What Are Modular Homes: A Comprehensive Guide (2024)

3K Shares

What to Know About Modular Homes

Are you considering buying a modular home? Once thought a cheap and low-quality housing option, modular homes have come a long way in recent years.

They offer home buyers another way to achieve their dream of owning a home and have several advantages over regular, “stick-built” homes.

However, buyers should also be aware that modular homes come with some drawbacks and are ultimately seen as less desirable than a stick-built home by many people.

Below you will find a comprehensive look at the advantages and disadvantages of modular homes.

We will cover everything you need to know about modular home construction.

What Modular Means?

The definition of modular is building with a module or modules. In construction, these modules are formed to complete a structure.

Hence the term “modular home.”

What is a Modular Home?

People often wonder and ask real estate agents, what are modular homes? A modular house is essentially built indoors in a factory-like setting.

The manufactured products are covered and transported to their new locations, where a homebuilder assembles them.

Modular homes are properties that are built off-site vs. on-site. These houses are often called factory-built or prefab homes.

You may encounter modular homes for sale in your area. Modular home sales are no different than any other. They may or may not be advertised as such.

What Are Modular Homes Made Of?

New modular home construction is made of the same quality materials as traditional new construction homes.

How Modular Homes Are Built

Modular homes are built both in a factory environment and onsite. The process of building is started indoors. A series of modules are constructed.

Once completed, they are shipped to the building site, where the rest of the construction process is completed. An advantage to modular home construction is that you don’t need to complete site construction before starting the project.

Site work and building construction can start concurrently. Modular construction starts with building the flooring system. The wall and roof systems are often built simultaneously. Once completed, the walls are then erected to form a shell.

Once this process has been completed, it can be shipped to the building site. Yes, modular homes can be shipped to the location of your choosing!

Interesting Facts About Modular Homes

Modular homes can be constructed on basem*nts and crawl spaces.
A modular home can withstand winds up to one hundred seventy-five miles an hour.
They are considered to be green.
Modular construction takes a much quicker time to build than traditional new construction.
The taxes you pay on modular construction are the same as on stick-built houses.
Loans for modular homes are usually the same as site-built homes.
Home insurance for modular properties is the same as traditional stick-built homes.

The Benefits Of A Modular Home

Let’s start with the benefits of building modular homes, making this home very appealing to buyers. These include:

Modular Homes Now Have Higher Quality

Modular home manufacturing has recently improved and can often compete with the traditional stick-built home. Sometimes the quality can be better when compared to some stick builders.

Modular homes are built in a factory setting on an assembly line, which means the building process for all the pieces is under intense quality control.

On the other hand, a stick-built home is constructed from scratch on the land where it will sit.

Being in the real estate business for many years, I can tell you there have been times when a builder has not done an adequate job of keeping the lumber used in construction protected from the elements.

Problems can occur from this neglect, but you only learn about it years later.

Will Modular Homes Last?

With modular homes being constructed with the same quality materials as stick-built homes, they will certainly last.

Speed Of Construction With Modular Homes

These homes can go up quickly, often faster than a traditional stick-built home. Considering all the areas where delays are possible when building a standard home, it is easy to see why this is the case.

The materials for a stick-built home may be sourced from all over the country, and each different supplier must get the materials to the builder on time.

There are many opportunities to go wrong just in the transportation process. A modular home is one of many other homes being built by the manufacturer, which means that supplies are usually abundant to get the job done quickly.

Weather can also be an issue with a stick-built home. If it is raining, snowing, or dangerous outside, such as thunderstorms, builders will have to stop until the weather improves.

A modular home is constructed chiefly indoors, where the weather is not an issue.

If you have any time constraints in transitioning from your existing home to a new place, a modular home could be something to consider just for the savings in time.

Video: Understanding Modular Homes

Get additional modular home facts in this helpful video.

What Are Modular Homes? 🏡

Pricing on Modular Homes

Probably one of the most vital questions is the price of modular homes. Like any other construction, the costs will vary depending on several things.

A Modular Home is Less Expensive

Are modular homes cheaper?

Because the same manufacturer builds the modular home, there are fewer costs associated with its construction and less possible downtime.

A modular home cost can be up to 15% cheaper than a stick-built home and possibly even more affordable if you are building your home in a location that is hard to get to or far from major manufacturing centers.

Modular Construction Has Financing Options Through Manufactures

In addition to most home buyers’ standard financing options, you can also finance the home through the manufacturer.

Sometimes manufacturers will offer better financing options than other lenders, which means you get a less expensive home and often get more favorable financing. Favorable financing, of course, is not always the case but certainly worth researching.

Which Modular Homes Are The Best?

