What to know before buying a mobile home

Published 10:56 pm Saturday, November 10, 2007

Question: 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

Answer: Manufactured housing is an attractive alternative to the high-priced existing 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 terminology. Manufactured housing covers a range of housing styles — everything from mobile homes to sophisticated factory-built wood-frame homes. 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. And there’s no guarantee that you’ll be able to stay there as long as you’d like. Many mobile home parks are being redeveloped out of existence because land has become so valuable in Snohomish County.

If you purchase your own lot, state law allows manufactured homes, including mobile homes, to become real property when they are permanently attached to the land.

The law requires the owner to apply for what’s called elimination of title.

Once the manufactured home title has been eliminated, it’s recorded at the county and the home is treated as real property, 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 on the property. 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 almost as well as comparable homes in a given neighborhood.

And if you decide to buy a manufactured home, stick with traditional home designs. Domes and other unusual home shapes will limit your potential resale market because most buyers want what they consider to be a “normal” home. Log homes are becoming popular, but make sure they fit in with the character of your neighborhood. Again, I think you are better off sticking off with a traditional wood-frame house.

Finally consider the difficulty of obtaining financing. One factor is whether the home ever had wheels. If you have a factory-built wooden home that is delivered by truck and assembled on site, that is different than a traditional mobile home that has wheels until they are removed and the home is placed on a 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. Only a handful of mortgage lenders offer financing on manufactured homes of any kind, so keep that in mind.

Mail your real estate questions to Steve Tytler, The Herald, P.O. Box 930, Everett, WA 98206, or e-mail him at economy@heraldnet.com.