Q: I’m interested in buying a mobile home in a mobile home park. I’d like to know the advantages and disadvantages of buying a mobile home this way. — S.D., Stanwood
A: Manufactured housing is an attractive alternative to the high-priced single-family homes in today’s real estate market, but you need to know exactly what you are buying.
First, you need to understand the lingo. "Manufactured housing" covers a wide range of styles, everything from mobile homes to sophisticated, factory-built wood-frame houses. It sounds like you’re talking about an old-fashioned, 14-foot-wide, metal-sided "park model" home. That type of mobile home is not real estate, it is personal property — like a car. And like cars, mobile homes generally depreciate in value.
Most mobile home parks don’t sell their pads outright, so you’d be paying rent each month for the privilege of parking your home there. And there’s no guarantee you’ll be able to stay there as long as you’d like. Many mobile home parks are being developed out of existence because land in Snohomish County has become extremely valuable.
If you purchase your own lot, state law allows manufactured homes (including mobile homes) to become real property when they are permanently affixed to the land. The law requires the owner to apply for "elimination of title." Once the manufactured home title has been eliminated, notice of the elimination is recorded in the county records department, and the home is treated just as if it were a site-built structure. This makes it easier and less expensive for the owner to obtain financing and title insurance. Applications for elimination of title can be obtained from your local vehicle registration agency.
Frankly, I would recommend against purchasing a park model mobile home. Focus instead on buying a wood-frame manufactured home that you can place on a lot you own. The well-built factory homes are indistinguishable from site-built homes, and they tend to appreciate as well as comparable homes in a given neighborhood.
Personally, I recommend staying away from domes and other unusual designs. There’s nothing inherently wrong with them, but you’re limiting your potential resale market because most buyers want a normal-looking home. Log homes are popular, but make sure they fit in with the character of your neighborhood. For example, a log home would look out of place in downtown Everett and would be a tough sell.
Finally, consider the difficulty of obtaining financing. At my mortgage company, we currently have a couple of clients who are attempting to refinance manufactured homes, and we are finding it somewhat difficult to place these loans. A critical factor is whether the home ever had wheels. If you have a factory-built wooden home that is delivered by truck and assembled on the site, that is different than a traditional mobile home, which has wheels until they are removed and the home is placed on a permanent foundation.
Lenders tend to discriminate against mobile homes and charge higher interest rates with stricter underwriting guidelines if the home was originally on wheels.
If you have a manufactured home, there is still some discrimination on the part of mortgage lenders, but not quite as much. Either way, you can expect to have more problems getting financing than you would if you purchased a "stick-built" house.
Mail your real estate questions to Steve Tytler, The Herald, P.O. Box 930, Everett, WA 98206. Fax questions to Tytler at 425-339-3435, or e-mail him at economy@heraldnet.com
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