How do you price a modular?
Are they nice enough that they deserve a new-house premium, or should there be a discount for being “not-stick-built”. I think the price that buyers would be willing to pay depends mostly on what’s happening around the immediate neighborhood – here’s a tour around the one on Magnolia:
I think if a modular builders can build a long-standing reputation for quality, then it could be a positive for the house resale. It could be reassuring for buyers to know they are buying a high-quality, factory-built modular house, instead of a house site-built with an unknown number of shortcuts hiding beneath the walls. I remember one of the developments – Pacific Station or Nantucket – sitting with all the wood framing exposed to the rain, and wondering what effect that has on the structure.
Suppose it’s 20, 30 years from now, maybe there’s even been an addition to the original modular house. Perhaps there’s even a new roof or other major recent upgrade.
If a potential buyer, way down the road, loves the house, and the house inspection comes back clean as a whistle, is the fact that it was originally a modular still going to carry as much weight?
I’m wondering if a modular discount tends to fade with time.
if the construction quality is the same & all life and safety issues are addressed (as confirmed through code review and inspections) why would the house be valued less than stick built? is there an assumption that these houses are built to lower standards? why? as if all stick built homes are high quality…
Somebody mentioned this previously, but I think modular homes are treated exactly the same as stick built ones. The title, for instance, will say “Single Family Residence”. Now, mobile homes, however, are different and considered inferior (and will have a title that says “Mobile/Manufactured Home”).
enplaned,
I agree that 20-30 years from the modular discount will have faded away, especially if they get more popular along the way.
If the modular industry can get a foothold by actively promoting their product, it would help.
Buyers fear any uncertainty these days.
While it might be considered an SFR and you can get regular financing, all it would take is one friend to use the word “trailer”, and bye-bye buyer.
#4: There is a slight difference in plans and engineering requirements.
Modular homes are typically designed/factory-built to HUD standards, NOT local building codes. As JTR noted a few videos back, the plans are ‘state approved’ which means they are built to federal HUD standards and override local building codes.
Hence the difference. Not better, or worse, just different.
For S CA they need to not put ‘foreign’ looking siding as it looks out of place (dare I say Idaho, Susie??), and therefore atypical and off-putting because of its difference. They need to send it in wrapped and wired and stucco on site. If they did that you would never know the difference from the street.
From a lending standpoint, a modular home = stick-built. For FHA/VA, a manufactured home (on perm foundation, on owned land, de-titled and deeded) is for all intents/purposes the same as a stick-built. For FNMA, a mannied home has a pricing bump to the loan fees and some other restrictions (can do owner-occ, not rental property, lower LTV/shorter loan term for cash-out).
If a modular home is built to the same design standard, it should be better than a home built on site. The factory has jigs and fixtures that should make the framing and fabrication both more accurate and faster.
You wouldn’t want to buy a car built by mechanics from parts in your garage; it would take forever and cost far more than a car built on a production line. The house has similar tradeoffs.
^^
what RJ said
Clearfund–Good call on the Stucco. As much as I get tired of seeing so much of it, in this case it will help the house blend–and, stucco is really a nice low-maint siding with good qualities.
Let me correct a misstatement from clearfund earlier:
Modular Homes are built to the ‘same’ code as any other stick built home. In fact they are built more accurately (factory controlled building process), stronger (would your house survive on the back of a flat bed?), and ultimately lower cost (20~30% savings) due to the scale of the manufacturing process.
Manufactured Homes (aka. “Trailer Homes’), which are a different class of home, are built to ‘HUD’ spec.
hey, would the modular house pass Santaluz HOA requirements? =)
Had modular home built by the USModular team. They were fantastic. Design, Permitting,site work, foundation, house built and set and completed in less than 4 months. When I compared this to the traditional proccess that would have taken close to 18 months I am close to $100,000 ahead of the game when I factored in mortgage on land, construction loan, rent and taxes. I’m sold on modular. Family , friends cant believe how beautiful my home is and neighbors loved the fact that we had 1 day of disruption to neighborhood. I recommend that if your going to build – build modular – save time, money, and a lot of headaches dealing with subcontractors, inspectors and angry neighbors. the USModular team did a great job for me – http://www.USModularInc.com