There are several highly-rated modular home builders. When building modular homes, I would recommend speaking to one of the following building companies:

Clayton Homes
Deltec Homes
Commodore Homes
Connect Homes
Impresa Modular

You might also consider researching local modular home builders as well. There could be other quality builders of modular construction in your area.

Modular Homes Are Not Mobile Homes

You may be wondering about the difference between modular homes vs. mobile homes. There is no connection between the two; they should not be compared.

A modular home is not a mobile home or a manufactured home. Although mobile homes have come a long way and are now built to much higher standards than they once were, they are still not a particularly good value.

Their resale value is not as good as a modular or a stick-built home, and they tend not to last as long as a modular or stick-built home.

Here are some additional facts you should know about modular homes.

Modular Homes vs. Manufactured Homes

Many people think a modular home and a manufactured home are the same. They are not! The difference between a manufactured home and a modular home is that modular construction is held to the same standards as state and local building codes.

On the other hand, manufactured homes follow a Federal code determined by HUD.

Can Modular Homes Have Basem*nts?

Yes, a modular home can have a basem*nt, and many do.

Can Modular Homes Be Moved?

Yes, a modular home can be moved, but it is costly. Moving any house from its foundation is expensive.

Disadvantages Of Modular Homes

Now that we have covered all the pros of modular construction, you may wonder what the disadvantages are.

You should be aware of some issues when considering buying a modular home.

Although modular homes offer plenty of advantages, they are still not quite in the same league as stick-built homes, particularly in the public’s perception.

Something that should never be downplayed is perceived value.

A few years ago, I was selling a home in Franklin, MA, that happened to be modular. This stigma surrounding the fact it was modular made it a more challenging sale.

The home eventually sold, but it took a bit longer than most similar homes at the price point.

While the thought of building a modular home could have numerous advantages in your mind, it may not work for innumerable buyers when it comes time to sell it.

It would help if you got a handle from local real estate agents on how the general area thinks of buying a modular home.

Modular Homes Have Less Customization

Modular homes can be built in various configurations, but it is not as easy to customize them as it is to customize a stick-built home because of how they are manufactured.

If you wanted them to, the builders of your stick-built home could build you practically anything you wanted – a living room with lofts, a tower off your master bedroom, or a circular floor plan.

Modular construction is not quite so flexible.

Modular Construction Has a More Complicated Loan Process

A mortgage for a stick-built home is something that most people are familiar with. But the payment process for a modular home involves a few more steps.

The builder wants to be paid in full before the house is finished and often wants periodic payments to finance the building process.

You may need to get a construction loan first to pay the builder, which will be changed to a regular mortgage after the home has been completed.

Ensure you understand how to get the best interest rate on your loan.

Sometimes buyers do not spend the appropriate time researching the best loan programs for their specific needs.

Understanding precisely what type of loan works best is a big part of not overspending on a mortgage. Potential home buyers should always understand how to get a mortgage.

Understand The Cost Of Land

While the modular home may cost less to build, you will still need to purchase a piece of land to build the home on. The cost of land combined with a house can shock people unprepared for it.

You need to be prepared to buy your land and house if you choose to go with a modular home. One of the areas where costs are underestimated is land development.

If there is no town sewer available in the location in which you are building, make sure you understand how expensive a septic system can be. There can be a difference from one lot to the next of tens of thousands of dollars.

Understand Land Restrictions

Although modular homes are much more favored than manufactured mobile homes, there may still be neighborhoods or municipalities that will not allow you to build such a house.

You want to ensure that the area you want to buy land and build the home will allow it. In many places, these documents are known as restrictive covenants.

It is possible that a restriction was put in place long ago, denying the ability to build a modular home. This was due to the perception that they were inferior products years ago.

People often viewed them as “eye soars” due to their unappealing roof lines. It was not uncommon to see many of the modular homes of years ago look akin to army barracks.

Perceived Quality Issues With Modular Housing

In most instances, the components of a modular home built by a manufacturer will be as good as the components of a stick-built home, but everyone may not be up to date on this fact.

If you want to impress, a modular home may not deliver the same way a stick-built home can. For some people, public perception is irrelevant, but not for everyone.

You may have to wait decades before the average person is clued into the benefits and the excellent quality of many modular homes.

One of the distinguishing factors that people identified modular homes with years ago was the “popcorn ceilings” that often accompanied their homes.

You could spot a modular the minute you walked in the door because the popcorn ceiling was a common trait. Talk to most buyers, and you will understand the hatred associated with popcorn ceilings.

Issues With Selling A Modular Home

Homebuilders and Realtors know that a modular home from an excellent manufacturer is a quality piece of real estate.

In most instances, you should be able to appreciate the value of your home just as a stick-built homeowner would. However, you may also run into extra hurdles when you try to sell the house.

When buyers first look for homes online, they look at pictures and scan facts about the property.

