile homes or manufactured homes.

How Much Down Payment is required for Modular Homes?

If you are considering buying your home through bank financing, you will need to arrange down 20% of the home’s value so that you may have better chances of approving the loan.

How Can You Find Modular Homes for Sale?

There are plenty of companies out there manufacturing modular homes. You can either purchase an already built design or customize it to your requirements.

Order Modular Homes on Amazon:

When you think of ordering online, Amazon comes to your mind first. You can purchase a modular home on Amazon as well. You will find all types of tiny homes, a 1,000 square foot modern cabin home, or plans for modular homes. They deliver home in 100 to 120 days on the site.

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Nationwide Homes:

One of the most popular names in the manufacturing industry of modular homes is Nationwide Homes. They offer a variety of plans like Ranch style, two-story prefab homes, etc. These homes are available in the whole of the country through their approved builders in the states.

Impresa Modular:

If you are interested in buying a more stylish modular home, reach out to Impresa Modular. They provide their services in all of the states. They have nearly eight categories of homes, including popular contemporary styles. The time it takes to deliver a home depends on your zip code.

Some Key Facts to Remember about Modular Homes:

  • Modular homes are shifted to the site and installed in a permanent foundation.
  • You will have to pay the property tax similar way as you pay on site built homes.
  • When it comes to value, modular homes appraise the same as their on-site built houses, and they do not drop market value over time.
  • You can completely customize your house. You will find engineers in most modular home companies that use CAD (Computer Aided Design) to design and customize your home.
  • Modular homes are not temporary settings, rather permanent structures and are assessed as real estate property.
  • You can get a modular home in every size and style.
  • From a climate perspective, modular homes are considered a form of green building.
  • You can also build modular homes in basements and crawl spaces.
  • It takes less time to build modular homes.
  • You can also use a modular structure for commercial purposes like an office building.
  • Modular homes can withstand up to 173-mph winds.
  • If you prioritize accessible living and envision future convenience, you should think of modular homes.

How to Build or Buy a Modular Home

People have had bad experiences with building modular homes. In the early days, modular homes were so expensive that people would sometimes compromise on the home’s quality. They purchased lower quality modular homes instead because they were cheaper.

But you need to understand that those issues were cosmetic, not structural. If you can afford to not compromise on its quality, you can build a state-of-the-art modular home.

This Works in Two Phases:

  • First, you would need to buy the land where the modular home would be placed. For that purpose, hire an agent and work with your agent to find a feasible and affordable home site for your modular home.
  • You cannot simply place a modular home anywhere you own land because they may not meet zoning restrictions. Find out if the modular home is allowed where you want to place it. Consult with your agent for this information.
  • Second, you have to buy a modular home. Here you may approach it both ways. You can order a pre-designed modular home which can then be transported to your home site or you can work with an architect to design one yourself. You can buy a modular home online from sites like Amazon, Nationwide Homes, or other builders.
  • Everything will be transported to your designated homesite where you can assemble the house with the help of professionals. One thing you need to know is that the house will not be all-inclusive. You will have to arrange for the foundation to be poured yourself.What Are Modular Homes: Pros and Cons, Cost, and Buying Guide (8)
  • Additionally, you will be required to secure electricians, plumbers, and possibly carpenters as well. You should keep a separate budget for any professionals who will work on putting your home together.

Note: You may get a mortgage for your modular home but it may take a long time if your lender is not familiar with modular homes.

Should I Buy a Modular Home?

Buying a modular home has advantages over traditional homes. Take a look:

1- Modular Homes Can be Set Up Fast:

Modular homes are factory-built and only assembled once it is placed at the home site. So, they can be set up faster than traditional homes. Additionally, because of the building materials used, the building process may continue regardless of weather conditions.

2- Modular Homes are of High Quality:

Because modular homes are built inside, they tend to be of better quality. On the contrary, site-built homes are subject to weather conditions and a margin of human error that could compromise the home’s quality.

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Modular homes are also built resilient enough to withstand handling and transport, so they make stronger home.

3- Modular Homes are Cheaper:

Due to a streamlined fabrication, modular homes are cheaper than traditional homes. They are not subject to delays so do not incur any extra cost.

You are likely to get more features for the money you spend on a modular home than you would have if you spent the same amount building a traditional home.

4- Modular Homes are Environment Friendly:

Because modular homes are built in a controlled environment and construction waste is recycled, modular homes are more environmentally friendly. The costs for heating and cooling are less, too.

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Since they are highly customizable, some owners may opt to install solar panels to make them energy-efficient.

In the End, Know Modular Homes Can be Financed Like Conventional Homes:

The best feature is that modular homes are not something alien but just like any other residence. Likewise, you can pursue a home loan as you would with traditional homes. Modular homes are also appraised similarly as they have permanent foundations.

Conclusion

Modular homes are an excellent option for those who want to build their custom dream home without dealing with the hassle of traditional construction. The process is smoother and faster since the house is preassembled in a factory and put together on-site by professionals. Modular home builders are also cognizant of local building permits, zoning laws, and the home building process.

You can either select an already made design or work with the manufacturer to customize your home according to your needs and desires. Once designed and pre-built at the factory, it will be transported to your homesite, with little to no indication of being a modular home.

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