When they notice that your home has been prefabricated, they may be initially turned off.

Why buy a prefab when they could purchase a traditionally built home?

These initial reactions could make it harder to sell the home if you decide to sell.

You will need an experienced real estate agent and a bit of patience to reach buyers who can appreciate your home’s quality and value.

Questions to Ask When Buying a New Home

Whether you are building a traditional home or choosing to go with modular construction, it will be essential to get some basic questions answered.

Here is a list of questions to ask a builder. Make sure you get these questions answered to your satisfaction before moving forward.

Many people end up disappointed when building a home for lots of reasons. Vetting the builder is a critical exercise.

How Do Modular Home Sales Compare to Traditional Housing?

For the most part, modular home sales will be no different than their stick-built counterparts. This is especially true of newer modular construction, which is seen as far more favorable than in years past.

Some older modular construction was very poorly built, and you will probably be able to recognize it.

You can speak with a local real estate agent to see if modular home sales have faired any differently than other homes.

Keep in mind that all real estate is local, so what may be true in one area of the country might not hold in another place.

You might also try modular home sales near me to research before consulting with an agent.

Is A Modular Home An Option For You?

If you are a buyer looking for the best deal and are up to date on the quality of many modular homes, you may be delighted with one.

On the other hand, if you want something uniquely yours, something customized, or a property that will impress the neighborhood, a modular home may not be the right fit.

There may come a day when most homes are built modular, considering all the financial advantages they offer. But that day is a long way off. Until then, owning a modular home is a choice that only certain people will be happy with.

If you believe you are that kind of person, let your real estate agent know that you are open to modular homes.

Your agent may be able to find you just what you are looking for. Just remember all of the pros and cons of modular homes discussed here.

How to Find Modular Homes Nearby?

Besides relying on a real estate agent, one of the better ways to find modular construction is to do a Google search for them. Some search phrases you may want to use could include modular homes near me or modular homes nearby.

By doing this kind of search for modular homes, you will see manufacturers in your area. More than likely, you’ll have a few choices on modular homebuilders.

If not, you could also search for modular home builders as well. I would suggest modular home builders near me.

As with any other company, it will be wise to do your due diligence on the modular builder you choose to work with. Some will have excellent reputations, while others may not.

Modular Homes For Sale Near Me

When you have not started working with a Realtor and want to research the availability of modular home sales, do a Google search.

Searching for modular homes for sale near me should provide some potential results. You will likely discover there are fewer options for modular homes for sale.

There have been far fewer modular properties built. There are significant benefits to having a Realtor for new construction. Buying new construction without a Realtor could be a significant mistake.

Find an excellent buyer’s agent to help in your search.

Frequently Asked Questions About a Modular Home

1. Are Modular Home Prices Lower Than Stick-Built Homes?

Yes. Typically, a modular home costs less than traditional new construction.

2. How Much Does a Modular Home Cost?

The cost of a modular home depends on many factors, including the location, size, and various amenities you add to it.

You can expect a modular home to cost less than traditional new construction.

3. Are Mortgages For Modular Homes Harder to Get?

No. Getting a mortgage for a modular home is no different than any other house.

4. Who Are The Top Modular Home Manufacturers?

There are quite a few top modular home builders. This resource provides an excellent list of the best modular manufacturers.

5. How Can You Tell if a Home is Modular or Not?

If a house is modular and was built after 1971, it should have a tag called a Factory Built Unit Certification affixed.

The certification states that it has been made according to the universal building code standards required of stick-built homes.

6. Is a Modular Home a Good Real Estate Investment?

It depends on when the modular home was built. Older modular homes are not considered as favorably as their traditionally made counterparts.

However, newer modular homes are built to much higher quality standards and should have an excellent return on investment.

7. Can You Put a Modular Home on a Slab?

No. A modular home needs to have a basem*nt. They are constructed to be placed on a foundation. It can be a concrete or block foundation.

8. Do Modular Homes Last as well as Stick-Built Houses?

Yes. Today’s modular home construction will last just as long as a traditionally built home.

9. Are Modular Homes Safe in Bad Storms?

Yes. They are just as safe as any other house. There are some anecdotal claims they may even hold up better in storms than regular housing.

10. What’s The Difference Between Manufactured Homes and Modular Homes?

Manufactured homes are built entirely in a factory and transported to their homesite. Modular homes are also built-in factories but are not complete.

Modular homes can be made on a temporary chassis or a permanent one. Those built on permanent chassis are known as an “on frame.” A modular home built on a temporary platform is known as an “off-frame.”

Final Thoughts

Modular homes have come a long way over the last couple of decades. There are now considered to be very viable housing choices. Do your due diligence when pursuing buying a modular home.

Hopefully, you have found this guide to be practical. You should now have a much better understanding of a modular home.